This publication is sponsored in part by the NYS Developmental Disabilities Planning Council and the Social Security Administration through the NYS Department of Labor (NY Works Project), and is a collaborative publication of Cornell University's Program on Employment and Disability and Neighborhood Legal Services, Inc. (NLS) of Buffalo, NY. The editors and primary authors are James R. Sheldon, Jr. of NLS and Edwin J. Lopez-Soto of Cornell University.

Inside this issue:
SSI AND TRANSITION-AGED SPECIAL EDUCATION STUDENTS
SSI, Social Security, Medicaid and Medicare
A Few Words About SSI's Disability Criteria
Some Basic Financial Rules Which Apply to SSI
SSI's Income and Resource Rules
Eligibility Calculations -
When is a Child Eligible for SSI?
What Happens to SSI and Medicaid if the Child or Young Adult Works?
Keeping Medicaid While Working
Receipt of SSI or SSDI Ensures Automatic Financial Eligibility for VESID and Commission for the Blind Service

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SSI AND TRANSITION-AGED SPECIAL EDUCATION STUDENTS

A Fresh Look at SSI for Teenagers and Young Adults With Disabilities
Using SSI's Work Incentives in the Transition From School to Work

We last addressed these issues in our Spring 2003 issue of the Benefits Planner. Since then a number of SSI rules have been revised, including: SSI's definition of income; SSI's student earned income exclusion rules; the rules governing continuation of benefits, following an age 18 redetermination and finding of not disabled; and the right to exclude lump sum resources when used to pay for education expenses. In addition, the Social Security Administration is devoting significant resources in funding several demonstration projects to assist youth in achieving employment outcomes as adults, including two such projects in New York. Given these developments and others, we decided it was timely to revisit this topic of SSI and transition-aged youth. This article should be viewed as updating and replacing our Spring 2003 issue of the Benefits Planner that last covered this topic.

           The youth of America represent our future. This includes children and young adults with severe disabilities whose potential has long been unrealized. Many young people with disabilities will only realize their dreams of self-support if they receive extra supports along the way: specialized education or training; work or study aids, including assistive technology; cash benefits, at least during a transition period; and adequate health insurance.

          In the fields of special education and vocational rehabilitation, the term "transition" describes the movement of youth with disabilities into adult life. Used broadly, the term captures not only the movement from school to work, but also the movement to all the things we associate with adult life, including independent living and the ability to enjoy the social and recreational opportunities that life has to offer. "Transition planning" describes the process of helping the student and family identify the services and supports that will be needed to go through this transition process. Under New York's special education laws, transition planning is expected to begin as early as age 15 and a written "transition plan" must be in place by the school year in which the student turns age 15. The transition period can extend through the early to mid 20s, even though the role of special education programs will end no later than the school year the student turns 21.

          This article will focus on the transition from school to work and the role that Supplemental Security Income (SSI) and Medicaid will play during those transition years. Our premise is that no transition plan is complete, for a student with a severe disability, without some consideration of SSI and Medicaid. For a smaller number of students, transition planning must also consider the role of Social Security dependents' and survivors' benefits, Social Security Disability Insurance (SSDI), and Medicare. In all cases in which SSI, SSDI, Medicaid or Medicare eligibility is expected, transition planning must consider the special work incentives that may keep cash benefits and health insurance in place and even help to fund some educational and vocational services.

SSI, Social Security, Medicaid and Medicare

          Supplemental Security Income (SSI) is a cash benefit program for the aged, blind, and disabled. It is administered through the Social Security Administration (SSA). Young people can receive SSI if they meet both a disability and financial needs test. If the young person meets this criteria and lives with a parent or parents, the monthly SSI check in 2005 in New York is $602 (federal benefit rate of $579 and a state living with others supplement of $23). If the individual has other countable income, he or she may get SSI at a reduced amount.

