Question: Is Rental Income Earned Income?

In most cases this question relates to a beneficiary who owns a house that he/she rents out, or when a beneficiary lives in a house and rents out a room or owns a duplex that he/she lives in and rents out the other unit.

The basic rule of thumb in cases like these is that net rental income counts as unearned income (meaning not subject to FICA per POMS Section RS 02505.240) unless it is earned income from self-employment (e.g., someone who is in the business of renting properties). This is actually stated very clearly for SSI recipients in the POMS.

Of course, for SSI recipients, unearned income is treated less favorably than earned income since only the $20 General Income Exclusion is applied to unearned income. In addition, if the SSI recipient owns a home which he/she does not live in because it is rented out, then the property would be a countable resource.

If the SSI recipient is actually self-employed and in the business of renting property, then any Net Earnings from Self-Employment (NESE) the business generates would be decreased by any applicable work incentives when SSA is determining countable NESE. The countable NESE would affect the SSI cash payment in the usual manner.

On the Title II side, it is more complicated. There is no specific citation in the DI section of the POMS saying that rental income is not counted as earned unless the beneficiary is self-employed in the business of renting properties. This is implied when SSA defines what to count by describing earnings or self-employment income as income a person receives in exchange for his/her work activity – it is remuneration for work performed. In most cases, simply renting out one’s home or a portion of one’s home would not constitute work activity – it is too passive and is not subject to FICA. Unless a beneficiary is engaged in the business of renting property, the money received from renting a single house would typically NOT be considered earned income. If the rental income is not considered to be earned, then it would not be considered when SSA makes TWP or SGA determinations.

Of course, there are times when the situation becomes more complicated. What if the person rents out multiple pieces of property – does that mean the person is in the rental business? SSA must make the decision on a case-by-case basis. They first look to see if the beneficiary is engaged in “trade or business.” To make this determination, the SSA asks the following questions:

· Is there a good faith intention of making a profit or producing income?

· Is there continuity of operations, repetition of transactions, or regularity of activities?

· Are the functions being performed a regular occupation or profession?

· Is the beneficiary holding himself out to others as being engaged in the selling of goods or services?

(From POMS Section RS 01802.002)

SSA is looking for an overall pattern with these questions. One ‘yes’ answer to these questions is insufficient to make a determination of self-employment, but they need not all be answered with “yes” for self-employment to be determined to exist. If SSA determines that the beneficiary is self-employed, any countable NESE from the business will be considered during TWP and SGA determinations.

REMEMBER: Determinations of what is or is NOT earned income can only be made by SSA. If there is any doubt, refer the beneficiary to the local Social Security Field Office for clarification. If the beneficiary does not agree with the determination rendered by SSA, he/she may request reconsideration as part of the standard appeals process.

Any questions may be directed to: rsi5@srt.com

Trial Work Period (TWP) in a Nutshell

The TWP allows you to test your ability to work for at least 9 months. During your TWP, you will receive full SSDI benefits regardless of how high your earnings might be, as long as you report your work activity and you have a disabling impairment.

Your TWP starts the first month you are entitled to SSDI benefits or the month you file for benefits, whichever is later. The TWP continues until you accumulate 9 months (not necessarily consecutive) in which you perform what we call “services” within a rolling 60-month period. We use this “services” rule only to count TWP months.

In 2011, we consider your work to be “services” for the TWP if your gross earnings are more than $720 a month, or if you work more than 80 hours in self-employment in a month.

When your TWP is complete, you may become eligible for other employment supports and we consider whether any of them apply to your situation.

Kjellan Loe
Rehab Services, Inc.


Any questions may be directed to: rsi5@srt.com

Will SSDI Always Be There For ME?

The Red Books Are Coming!!!

The electronic version of the 2011 Red Book is now available on the Social Security Administration website:

http://www.socialsecurity.gov/redbook/

The Red Book is a publication of the Social Security Administration that describes employment supports and work incentives for persons with disabilities under the Social Security Disability Insurance and Supplement Security Income programs.

