Volume II Issue 3
January/February 1997
Copyright 1997, Neighborhood Legal Services, Inc.
Newsletter of the ASSISTIVE TECHNOLOGY Advocacy
Project
A Project of Neighborhood Legal Services, Inc * 295 Main Street, Room 495 *
Buffalo NY 14203
(716) 847-0650 * (716) 847-0227 FAX * (716) 847-1322TDD * NLS01@sprynet.com *
www.nls.org
USING SSI AND
ITS INCOME & RESOURCE RULES
TO LEVERAGE MONEY FOR AT
INTRODUCTION
Individuals and families search far and wide to identify funding sources for assistive technology (AT). This is because expensive AT devices like power wheelchairs, augmentative communication devices and access ramps can often break the family budget.
Earlier newsletters discussed traditional AT funding sources, like Medicaid and state vocational rehabilitation agencies. Supplemental Security Income (SSI) is a cash benefit and does not provide direct funding for AT or anything else. However, SSI can provide leverage for AT funding.
This article describes the SSI program; explains how it creates eligibility for Medicaid and for some services through VESID and CBVH; explains strategies for retaining SSI eligibility and how to avoid certain pitfalls; and explains the use of SSI's income and resource rules as a way to leverage money for AT.
WHAT IS SSI?
SSI is administered by the Social Security Administration (SSA). It is available to persons with limited income who are aged, blind or disabled. Our focus is on SSI as a benefit for children and adults with disabilities.
For persons who live in the community, New York's 1997 SSI rates are $570 for persons who live alone and $507 for persons who live with others. Persons who live with others and do not contribute their share toward household expenses receive a reduced rate of $345.67. (Persons can often raise the $345 level to $507 just by showing SSA that they are sharing expenses.) Rates for persons who reside in community residences (group homes) or adult care residences are much higher (see chart, page 58).
SSI can be one's only source of income or it can supplement other income such as Social Security Disability (SSD) benefits or wages. For example, Sharon receives $320 in SSD benefits and lives alone. The SSI program will disregard the first $20 of SSD and subtract the remaining income from the SSI base rate. Her monthly SSI check will be $270 ($570 - 300).
Until a child reaches age 18, SSI will consider the income and resources of a parent or parents who reside with that child. After age 18, the parent's money does not count against the child. (See chart, page 59 listing break-even points for children's SSI benefits.)
The SSI recipient must also have limited resources. For example, SSI allows a recipient to have up to $2,000 in non-exempt, liquid resources (typically a bank account). The recipient is also allowed to have a variety of exempt resources that do not count toward SSI eligibility.
Exempt resources include, among other things:
SSI RECIPIENTS ARE
AUTOMATICALLY ELIGIBLE FOR MEDICAID & FOR
VESID AND CBVH SERVICES TIED TO FINANCIAL NEED
Using SSI to Obtain Medicaid
We previously did a three-part series on Medicaid and its availability as a funding source for AT (see IMPACT, November 1995, December 1995 and January 1996). We also regularly report Medicaid fair hearing decisions which have approved funding for AT. Medicaid is probably the state's most important AT funding source.
In New York, a person who receives SSI benefits qualifies for Medicaid automatically. If the SSI check is as little as $1, Medicaid eligibility will be automatic. If a person expects to look to Medicaid as an AT funding source, it may be a priority to obtain SSI in the first instance and retain it thereafter.
Our December 1995 newsletter reported several instances in which former SSI recipients can retain automatic Medicaid eligibility. For example, SSI recipients who lose SSI eligibility when they become eligible for Social Security Disabled Adult Child's (DAC) benefits (on the earnings record of a parent) or Social Security Widows' or Widowers' benefits will, in many cases, retain automatic Medicaid eligibility. Under section 1619(b) Medicaid, former SSI recipients who lose SSI due to budgeting of wages can have automatic Medicaid continue in many cases.
Using SSI to Obtain Eligibility for
VESID or CBVH Services
We dedicated an earlier newsletter to New York's two state vocational rehabilitation agencies, the Office of Vocational and Educational Services to Individuals with Disabilities (VESID) and the Commission for the Blind and Visually Handicapped (CBVH). (See IMPACT, March 1996.) Both agencies provide funding for AT under the category of rehabilitation technology, but only for persons who meet financial need criteria.
SSI recipients automatically meet the financial need criteria for VESID or CBVH. Those agencies will not look beyond the individual SSI recipient to his or her spouse or parents to determine eligibility. This is important to the young college student who seeks VESID or CBVH help. SSI will not consider parental resources when the child is 18 or older, while VESID or CBVH often consider parental resources for an individual who is in his or her 20s. SSI eligibility, in effect, makes the parental income and resources exempt for VESID and CBVH purposes.
