IMPAIRMENT RELATED WORK EXPENSES & SUBSIDIES Vicki Wilson Technical Assistance & Training Disability Policy & Studies University of Missouri-Columbia February 2013
Definition of an impairment related work expense Categories of approvable expenses Examples Definition of a subsidy Examples Definition of unpaid help and Unincurred business expenses
DEFINITION – IRWEIMPAIRMENT RELATED WORK EXPENSE DI 10520.010 • Expense for item or service directly related to enabling a person to work and • Necessary because of a physical or mental impairment; • Can be the impairment of record or any impairment being treated by a physician or health care provider. • May include purchase, installation, maintenance or repair.
IRWE CALCULATION FOR SSDI • Deducted from gross wages to determine amount counted towards SGA; EXAMPLE • Gross wages $1200.00 • Approved IRWE 300.00 • Countable earnings SGA $ 900.00
IRWE CALCULATION FOR SSI IRWE is deducted from gross earnings after earned income and/or general income exclusion. Gross Wages $900.00 Minus Earned Income Exclusion 65.00 Minus General Income Exclusion 20.00 Remainder 815.00 Minus IRWE 300.00 Remainder 515.00 Divided by 2 257.50 Countable earnings 257.50
TYPES OF IMPAIRMENT RELATED EXPENSES • ATTENDANT CARE SERVICES • MEDICAL EQUIPMENT • NON-MEDICAL APPLIANCES & EQUIPMENT • RESIDENTIAL MODIFICATIONS • SERVICE ANIMALS • SPECIAL TRANSPORTATION • TELE-WORK MODIFICATIONS • ROUTINE MEDICAL DRUGS
DEFINITION – HEALTH CARE PROVIDER Must be licensed or registered. • Osteopaths and naturopaths; • Registered dieticians and clinical nutritionists; • Psychologists and licensed counselors; • Chiropractors; • Audiologists; • Dentists; • Physical, occupational and speech therapists;
ATTENDANT CARE SERVICES • Assistance which helps the individual meet essential needs at home or at work; • Examples include, bathing, toileting, dressing, cooking, eating, traveling to and from work; • Services provided at work to assist the individual in performing his/her job (job coach, reader).
ATTENDANT CARE • Deductible if the services are needed in the work setting, or • Assists the individual in traveling to and from work; • Must be paid by the person and not provided by an employer.
ATTENDANT CARE AT HOME • Must be related to preparations for going to work or immediately upon arrival from work; • Examples include bathing, dressing, cooking, eating, administering medications or arranging medical devices; • Services should require no more than 2 hours in the morning and/or evening.
ATTENDANT CARE BY FAMILY MEMBER • If individual pays a family member (anyone related by blood, marriage or adoption) for services it is not a deductible IRWE unless: • The family member has been otherwise employed and suffers economic loss by reducing work hours or terminating employment in order to perform the service and • The payment is made in cash.
MEDICAL EQUIPMENT • Used primarily for medical purposes and withstands repeated use; • Includes wheelchairs, inhalators, nebulizers, prostheses, one-handed keyboards, typing aids, vision and sensory aids for the blind & special tools specifically designed to accommodate the disability; • May also include the costs for training to use the equipment.
NON-MEDICAL APPLIANCES & EQUIPMENT • Devices used that are not ordinarily used for medical purposes; • Examples include portable room heaters, air conditioners, humidifiers, electric air cleaners and posture chairs; • May be approved if there is medical verification that it is essential for the control of the disabling condition.
RESIDENTIAL MODIFICATIONS Employed Outside the Home Modifications that allow the individual to use transportation (installation of exterior ramp or special exterior railings or pathways). Individual Works at Home Modifications to interior of the home pertaining to the work space (enlargement of a doorway leading to an office or modifications of the work space to accommodate dexterity problems. Modifications that can be deductible as a business expense are not deductible as an IRWE.
TELE-WORK MODIFICATIONS • Applies to established tele-work programs designed exclusively for employees with disabilities; • Costs for purchase and maintenance necessary to perform job may be an IRWE. • Examples include internet service, second phone line and computer maintenance.
ROUTINE DRUGS & SERVICES • Over-the-counter drugs & routine medical services if prescribed & necessary to control the disabling condition. • Drugs, medical, dental or optical services not directly related to the impairment are not deductible. • Health insurance premiums (including Medicare) are not deductible.
MEDICAL SUPPLIES & SERVICES • Must be related to the control of disabling condition to enable the person to work. Examples include: • Physical therapy • Catheters • Elastic stockings • Disposable sheets and bags.
EXPENSES FOR SERVICE ANIMAL • Cost of purchasing the animal; • Training; • Food; • Licenses • Veterinary items and services
TRANSPORTATION COSTSMODIFIED VEHICLE • Structural or operational modifications to the vehicle to enable individual to drive or be driven to work. • Cost of modification only; • Maintenance & repair costs for modification may be deductible. • A mileage allowance for travel to and from work is also deductible.