          Medicaid, sometimes called Medical Assistance, is a health insurance program administered through the County Departments of Social Services in upstate New York and the Human Resources Agency in New York City. If a child or adult receives a monthly SSI check, even as little as $1, Medicaid eligibility is automatic. Medicaid will pay for doctor visits, hospitalizations, therapies (physical, occupational, speech), home health aides, a home nurse, an intermediate care facility, prescription drugs, transportation, day treatment programs, durable medical equipment (such as wheelchairs, augmentative communication equipment), and other items that are medically necessary. (Note: Effective January 1, 2006, those individuals who are dually eligible for Medicaid and Medicare will be required to get their prescription drugs through Medicare.)

          Social Security benefits are available to some children if they are dependents of a parent who paid into the Social Security trust fund and is now retired, disabled, or deceased. These benefits are based on dependency, not disability, and will continue until a child graduates from high school or turns age 19, whichever occurs first. SSDI benefits are available, as early as age 18, to dependents of a parent who is retired, disabled, or deceased. These benefits are often referred to as Disabled Adult Child's (DAC) benefits or Childhood Disability Benefits (CDB). To receive DAC benefits, the individual must have a disability that began before age 22.

          An individual can receive both SSDI and SSI. For example, Janice, age 19, lives with her parents and receives $420 in SSDI/DAC benefits. The SSI program will disregard the first $20 of her SSDI benefits ($420 - 20 = $400). It will then pay her a monthly SSI check of $202 ($602 - 400) and she will qualify for Medicaid automatically.

          Medicare is typically associated with receipt of Social Security. An SSDI beneficiary will qualify for Medicare after 24 months of eligibility. Medicare Part A, covering many inpatient services, is automatic and cost-free. Medicare Part B, covering certain care in the community, is optional and subject to a $78.20 monthly premium in 2005. This premium can be paid by the Medicaid program, under either the Qualified Medicare Beneficiaries (QMB) or Selected Low-Income Beneficiaries (SLMB) programs if the individual has limited income and resources. Medicare coverage is not as comprehensive as that offered through Medicaid. Medicare is also available to persons with end-stage renal disease even if they do not receive SSDI benefits.

          The new Medicare Part D Prescription Drug program goes into effect on January 1, 2006. At that time all Medicare beneficiaries will be entitled to prescription drug coverage. Persons who receive both Medicare and Medicaid (dual eligible beneficiaries) will lose their Medicaid prescription drug coverage, and have to transition to a different drug coverage provided by a Medicare plan. This will have an impact on all recipients of Social Security who work, including transition aged youth. The good news is that individuals who are dually eligible for Medicare and Medicaid will automatically qualify for Part D's low-income subsidy program, facing no premiums, no deductibles, and only minimal copayments on their prescriptions.

A Few Words About SSI's Disability Criteria

          A detailed discussion of SSI's rules for establishing disability is beyond the scope of this article. However, a few basic principles can be stated. For adults, i.e., persons age 18 or older, the SSI program will apply the same standard of disability as the SSDI program. This adult disability standard is very strict. Generally, a person is not considered disabled if capable of some significant work that exists in the national economy. For children under 18, the SSI program applies a somewhat different standard of disability. Although that standard can vary from disability to disability it is, typically, even more strict than the disability standard for adults.

          The Age 18 Redetermination. If a child is approved for SSI, upon reaching 18 he or she will be scheduled for an "age 18 redetermination." This means that the case will be reviewed to see if the young adult is eligible under the adult disability standard. This is different from the "continuing disability review," the periodic review (generally, every three to five years) that every SSI or SSDI beneficiary will face to determine if their disability continues. If the review results in a finding of disabled under the adult criteria, SSI benefits will continue. If the review results in a finding of not disabled under the adult criteria, SSI benefits will ordinarily be terminated subject to any appeal rights.

          Section 301 and the right to continued SSI following a finding of not disabled. In about 30 percent of the age 18 redetermination cases, SSA can be expected to find that the individual is not disabled under SSI's criteria for adults. In those cases, a work incentive known as section 301 may allow benefits to continue if the young person is either involved in a vocational rehabilitation program approved by SSA or, under recent amendments to SSI's regulations, if the student is still in a special education program and receiving services pursuant to an individualized education program (IEP).