RETAINING SSI ELIGIBILITY
Parental Income and Children Under 18
Gerald, age 14, has cerebral palsy and lives with his parents and his two sisters, ages 7 and 10. His father earns $18,000 per year and has no health insurance. Gerald qualifies for a full, $507 monthly SSI check and automatic Medicaid. During the past several years Medicaid has paid for doctors, therapy, wheelchairs, a communication device, medication and many other items.
His mother does not work and will soon obtain a two-year paralegal studies degree. She is applying for full-time paralegal positions which pay between $14,000 and $20,000 per year. She fears that her income will make Gerald ineligible for SSI and Medicaid and seeks your advice.
Until Gerald is 18, SSI will count the parents' wages. You consult your 1997 SSI parent-to-child deeming break-even chart (see page 59). For a two-parent family of five with one child seeking SSI, the child's eligibility continues until the parents' combined gross wages equal $3,075 per month ($36,900 per year). Thus, if the mother accepts employment which pays $18,900 or more, Gerald will lose SSI and automatic Medicaid. (Gerald can then obtain Medicaid through the Department of Social Services by incurring a spendown, or cost to his parents, which will probably be substantial.)
All we can do is point out to Gerald's mother the implications of her taking employment. She must then make her own choices. Some parents in her situation have opted for the lesser paying job or part-time employment. If Gerald loses SSI due to excess family income, his parents should look into the Medicaid waiver program in which Medicaid is available without regard to the parents' income.
The family may also want to consider SSI's Plan for Achieving Self Support (PASS) as a way to disregard part of the mother's extra wages. If Gerald can identify a future vocational goal and present or future expenses associated with that goal, like college tuition, a PASS could be considered. (For more information about the PASS, see IMPACT, February 1996 and April 1996 update.)
The Generous Relative
Gerald's family can maintain a bank account of no more than $2,000 for him as an SSI recipient and an additional $3,000 for his two parents. Assume the family has income and resources within SSI limits. A well-intentioned grandmother intends to give Gerald a $7,500 birthday or communion present so that he will have money for college. If Gerald receives this gift, he will become ineligible for SSI and Medicaid.
What alternative does the grandmother have? She might wait until Gerald enters college and pay the college directly for his tuition or other expenses. She might also consider a trust, keeping in mind that trusts can be complicated and can involve additional legal and trustee fees. If Gerald has an approved PASS, the $7,500 could be placed in the exempt PASS bank account for future, approved expenses. Finally, the grandmother should consider purchasing some items for Gerald immediately, such as computer equipment that may help him with school work (assuming it goes beyond items available through the special education system).
Similar SSI resource issues can arise for adults when well-intentioned relatives seek to provide them with gifts. If the adult with the disability will have a heavy reliance upon Medicaid to pay for expensive AT, like wheelchairs or augmentative communication equipment, the relative should be persuaded to look for other avenues to express their love. Remember, any money given to an SSI recipient that can be used to meet the person's need for food, clothing or shelter will be treated as income in the month of receipt and as a resource thereafter.
The Community Fundraiser
We often hear stories about fund drives, benefit dinners, raffles and other events to raise money for the severely disabled child or adult. What are the potential SSI pitfalls awaiting the person or family that benefits from a fundraiser? Can the fundraiser have the unintended consequence of making the SSI recipient ineligible for SSI and Medicaid? The answer is a definite yes.
From an SSI and Medicaid standpoint, there
are two key principles that should guide these fundraising activities:
There are any number of other issues involved with fund drives, such as the legality of raffles, that we will not discuss in this article.
Consider this example. Gretchen is 17 years old and will be 18 in five months. Last year she injured her spinal cord playing soccer and she is now quadriplegic, dependent on a wheelchair for mobility and dependent on others for dressing and bathing. She lives with her parents. Although her parents are not wealthy, their income is just high enough to make Gretchen ineligible for SSI and Medicaid.
Family friends are organizing a major
fundraising event and hope to raise between $20,000 and $30,000 to meet Gretchen's special
needs. They will use a local church hall for an auction, dinner and dance. They will also
solicit donations to the fund. The fundraising committee, Gretchen and her parents have
met and identified the following as items that could be funded out of the money raised:
They have asked for Gretchen's Social Security number so that they can deposit money raised into a bank account. How can we advise the committee?
Our first observation is that Gretchen will be 18 in five months. She will then be eligible for SSI and Medicaid without regard to her parents' income and resources. Medicaid should be able to pay for the power wheelchair and the doctor and physical therapy bills. Since she will be eligible for SSI, she will meet VESID's financial need criteria. VESID should be able to help her with college tuition and may be able to pay for the modifications to the family van if that will be necessary to transport her to college.
