Work Incentives

Impairment Related Work Expense (IRWE)

Under this provision, Social Security subtracts from earnings the cost of certain items and services required by individuals in order to work when determining how much of the person’s income is “countable.” The purpose of the IRWE is to take the costs associated with the disability into account when assessing the value of the earnings.

For an IRWE deduction to be allowable, the expense must meet five criteria:

1. The expense must directly relate to enabling the beneficiary to work. This means that items the person needs simply to live more independently would generally not qualify as IRWEs. However, some items like out-of-pocket costs for prescription medications do qualify as IRWEs even though the individual would be taking the medication whether or not he or she worked. The person may deduct the non-reimbursed cost of the prescription because the medication helps the individual manage his or her impairment, and such management is necessary for the person to work.

2. The expense has to relate to a medically determinable impairment being treated by a health care provider rather than being a cost that anybody would incur by working. This means that things like FICA deductions or health insurance premiums aren’t permissible as IRWEs.

3. The individual must pay the expense out of pocket and not be reimbursed from another source.

4. In most cases, the individual must pay for the expense in a month during which the individual was working. Social Security may allow the cost of durable goods to be deducted over a 12-month period. Under some circumstances, Social Security may deduct as an IRWE any costly durable goods purchased during the 11-month period preceding the month work started. Beneficiaries may also consider expenses they incur in a month of work but pay for after work stopped.

5. The expense must be “reasonable.” The amount is within reasonable limits if it’s no more than the prevailing charge for 61 the same item or service. Prevailing charges are those which fall within the range of charges that are most frequently and widely used in a community for a particular item or service. The top of this range establishes the standard or normal cost that can be accepted as within reasonable limits for a given item or service.

Here are some examples of Expenses how they are or are not deductible as an IRWE:

TYPE OF EXPENSEIRWE DEDUCTIBLENOT DEDUCTIBLE
Transportation Costs

The cost of structural or operational modifications to your vehicle that you need to travel to work, even if you also use the vehicle for non-work purposes.

The cost of driver assistance, taxicabs, paratransit, special bus, or other types of transportation you need because of your disability rather than the lack of public transportation.

Mileage expenses at a rate determined by us for an approved vehicle and limited to travel to and from work.

 

The cost of your vehicle whether modified or not.

The costs of modifications to your vehicle that are not directly related to your impairment or critical to the operation of your vehicle, for example, paint or pin striping.

Your travel expenses related to obtaining medical items or services.

Attendant Care Services

Services performed in the work setting.

Services performed to help you prepare for work, the trip to and from work, and after work; for example, bathing, dressing, cooking, and eating.

Services that incidentally also benefit your family, for example, meals shared by you and your family.

Services performed by your family member for a cash fee where he/she suffers an economic loss by reducing or ending his/her work to help you, for example, if your spouse must reduce his or her work hours to help you get ready for work.

Services performed on non-workdays or help with shopping or general housekeeping, for example, cleaning and laundry.

Services performed for someone else in your family, for example, babysitting.

Services performed by your family member for payment “in-kind”, for example, room and board.

Services performed by your family member for a cash fee where he/ she suffers no economic loss. This includes services provided by your non-working spouse.

Service Animals

Expenses paid in owning a guide dog or other service animal who enables you to overcome functional limitations in order to work. Deductible expenses include costs of purchasing the animal, training, food, licenses, and veterinary items and services.

Other costs directly related to the care of the animal; such as transportation for training and veterinary services.

Expenses for non-service animal
Medical DevicesDeductible devices include wheelchairs, dialysis equipment, pacemakers, respirators, traction equipment, and braces.Any device you do not use for a medical purpose.
ProsthesisArtificial hip, artificial replacement of an arm, leg, or other parts of the body.Any prosthetic device that is primarily for cosmetic purpose.
Residential Modifications

If you are employed outside of home, modifications to the exterior of your house that permit access to the street or to transportation; for example:

  • Exterior ramps
  • Railings
  • Pathways

If you are self-employed at home, modifications made inside your home in order to create a workspace to accommodate your impairment. This includes enlarging a doorway into an office or workroom and/or modifying office space to accommodate your dexterity.

If you are employed outside of home, modifications to the interior of your house.

If you are self-employed at home, you cannot deduct any modification-related expenses that you will deduct as a business expense when determining SGA.

Prescription Drugs, Over-the-counter drugs & Medical Services

Regularly prescribed medical treatment or therapy that is necessary to control your disabling condition, even if control is not achieved. This includes co-payments and insurance deductibles, but is not limited to:

  • Anticonvulsant drugs
  • Anti-depressant medication
  • Psychotropic medication
  • Blood level monitoring
  • Radiation treatment
  • Chemotherapy
  • Corrective surgery for spinal disorders
  • Counseling, mental health and therapy services
  • Your physician’s fee relating to these services.

Drugs and/or medical services used for your minor physical or mental health problems, for example:

  • Allergy treatments
  • Routine annual physical examinations
  • Routine dental examinations
  • Routine optician services (unrelated to a disabling visual impairment).

Prescription drugs that are a violation of Federal law (e.g. medical marijuana) cannot be deducted as an IRWE, even if allowed by State law.