          Appeals. What if a child seeking SSI or an adult seeking SSI or SSDI is denied benefits? What if upon review, SSA finds that the person is no longer disabled and plans to terminate benefits? SSA's rules provide for an appeals process and a majority of individuals who appeal win their appeals. Free legal services are available through the Disability Advocacy Program (DAP) to assist individuals with appeals. For help in locating the DAP program in your area, call the State Work Incentives Support Center at 1-888-224-3272 (toll free).

Some Basic Financial Rules Which Apply to SSI

          SSI is a program for the financially needy. SSI can be the only source of income or can supplement some other source of income such as Social Security benefits. In New York, the SSI program's monthly payment rates for 2005 are as follows:

Category                                                  Total SSI Payment

Individual living alone                                         $666
Individual living with others
and sharing household expenses                          $602
Individual living with others and
receiving support and maintenance                      $409
Individual living in state-licensed
community residence in Upstate NY                  $973
NYC, Nassau, Suffolk,
Westchester Counties                                      $1003

The $602 rate is the typical maximum payment rate for a child living at home with a parent or parents.

          The following is a simplified SSI calculation for an adult with unearned income. Joe, age 18, lives with his parents and receives $320 in SSDI benefits. The first $20 will be disregarded ($320 - 20 = $300) and the remainder will be subtracted from the maximum SSI rate of $602 since Joe is paying his share of household expenses. The SSI check will be $302 ($602 - 300). Since Joe qualifies for SSI, he will get Medicaid automatically. As we note below, if Joe was under 18 certain income of his parent or parents may be counted against his SSI payment rate as well.

SSI's Income and Resource Rules

          SSI's Income Rules. The SSI check is calculated by considering all available income. For children under 18, part of the parents' income is counted if that income is high enough. For children 18 or older, the parents' income is not counted. This rule is very important. When planning a student's transition from high school to college, work, or other adult activities, you can assume that a child with a severe disability is likely to be eligible for SSI and Medicaid at age 18, even if the parents' income is very high.

          The SSI program defines income as anything received in cash or in kind that can be used to meet a person's needs for food or shelter. "In kind" income includes gifts of food or shelter. Be careful with gifts from relatives or fund raisers for children with disabilities. If the cash received can be used for food or shelter, it is considered income.

          Definition of income changed, clothing no longer counted. Prior to April, 1, 2005, income was defined to include anything that can be used to purchase food, clothing, or shelter. Effective April 1, 2005, clothing has been removed from that definition. This means that gifts of clothing or financial assistance that comes in the form of clothing will no longer count as income to the SSI recipient.

          For a child under age 18, what parental income is counted in determining SSI eligibility? Here is where the rules get extremely complicated and confusing. While we will not attempt to explain this calculation, a few basic principles should be understood.

          The concept of "deeming." SSI assumes that certain money is needed to meet the needs of mom, dad, and the other kids. After assigning specific amounts of the parent(s)' income to the other household members, the remaining income is deemed available to meet the needs of the child with a disability. A child is entitled to the maximum SSI amount for a person in his or her living circumstances minus income of parent(s) which is "deemed" available to the child. If the child lives with the parents and $300 of parental income is deemed to the child, the child will usually get a monthly SSI check of $302 (maximum amount of $602 - 300). Under SSI's rules, the income of a parent or a stepparent is counted or "deemed" only if the parent or stepparent lives in the same household as the child. If a parent lives elsewhere, that parent's income will only be counted if it is actually paid to support the child, usually in the form of child support payments.

          SSI's Resource Rules. A person is only eligible for SSI if resources are within certain limits. For children under 18, both the child's and the parents' resources are counted if the parents' resources are high enough. For children 18 and older, the parents' resources do not count. Resources include cash, other liquid assets, or any real or personal property that an individual owns and can convert to cash for support and maintenance. An individual may have up to $2,000 and a couple may have up to $3,000 in resources. For children under age 18, each child may have $2,000 in resources. A parent may have an additional $2,000 if there is one parent and $3,000 if there are two parents. For example, if John and Mary have only one child, Jimmy and they apply for SSI benefits on his behalf, the family could have $5,000 in resources.