Any questions may be directed to: rsi5@srt.com

IRWE for Transportation Provided By Parent

Question:

"I receive SSDI and SSI benefits and my medical impairment prevents me from driving a motor vehicle. My mother drives me to and from my place of employment, which is about 10 miles from my home. Can I deduct any of the transportation costs from my earnings to lessen the impact that my earnings have on my SSDI and SSI benefits?"

Answer:

Maybe. An impairment-related work expense (IRWE) can be useful to beneficiaries of Social Security Disability Insurance (SSDI) and to recipients of Supplemental Security Income (SSI). If you receive SSDI benefits, the Social Security Administration will deduct the IRWE when it determines whether you performed substantial gainful activity. Also, if you receive SSI, the SSA will exclude the IRWE from your earned income when figuring the monthly SSI payment to you.

In limited situations, you may deduct from your gross earnings an IRWE for transportation costs when the transportation is provided by a family member. If a person with a disability pays a member of his family to drive him or her to and/or from work, such payment will generally not be deductible as an IRWE unless:

· It is established that the family member has been otherwise employed and suffers economic loss by reducing the number of work hours or terminating his or her own employment in order to perform such service; and

· The payment is made to the family member in cash (including checks or other forms of money); payment in kind (e.g., room and board) is not deductible.

Source: The Social Security Administration’s Program Operations Manual System (POMS) DI 10520.010D.3.5 and DI 10520.030H.

Any questions may be directed to: rsi5@srt.com

No Changes in COLA, SGA, etc for 2011

Any questions may be directed to: rsi5@srt.com

How do payments from Programs for Older Americans affect SSA disability benefits?

Beneficiaries aged 55 and older who are working under government-sponsored training programs, referred to as Programs for Older Americans, or Senior Community Service Employment Programs (SCSEP), need accurate information as to how wages and other payments under these programs affect SSA disability benefits. In order to know this, it is important to understand the relevant POMS citations in both the Title II and SSI programs.

These programs are established in chapter 35 of title 42 of the U.S. Code, Programs for Older Americans. There are different programs established under the Older Americans Act, such as Foster Grandparents, and volunteer programs. The focus of this entry is employment programs. Here is a summary of Chapter 35, subchapter IX:

Programs for Older Americans, Subchapter IX – Community Service Employment Program

This program was established to foster individual economic self-sufficiency and promote useful opportunities in community service activities, including community service employment, for individuals who meet the eligibility criteria. Criteria include: age 55 or older, has

income of not more than 125% of the poverty level (excluding income that is unemployment compensation, SSI, veteran’s benefits paid from the VA, or 25% of SSA Title II benefits). The program also ensures that safe and healthy conditions are provided and will ensure that the participants will be paid wages that shall not be lower than whichever is highest of: the minimum wage under the Fair Labor Standards Act, the state or local minimum wage, or the prevailing rates of pay for individuals in similar public occupations by the same employer.

Here is a link for more information about Chapter 35: http://www.law.cornell.edu/uscode/html/uscode42/usc_sup_01_42_10_35.html

Under the Title II program, (SSDI, CWB, DWB), the relevant POMS citation that provides information about evaluating payments under these programs is DI 10505.025 – Special Employment Situations.

Here is the relevant section:

1. Job training and employment programs

a. General

Federal funds have been made available to State and local agencies to provide job training and employment opportunities for economically disadvantaged, unemployed and underemployed people to prepare them to function acceptably in various kinds of competitive employment.

b. Documentation and evaluation

The work activity of a person in a government-sponsored job training program must be evaluated under the usual criteria for earnings and services as discussed in DI 10505.001 through DI 10505.020, in order to determine whether he or she is engaging in SGA. A decision as to whether the work is SGA, and when such SGA may have begun, should be based on information as to the person's “countable earnings” and performance. Workers under any of these programs should not, therefore, be treated as a group. Rather, each case should be evaluated on its own merits.

The “countable earnings” of a person involved in a government-sponsored job training program are determined in the same manner as for all types of employees, as discussed in DI 10505.001. It should be noted, however, that subsidies are frequently involved in work for such programs. It is important, therefore, to consider this possibility and, when appropriate, to develop thoroughly the issue of subsidy in accordance with DI 10505.010A.