UNMODIFIED VEHICLE Public transportation is available and • Impairment(s) prevent travel by available public transportation; • Individual may deduct a mileage allowance for travel to and from work in an unmodified vehicle as an IRWE; • Must be verified by a physician.
EXAMPLES • Uses a wheelchair & public transportation not equipped for wheelchair use; • Individual cannot manage getting on and off public transportation (impairment prohibits travel from home to bus stop); • Impairment precludes travel on public transportation;
OTHER TRANSPORTATION SITUATIONS • Individual must use driver assistance, taxis, or other hired vehicles to work; • Amount paid to the driver is an IRWE (if relative, other rules apply); • If individual’s own vehicle is used, also deduct a mileage allowance.
SUPPORTED LIVING PROGRAMS • Individual pays part or all of fee required for supportive living arrangement; • Fees may include attendant care or transportation costs; • Evaluation will need to be done on a case by case basis to determine if the fee paid by the individual includes IRWE.
CORRELATING IRWE WITH PERSON’S DISABILITY • SSA verifies IRWE correlates with the DDS’ established medical basis of disability; or • Correlates with any medically established impairment(s) being treated by a physician or health care provider; • May be necessary to submit medical documentation .
DETERMINING WHEN IRWE ARE DEDUCTIBLE • Individual must be working when services are received; • IRWE provisions do not apply during the trial work period; • Amount of deduction must be the same for both SGA determinations and SSI payment purposes; • IRWE does not apply to earned income excluded in a PASS.
RECURRING NON-MONTHLY EXPENSES • Deduct the monthly amount paid under an installment purchase plan for durable medical equipment (including interest); • If individual makes quarterly payments, the payment may be deducted entirely in the month of payment or allocated over the months in the payment period.
NON-RECURRING EXPENSES • Individual has the option of deducting the expense in one month or over twelve month period; • Consider which method will provide more benefit payments.
DOWN PAYMENTS • Deducted entirely in 1 month or allocated over a consecutive 12 month period; • When allocating determine the total payment made over 12 month period beginning with the month of the down payment; • Include in this amount the regular monthly payments; • Divide the total equally over the 12 months.
IRWE PAYMENTS MADE BEFORE WORK STARTED • Must be for a durable item and purchased within 11 months preceding month work starts; • Person must be disabled when payment is made; • Determine total amount of down payment & installment payments made during the 11 months preceding the month work starts.
IRWE PAYMENTS MADE BEFORE WORK STARTED-CONT Allocate total over a 12 month period beginning with month of first payment; Deduct only that part which is apportioned to the month work begins and the following months. Amount may deducted in one month or over 12-consecutive month period.
SUBSIDIES • Only applies to SSI at initial application; • Does not apply during trial work period; • Subsidy exists if employer pays more in wages than the reasonable value of the actual services performed due to the employee’s medical impairment; • Amount of the subsidy is deducted from gross wages to determine if individual is performing SGA.
SUBSIDIES • Only applies to SSI at initial application; • Does not apply during trial work period; • Subsidy exists if employer pays more in wages than the value of the actual services performed due to the employee’s medical impairment; • Subsidy amount is deducted from gross wages to determine if individual is performing SGA.
INDICATION OF SUBSIDY • Employment is "sheltered; or • Childhood disability or mental impairment is involved; or • Marked discrepancy between the amount of pay and the value of the services; or • Allegation that the employee does not fully earn his/her pay (e.g., the employee receives unusual help from others in doing the work); or
EMPLOYER CALCULATES SUBSIDY • Employer designates a specific amount of subsidy considering the value of the employee’s services; • Calculations are more likely to be made by an institutional employer; • Employer will need to provide adequate explanation of how the subsidy was calculated.
SPECIAL CONDITIONS PROVIDED BY EMPLOYER/ORGANIZATIONS • Special conditions and certain special on the job assistance may be considered a subsidy; • Examples include job coaching, special assistance or close and continuous supervision; • If individual is not fully earning his/her wages because work is performed under special conditions, count only wages that are “earned” by the individual.
NON-SPECIFIC SUBSIDY • If employer cannot furnish a specific amount of subsidy, SSA sends SSA-3033 “Employee Work Activity Questionnaire”; • Determination is made by comparing individual’s services with same or similar work in the community; and • Estimating the proportionate value of the individual’s services with the prevailing pay for such work.
UNPAID HELP & UNINCURRED BUSINESS EXPENSES Self-employed individuals may deduct additional items from their net profit in determining substantial gainful activity. • The value of any significant amount of unpaid help; • Unincurred business expenses paid for the self-employed person by another individual or agency; • Soil bank payments.
REMINDER ITEMS • Using IRWE and/or Subsidy can have a major impact on determining SGA for SSDI benefits. • Using IRWE’S can also reduce the amount of earnings used to compute SSI payments; • Clients often need assistance to report the use of these work incentives; • Ask SSA what documentation is needed;
REMINDER ITEMS-Cont. • IRWE’S can be used for both SSDI & SSI at the same time; • Written request for IRWE is submitted to SSA for approval; • Keep receipts for IRWE expenses; • Subsidy is only used for SSI when making an SGA determination in an initial claim;