          Many resources are exempt and are not counted by the SSI program. Here are some examples of exempt resources:

•  The entire value of a house which a person, or a child's parent(s) uses as a home
• An automobile of any value used by or to transport the person with a disability
• An additional automobile (with equity value of less than $4,500) necessary for travel to employment or medical treatment, or which is modified for use by a person with a disability
• A burial plot
• A $1,500 burial reserve

Two sets of exclusions apply, one for the parent(s) and one for the child, except for the home (one per family).

Eligibility Calculations - When is a Child Eligible for SSI?

          How much will the child get each month? When will the parent(s)' income be too high for the child to qualify for SSI? The formula for calculating a child's SSI check is very complicated and will not be presented here. There are, however, some examples listed below which give an idea when families can expect their children with disabilities to be eligible for SSI.

          "Break even" points for deeming of parent(s)' income. A "break even point" is the point at which the countable monthly income of the parent(s) is exactly equal to the maximum SSI rate for the child and no SSI benefits would be paid. For a family with less income than the break-even point, the child will be eligible for some SSI. The following tables and examples show what this means for households of various sizes and with various amounts of income. These tables can only be used when a parent has either unearned income only or earned income (wages) only.

Table #1: Break-Even Points for 2005 -- Unearned Income Only

Table #2: Break-Even Points for 2005 -- Earned Income -- Wages Only

          Examples when parent(s) have unearned income only. Example # 1: A family of four (two parents, two children, with one child seeking SSI) which has less than $1,801 per month in unearned income, or $21,612 in annual income from a source like Social Security, can get SSI (and automatic Medicaid) for the child with a disability. Example # 2: A family of three (one parent, two children, with one child seeking SSI) which has less than $ 1,511 per month, or $18,132 in annual unearned income can get SSI (and Medicaid) for the child with a disability.

          Examples of parent(s) who have earned income only. Example # 3: A family of four, with two parents and two children (one child seeking SSI), which has less than $3,357 income per month, or $40,284 per year from employment can get SSI (and automatic Medicaid) for their child with a disability. Example # 4: A family of four, with one parent and three children (one child seeking SSI), which has less than $3,067 income per month, or $36,804 per year from employment can get SSI for the child with a disability.

What Happens to SSI and Medicaid if the Child or Young Adult Works?

          The SSI program will exclude and not count the first $65 of monthly gross wages (or, will exclude $85 if the person has no unearned income). An additional 50 percent of gross monthly wages will also be excluded. What remains is subtracted from the SSI base rate to determine the SSI check. The first example below shows how wages are treated in the case of the typical adult. The two other examples show how the student earned income exclusion, when available, dramatically changes the calculation.

          Adult, no student earned income exclusion. Lydia, age 25, has a mental illness and receives an SSI check of $666 per month as she lives alone. She goes to work and earns $685 per month in gross wages. Here is how the SSI program will calculate her check:

Step 1           Unearned income                         None

Step 2           Earned income                             $ 685
                     General income exclusion
                     (not otherwise used)                        - 20
                     Earned income exclusion                  - 65
                                                                         $ 600
                     Additional 50 % exclusion             - 300
                     Counted                                       $ 300

Step 3           Counted unearned income                 $ 0
                     Counted earned income                    300
                     Total counted income                    $ 300

Step 4           Base SSI rate                               $ 666
                    (NY State, living alone)
                     Counted income                            - 300
                     SSI benefit                                    $ 366

Lydia will get a $366 SSI check and her Medicaid will continue.

          The Student Earned Income Exclusion. To qualify for this exclusion, the student must be under age 22 and regularly attending a school, college, university, or course of vocational training. During calendar year 2005, the first $1,410 of gross monthly earnings are excluded, up to a maximum of $5,670 per year, with the amount adjusted each year based on a cost-of-living index.

          Prior to March 2005, an individual did not qualify for the student earned income exclusion if he or she was married or was the head of a household. This meant that the young college student who moved into their own apartment could get the SSI living alone rate but could not qualify for the student earned income exclusion. Now, marriage or head of household status are no longer a barrier to getting this special exclusion.

