[Ncabs] NFB Position on Social Security Disability Earnings Limits

[Gary H. Ray]

REMOVING THE EARNINGS PENALTY:  A COMMON SENSE WORK INCENTIVE FOR BLIND
SOCIAL SECURITY BENEFICIARIES


Purpose:  To promote and facilitate the transition by blind Americans from
Social Security Disability Insurance (SSDI) beneficiaries to income-earning,
taxpaying, productive members of the American workforce.  

Background:  The unemployment rate for working-age blind people is over 70
percent.  Part of the reason for this disproportionately high statistic is
the myths and misconceptions about the true capacities of blind people.
These erroneous perceptions are manifested when employers refuse to hire the
blind.

	In addition, governmental programs intended to help blind people
meet their basic economic needs, especially the SSDI program, have had the
unintended consequence of creating an incentive for blind people to remain
unemployed or underemployed despite their desire to work.  Low societal
expectations result in low representation of the blind in the workforce.
This low representation of the blind reinforces low societal expectations-it
is a vicious circle that perpetuates systemic employment discrimination
against the blind.  

	Despite the efforts of the National Federation of the Blind,
blindness still has profound social and economic consequences.  Governmental
programs should encourage blind people to reach their full employment
potential; they should not encourage economic dependence.  

Existing Law:  Title II of the Social Security Act provides that disability
benefits paid to blind beneficiaries are eliminated if the beneficiary
exceeds a monthly earnings limit.  This earnings limit is in effect a
penalty imposed on blind Americans when they work.  This penalty imposed by
the SSDI program means that, if a blind person earns just $1 over $1,640
(the monthly limit in 2009 following a Trial Work Period), all benefits are
lost.  

	Section 216(i)(1)(B) of the Social Security Act defines blindness as
a disability based on objective measurement of acuity and visual field, as
opposed to the subjective criterion of inability to perform Substantial
Gainful Activity (SGA).  For blind people, doing work valued at the SGA
earnings limit terminates benefits but does not terminate disability.  Only
blind people not working or those with work earnings below an annually
adjusted statutory earnings limit receive benefits.  

Need for Legislation:  When a blind person enters the workforce, there is no
guarantee that wages earned will replace SSDI benefits after taxes are paid
and work expenses are deducted.  For example, Jane worked as a customer
service representative with an annual income of $35,000 until she became
blind from diabetic retinopathy.  Jane meets the criteria for SSDI benefits,
which provide income of $1,060 a month (or $12,720 a year) tax-free while
she is not working.  Jane wants additional income to meet her financial
needs.  After an adjustment period and blindness skills training, she finds
employment as a part-time representative making $10 an hour for 35 hours a
week.  Jane grosses $350 a week for an average of $1,517 a month.  Using a
conservative 25 percent withholding tax, Jane nets $1,137.50 from her work,
combined with her $1,060 disability benefit, for a net total of $2,197.50 a
month.  If Jane should have the opportunity to work full time (40 hours),
her weekly salary would go up to $400 a week for a monthly average of
$1,733.  This amount is over the 2009 earnings limit, so Jane loses all of
her disability benefits.  Using the same 25 percent tax level, Jane nets
only $1,300 a month-working an extra five hours a week has cost Jane $897.50
net income (over $10,500 a year).  This example illustrates the work
disincentive contained in current law.  

	A gradual reduction of $1 in benefits for every $3 earned over the
earnings limit would remove the earnings penalty and provide a financial
incentive to work.  The benefit amount paid to an individual will gradually
decrease, while the individual's contribution to the Social Security trust
fund increases over time.  Under this approach, as Jane earns more, she pays
more into the trust fund, and her dependence on benefits decreases.  

	Monthly earnings evaluations are unnecessarily complicated for both
the beneficiaries and the Social Security Administration.  Since the medical
prognosis for blind people rarely changes, and because blindness is
objectively measurable, blind people should be subject to an annual earnings
test with the limit equal to the twelve times applicable monthly SGA amount.


	Under current law blind workers frequently pay for items and
services related to their disabilities that are necessary for them to work,
and they are permitted to subtract these Impairment Related Work Expenses
(IRWE) from monthly earnings when determining monthly income.  Properly
crediting IRWE poses a serious challenge to the SSDI program and creates a
lack of predictability for the blind person trying to determine whether
benefits will be available.  To address both issues, Congress should permit
SSDI recipients to claim the same amount used when determining an income
subsidy under the Medicare prescription drug program, currently 16.3
percent.  

	Congress should enact legislation to:  
.	Provide that earnings of blind SSDI beneficiaries in excess of the
annual earnings limit result in a gradual benefit reduction of $1 for each
$3 earned over the limit; 
.	Establish an annual earnings test for blind SSDI beneficiaries; and
.	Establish one standard IRWE deduction for blind SSDI beneficiaries
equal to the amount presently applicable for this deduction when determining
an appropriate income subsidy under the Medicare prescription drug program
or 16.3 percent of earnings, whichever is greater.  

Requested Action:  Please support blind Americans by cosponsoring
legislation that provides a common sense work incentive for blind Social
Security beneficiaries.  


Contact Information:
James McCarthy
Government Programs Specialist
NATIONAL FEDERATION OF THE BLIND
Phone:  (410) 659-9314, extension 2240
Email:  jmccarthy at nfb.org