Remember principle # 1: Do not place money from the fundraiser into Gretchen's bank account because SSI will only allow her to have $2,000 in the bank. Perhaps the church will be willing to keep the money that is raised in one of its accounts. That would avoid the SSI resource problem and ensure continued SSI and Medicaid eligibility after Gretchen turns 18. The church's tax exempt status might also allow donors to make tax-deductible donations to the fund.
What should the money in the fund be used for? Keeping in mind principle # 2, we do not want to pay for the new wheelchair or any medical bills that can be paid through Medicaid; and we do not want to pay for tuition or van modifications if VESID can pay for those. The most logical items to come out of the special fund would be costs for the home addition and college expenses, to the extent not covered by VESID. The parties should also consider using the fund to upgrade to a new van. VESID will not purchase a vehicle and will more readily fund expensive modifications on a new van.
USING SSI'S
INCOME AND RESOURCE RULES
TO LEVERAGE MONEY FOR AT
Child Support for Children
Under SSI's rules, two-thirds of child support will be counted as unearned income to the child SSI recipient.
Ten-year old Darlene is spinal cord injured and paralyzed from the waist down. She lives with her mother who has no other children. The mother earns $900 gross each month. Because her mother's income is this low, Darlene qualifies for a full SSI check of $507 monthly.
In a divorce settlement, Darlene's father agrees to pay $480 per month in child support. Two-thirds of that amount or $320 will count as unearned income to Darlene. SSI disregards an additional $20 and Darlene now qualifies for a $207 SSI check ($507 - 300). The child support helps balance the family's budget, but Darlene's mother does not have enough money left to purchase a lift-equipped van to allow her to easily transport Darlene to medical appointments, family outings and recreational activities. The mother currently pays $160 per month loan payments for a used car that is not suitable for transporting Darlene.
A more creative divorce settlement will help finance the lift-equipped van. In lieu of paying child support, the father agrees to pay the following monthly bills directly: telephone ($35), cable TV ($25), YMCA membership ($20) and loan payments on a new lift-equipped van ($400). Since the $480 is now paid directly to the vendors and bank, the money is not available to Darlene to pay for food, clothing and shelter. Therefore, she has no countable income and her SSI check will be the full $507.
Compare the family's balance sheet using the old and new divorce settlements. Under the original settlement, Diane and her mother wind up with $1,427 per month to meet expenses other than car expenses ($900 wages + $480 child support + $207 SSI - $160 car payment). Under the new settlement, they net $1,487 per month to meet expenses other than van expenses ($900 wages + $507 SSI + $80 for telephone, TV & YMCA). They now have $60 more for household expenses and will have the needed lift-equipped van.
Matrimonial Settlements for Adults
Arlene is legally blind and has a severe arthritic condition. She lives alone and receives $570 in monthly SSI benefits. Under a divorce settlement, Arlene is to receive $400 per month from her husband in alimony. Since the $400 is unearned income, SSI will disregard the first $20 and count $380 to reduce her SSI check to $190.
Arlene plans to open an accounting business out of a home office. To accommodate her visual impairment, she will need an enhanced computer screen, with voice output. Since her arthritis limits her ability to type for prolonged periods, she needs a scanner to enter documents directly into her computer. After receiving the maximum assistance from CBVH, Arlene will still need approximately $12,000 for additional computer equipment, office supplies, advertising and business cards.
The former husband agrees to pay a $12,000 lump sum rather than pay the first three years worth of alimony. The intent is to allow Arlene to use this money for business start-up costs. SSI will still treat this as income in the month of receipt and as a resource in later months, making her ineligible until all bank accounts total $2,000 or less.
There are two alternatives which will preserve SSI eligibility. Arlene could propose a PASS in anticipation of receiving this money. She could designate in her PASS how she will spend the $12,000 to purchase items related to her home accounting business. If approved, the PASS would make the $12,000 an exempt asset. The husband could also agree to hold the $12,000 and make payments directly to vendors as money is due. This latter method also preserves SSI eligibility as Arlene never has this cash available to her to pay for food, clothing and shelter.
Impairment Related Work Expenses
Under SSI budgeting rules, the first $65 of monthly earned income (wages) will be disregarded and 50 percent of the remaining earned income. If the person has no unearned income, like SSD, the first $85 is disregarded. Thus, Sarah who earns $685 per month will have $385 disregarded and her SSI check will be reduced by $300. If she lives alone, her monthly SSI check would be $270 ($570 - 300).