          High school student, part-time work. Larry is a 17 year old high school student with a learning disability. He receives the full $602 monthly SSI check as his parents' income is not very high. Larry works at a summer job and earns $685 gross during both July and August. As noted in the previous example, if Larry was an adult and received no student earned income exclusion, $300 of his earnings would count and his SSI check would be reduced to $302 per month. Since Larry qualifies for the student earned income exclusion, none of his monthly wages will count (i.e., the wages are below $1,410 per month) and his countable income will be $0 per month. His SSI check will remain at $602 and his Medicaid will continue.

          College student, significant summer wages. Jose, age 20, is deaf and receives a monthly SSI check of $666 as he lives alone in an apartment. He attends college full time and does not work during the school year. During June, July, and August, he earns $1,725 gross each month (a little more than $10 per hour for a full time job). This will be Jose's SSI budget with the student exclusion:

Step 1           Unearned income                                    None

Step 2           Earned income                                        $ 1725
                     Student earned income exclusion               - 1410
                                                                                       $315

                     General income exclusion
                     (not otherwise used)                                     - 20
                     Earned income exclusion                              - 65
                                                                                     $ 230
                     Additional 50 % exclusion                          - 115
                     Counted                                                   $ 115

Step 3           Counted unearned income                             $ 0
                     Counted earned income                               115
                     Total counted income                               $ 115

Step 4           Base SSI rate                                          $ 666
                    (NY State, living alone)
                     Counted income                                      - 115
                     SSI benefit                                              $ 551

Jose gets a monthly SSI check of $551, despite monthly earnings of more than $1,700, and his Medicaid will continue. Since Jose is allowed a maximum yearly exclusion of $5,670 and will use $4,230 during the summer months, he will have an additional $1,440 to exclude in wages if he works during the Fall semester.

          In this example, Jose is a beneficiary of changes in the student earned income exclusion rules that allow him to use the exclusion even though he lives alone and is considered a head of household. Prior to March 2005, Jose could not have used the exclusion.

Keeping Medicaid While Working

          Section 1619(b) Medicaid. This special work incentive allows Medicaid to continue when the person loses SSI cash benefits because of wages. So long as the person has a continuing disability, would still be eligible for SSI if not for the wages, and has annual wages of $37,575 or less in 2005, Medicaid should continue. Future Medicaid eligibility under section 1619(b), or under the new Medicaid Buy-In provision (see below), will be an important part of transition planning for many students. As young adults, many of these students will not be able to work without Medicaid in place.

          Example # 1: Joanna, age 24 and a recent college graduate, received a $666 SSI check until she went to work. Medicaid is important to Joanna, who has cerebral palsy, as it pays for 30 hours per week in home health services and will pay for her power wheelchair when it needs to be replaced. She goes to work and earns $1,500 in gross wages per month ($18,000 per year). At this level of wages, she will lose her right to an SSI check. For a person who lives alone and is not eligible for the student earned income exclusion (e.g., persons age 22 or older), $1,417 or more in monthly wages would result in countable income of $666 or more and ineligibility for SSI based on 2005 rates. Even though Joanna will lose her SSI check she will remain eligible for Medicaid under the 1619(b) program, if she is still disabled, has gross wages below $37,575 per year, and would still be eligible for SSI if she did not have wages.

          Example # 2: Gloria, age 19, lives with her mother and receives $520 in SSDI benefits and $102 in SSI. She began to receive SSDI/DAC benefits on the Social Security record of her deceased father 12 months ago. Gloria depends on Medicaid to pay for counseling and medication to treat her mental illness. She left school at age 18 and does not attend any college program. Based on 2005 SSI rates, Gloria will lose her SSI payment if her gross wages from a job are $269 or more per month (a little more than 12 hours per week at the minimum wage). She would not be entitled to the SSI student earned income exclusion because she is no longer a student.