Diagnostic ProceduresProcedures related to the control, treatment, or evaluation of your disabling condition; for example, brain scans, and electroencephalograms.Procedures not related to your disabling condition, for example, allergy testing.
Non-Medical Appliances & DevicesIn unusual circumstances, devices or appliances that are essential for the control of your disabling condition either at home or at work; for example, an electric air cleaner if you have severe respiratory disease. Your physician must verify this need.

Devices you use at home or at the office that are not ordinarily for medical purposes and for which your doctor has not verified a medical work-related need. These include:

  • Portable room heaters
  • Air conditioners
  • Dehumidifiers
  • Humidifiers
Other Items & Services

Expendable medical supplies; for example, incontinence pads, elastic stockings, and catheters.

Assistive technology that people with disabilities use for employment–related purposes; such as software applications, computer support services, and special tools which have been specifically designed to accommodate the person’s impairment.

An exercise bicycle or other device you use for physical fitness, unless verified as necessary by your physician.

Health insurance premiums.

Software and applications not related to a person’s disability and employment.

Plan for Achieving Self Support (PASS)

How can a PASS help you?

A PASS allows you to set aside other income besides your Supplemental Security Income (SSI) and/or resources for a specified period of time so that you may pursue a work goal that will reduce or eliminate the SSI or Social Security Disability Insurance (SSDI) benefits you currently receive. For example, if you receive SSDI, wages, or other income, you could set aside some of that money to pay expenses for education, vocational training, assistive technology used for employment–related purposes, or starting a business as long as the expenses are related to achieving your work goal.

Social Security does not count the income that you set aside under your PASS when we figure your SSI payment amount. Social Security does not count the resources that you set aside under your PASS when we determine your initial and continuing eligibility for SSI.

A PASS can help you establish or maintain SSI eligibility and may increase your SSI payment amount. For example, if you receive $800 per month in SSDI, you have too much income to be eligible for SSI. But if you otherwise qualify for SSI and have a work goal, you could use some of your SSDI to pay for PASS expenses to help you reach your work goal. Because  Social Security would not count the portion of your SSDI you are using toward your PASS, this could reduce your countable income enough so you could be eligible for SSI.

In addition, other agencies may not count income that Social Security has excluded for a PASS when they determine your eligibility for housing assistance or the Supplemental Nutrition Assistance Program (food stamps).

Who can have a PASS?If you receive SSI or could qualify for SSI after setting aside income or resources so that you may pursue a work goal, you could benefit from a PASS.
What are the requirements for a PASS?

Your PASS must:

  • Be designed especially for you;
  • Be in writing. We prefer that you use our form, the SSA-545-BK. You can get copies of the PASS form, SSA-545-BK, at your local office, from any PASS Expert, or from our website at www.socialsecurity.gov/online/ssa-545.html;
  • Have a specific work goal that you are capable of performing;
  • Have a specific timeframe for reaching your goal;
  • Show what income you receive (other than your SSI payments) and/or resources you have that you will use to reach your goal;
  • Show how you will use your income and resources to reach your work goal;
  • Show how the money you set aside will be kept separate from other funds;
  • Be approved by Social Security; and
  • Be reviewed periodically by us to assure your plan is actually helping you make progress towards your work goal.

Trial Work Period (TWP):

During the TWP, you will receive your CDB regardless of how high your earnings might be, as long as you still have a disability. Your TWP ends when you use 9 TWP months within a 5-year period.

Phase 2-Extended Period of Eligibility (EPE): The month after your TWP ends, you begin a 36-month Extended Period of Eligibility. During the EPE, Social Security will give you CDB for months your countable earnings are below Substantial Gainful Activity (SGA), but they will suspend CDB for months your countable earnings are SGA. An explanation of SGA is provided below. During the EPE, Social Security can easily restart your CDB if your countable earnings fall below SGA. You don’t have to reapply. This is a great safety net.

Phase 3-Post EPE: This phase begins after the 36th month of your EPE. If your work is below SGA, your CDB continues. If your work is SGA, your CDB will terminate. However, there is a work incentive called Expedited Reinstatement (ExR) that may be used to quickly restart the CDB if you can’t maintain SGA level work.

What is EXR?EXR is a safety net for people who successfully return to work and lose their entitlement to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) benefits and payments. If your cash payments ended because of your work and earnings, and you stop work within five years of when your benefits ended, you may be able to have your benefits started again right away through a request for EXR.
How does EXR help you?If you have stopped receiving benefits due to your work, we may be able to restart them again. The EXR provision allows you to receive up to six months of temporary cash benefits while we conduct a medical review to decide if we can reinstate your benefits. You may also be eligible for Medicare and/or Medicaid during this provisional benefit period.
What happens after my request for reinstatement is approved?The month we reinstate your disability payments begins your initial reinstatement period (IRP). The IRP can last for 24 months (not necessarily consecutive), and ends when you have received 24 months of payable benefits. If you receive SSDI benefits, we can pay you for any month during the IRP that your earnings are not substantial gainful activity (SGA) (see SGA). If you receive SSI benefits, the normal income counting rules apply (see SSI ONLY EMPLOYMENT SUPPORTS).