An SSI recipient can also have countable
wages reduced by the amount of any impairment related work expenses (IRWEs). An IRWE is
any item, paid for by the SSI recipient, which is related to the disability and is used
and needed in order to work. Common IRWEs include:
Sarah has multiple sclerosis which affects her legs. She can no longer drive using her feet and must obtain hand controls for her car at a cost of $2,400. The hand controls will allow her to work the accelerator and brakes with her hands. The company which installs the hand controls agrees to accept $200 per month for 12 months.
Sarah has a $200 IRWE for each month she pays that amount toward the hand controls, as the payment is related to her disability and enables her to get to work. If she continues to earn $685 per month, the IRWE will reduce her gross income to $485. Then an additional $285 will be disregarded, reducing her countable wages to $200. Her SSI check is increased from $270 to $370. She receives a $1 increase in SSI for every $2 in IRWE expenses.
Blind Work Expenses
What if Sarah, in the last example, was legally blind. Instead of paying $200 per month for hand controls, she pays $200 per month for a driver who takes her to and from work. This $200 is available as a blind work expense (BWE).
This BWE is deducted after subtracting the $65 or $85 plus 50 percent of remaining earned income. In Sarah's case, the $685 in gross wages is first reduced by $385 to $300. The $200 BWE is then deducted, leaving her with $100 in countable earned income. Subtracting this from her SSI rate, her SSI check is now $470. The BWE is more generous as it gives Sarah a $1 increase in SSI for every $1 in BWE expenses.
The BWE provisions are also more liberal than the IRWE provisions as they allow the blind worker to take as deductions expenses that are work-related but not connected to the disability. For example, payroll deductions for state and local income taxes and Social Security (i.e., FICA) payments are deductible as BWEs. The cost of meals consumed during work hours is also a BWE deduction.
Other common BWEs include:
Using the BWE deductions, it is not unusual to see a blind SSI recipient earn $20,000 per year or more and still qualify for a small SSI check and automatic Medicaid.
CONCLUSION
Persons who are looking to obtain funding or money to pay for AT devices must look beyond traditional funding sources. They must look for creative ways to pay for the AT which will allow a person with a disability to maximize their independence and employment potential. SSI offers many indirect means to obtain funding for needed AT devices and services as explained above.
SSI REGULATIONS
General:
20 C.F.R. Part 416
Income Rules:
20 C.F.R. §§ 416.1100 - 416.1181
Resource Rules:
20 C.F.R. §§ 416.1201 - 416.1266
NEW
YORK STATE: SSI BENEFIT LEVELS
Effective January 1, 1997
Status Individual Couple
Living Alone
$570
$828.50
Living with Others
$507
$771
Living in the Household of Another
$345.67
$529
Adult Care Facilities & Community Residences
-NY City, Nassau, Suffolk Westchester Counties $919
$1,838
-Rest of NY State
$889
$1,778
NEW
YORK STATE:
PARENT TO CHILD DEEMING BREAK-EVEN POINTS
Effective January 1, 1997
Unearned Income Only: 1 Parent 2 Parents
0 Ineligible Children
$1031
$1273
1 Ineligible Child
1273
1515
2 Ineligible Children
1515
1757
3 Ineligible Children
1757
1999
Earned Income Only:
O Ineligible Children
$2107
$2591
1 Ineligible Child
2349
2833
2 Ineligible Children
2591
3075
3 Ineligible Children
2833
3317
Break-even is the point at which the counted portion of the parent's income is equal to the child's SSI rate. The SSI check is then reduced to zero. This chart cannot be used if the parents have a combination of earned and unearned income.
NEW WEB
PAGE ADDRESS FOR
AT ADVOCACY PROJECT
www.nls.org
In our November/December 1996 issue of IMPACT, we announced the establishment of a Neighborhood Legal Services Web Page on the Internet with a sub-page called the "Assistive Technology Funding Link." We recently changed our Web Page address to the more user-friendly www.nls.org.
Come visit us and let us know if there are other features you
would like us to add to our Page.
What do you Think?
Would it be beneficial to you if we provided space in the newsletter for notes? We welcome your thoughts and suggestions.
Welcome to Neighborhood Legal Services' data bank!
Do you have decisions of interest relating to assistive technology in the following areas? Medicaid, Medicare, Vocational Rehab, VA, Special Education, Physically Handicapped Children's Program, Private Insurance, etc.
Other advocates can benefit from your experience. If you have fair hearing decisions or are involved in or have completed litigation in these areas, we want to know about it.
Please send information to:
FAX: (716) 847-0226
Attn.: Marge Gustas
Handsnet:
HN0627
Neighborhood Legal Services
e-mail: nls01@sprynet.com
Ellicott Square Building
Web Site:
www.nls.org
295 Main Street Room 495
Buffalo, NY 14203
(716) 847-0650
(716) 847-1322 TDD