          Assume Gloria loses her SSI check by going to work and earning $400 per month. She will be able to keep her Medicaid, through the 1619(b) program, if she is still disabled and would still be eligible for SSI if she did not have wages. Her annual income from wages is clearly below New York's $37,575 threshold for 1619(b). Gloria's right to an SSDI check would not be affected under these facts, as her monthly wages are below the 2005 substantial gainful activity figure of $830 per month.

          (Based on these facts, Gloria will become eligible for Medicare in one year, i.e., two years after she first became eligible for SSDI benefits. At that time, she will be required to obtain her prescription drug coverage through the Medicare Part D program. We can help her to plan for this eventual transition to the Part D program.)

          The Medicaid Buy-In Program. The Medicaid Buy-In program provides Medicaid to workers over the age of 16 and under the age of 65 who meet the SSI definition of disability. Thus, it is very important for youth in transition. To be eligible the individual must have a disability as defined by the Social Security Administration and be engaged in paid work (includes part-time and full-time work). Additionally, there is no substantial gainful activity rule (i.e., an individual can earn more than $830 per month in 2005 and still be eligible for the buy-in). Furthermore, the individual's gross income may be as high as $48,636. Finally, the individual must have non-exempt resources that do not exceed $10,000.

          As you can see, the Medicaid Buy-in with its higher income and resource thresholds can help youth in transition with higher income than the typical SSI recipient, including deemed income. It can also help youth with higher resources than the typical SSI or Medicaid recipient.

Receipt of SSI or SSDI Ensures Automatic Financial Eligibility
for VESID and Commission for the Blind Services

          A key component of any transition plan, for a special education student, is the linkage to either the Office of Vocational and Educational Services for Individuals with Disabilities (VESID) or the Commission for the Blind and Visually Handicapped (CBVH) at the earliest possible date (no later than the last year of high school). Although VESID and CBVH can fund a wide array of services, most services (e.g., college tuition, transportation, assistive technology) require that the individual meet financial need requirements. [For a more detailed discussion of VESID and CBVH, see the Fall 2001 issue of the IMPACT newsletter, available on the Neighborhood Legal Services website at: www.nls.org/at/atfall01.htm.]

          Federal regulations governing VESID and CBVH provide that recipients of either SSI or SSDI benefits are automatically held to meet the agency's financial need criteria. Absent eligibility for SSI or SSDI, both agencies would consider the income and resources of the parents in determining eligibility of most children and young adults with disabilities. VESID's new policies recognize that individuals who no longer get an SSI check, but remain eligible for Medicaid through section 1619(b), are protected by this rule and automatically meet financial need criteria.

CONCLUSION

          This article has focused on some of the core issues involving transition-aged students and SSI eligibility. It has also focused on two of the key work incentives available to the student or young person who goes to work - - the student earned income exclusion and 1619(b) Medicaid. The reader is encouraged to review the other newsletters in our Benefits Planner series for a fuller appreciation of the SSI, SSDI, and Medicaid rules that apply to youth with disabilities. As always, if you have questions concerning any of the issues discussed in this newsletter, call our statewide work incentives hotline, toll free, at 1-888-224-3272.

The NY State Work Incentives Support Center will provide statewide services, including: training through traditional means and through use of the latest technology for distance learning; a toll-free technical assistance line, 1-888-224-3272 (English and Spanish); and a quarterly newsletter, The Benefits Planner. To subscribe to the Center's listserv, send your name and email address to tpg3@cornell.edu. To request a print copy of this newsletter, contact the toll-free number above.

If you have special needs and would like The Benefits Planner sent in a special format, would like our Spanish version or would like the newsletter delivered by email, please call our toll-free technical assistance line, 1-888-224-3272.

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FOR TECHNICAL ASSISTANCE IN NEW YORK STATE CALL
1-888-224-3272
OR CONTACT US BY EMAIL: nywisc@nls.org

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This newsletter will provide valuable information on how work for persons with disabilities affects government benefits, with an emphasis on the Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) work incentives. Each newsletter will contribute to an ongoing dialogue on topics related to benefits and work. Back issues will appear on the Cornell University website, www.ilr.cornell.edu/ped and on the Social Security section of the Neighborhood Legal Services website, www.nls.org.

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