If, after the issue of subsidy (and/or impairment-related work expenses (IRWE)) is resolved, a person’s “countable earnings” are not more than the amount shown in the SGA Earnings Guidelines, and if the work does not meet either the test of comparability or the test of worth of work in circumstances where these tests apply (see DI 10505.020C.), the work activity will not be found to represent SGA. (See DI 10505.015 for when averaging earnings applies.)

Under some government-sponsored programs, part of the participant's time may be devoted to on-the-job training. Whether the person's activity is all work or whether such training is also involved, all of the SGA tests as discussed above apply.

For purposes of charging months of the trial work period (TWP), the provisions in DI 13010.050 apply.

In other words, under the Title II program, the work activity of a beneficiary participating in a program for older Americans will be evaluated in the same manner as other employment situations, with special attention paid to the possibility of subsidy. Payments that do not reflect work activity, such as reimbursement for expenses, would not be counted.

Under the SSI program, there may be a distinction between earned and unearned income, and what income is “countable”. The relevant citation here is: SI 00830.640 Programs for Older Americans:

A. INTRODUCTION

The Federal Government through the Administration on Aging is involved in a variety of programs for older Americans. The programs may be operated by State or local governments or community organizations. Some types of programs are:

· health services;

· nutrition services (see SI 00830.635);

· legal assistance; and

· community service employment.

B. POLICY

1. Wage or Salary

A wage or salary paid under chapter 35 of title 42 of the U.S. Code, Programs for Older Americans, is earned income subject to the general SSI policies on earned income.

2. Not a Wage or Salary

Anything provided under chapter 35 of title 42 of the U.S. Code, Programs for Older Americans, other than a wage or salary is excluded from income.

C. PROCEDURE

1. Verify Program

Use documents in the individual's possession, contact with the provider or a local council on aging, or a precedent to verify that the program is funded by the Federal Government under chapter 35 of “The Older Americans Act ” and whether a wage or salary is paid.

2. Wage or Salary

See SI 00820.100 ff.

3. Not a Wage or Salary-Accept Allegation

Accept the individual's allegation of receipt of anything other than a wage or salary and exclude it without further development unless you have reason to question the allegation.

To summarize, wages that an SSI beneficiary receives through a program for older Americans would count as earned income, and all of the earned income exclusions would apply. Any other type of payment would not count either as earned or unearned income. This is great news for SSI beneficiaries, as earned income is treated more favorably than unearned income under this program.

Any questions may be directed to: rsi5@srt.com

Medicare Savings Programs

The Medicare Savings Programs provide special limited Medicaid coverage to assist with certain costs for Medicare beneficiaries with low income and few assets. In North Dakota, these programs include the following.

The Qualified Medicare Beneficiaries (QMB) program pays for Medicare premiums, deductibles, and coinsurance payments. The income level (maximum income) for QMB eligibility is equal to 100 percent of the poverty level applicable to a family of the size involved. For 2009/2010, the monthly income level is $903 for a one-person unit and $1,215 for a two-person unit.

The Specified Low-Income Medicare Beneficiaries (SLMB) program pays only the Medicare Part B premiums for the beneficiaries. Individuals who have SLMB coverage may also have coverage under another Medicaid program, such as the Workers with Disabilities Medicaid buy-in program, if they meet the eligibility criteria for the other Medicaid program. The income level for SLMB is equal to 120 percent of the applicable poverty level. For 2009/2010, the monthly income level is $1,083 for a one-person unit and $1,457 for a two-person unit.

The Qualifying Individuals (QI) program pays only the Medicare Part B premiums for the beneficiaries. However, unlike SLMB coverage, QI coverage is not available to beneficiaries who are in receipt of any other Medicaid benefits for the same period. The income level for QI is equal to 135 percent of the applicable poverty level. For 2009/2010, the monthly income level is $1,219 for a one-person unit and $1,640 for a two-person unit.

Effective January 2010, the asset limits for the Medicare Savings Programs are: $6,600 for a one-person unit ($4,000 in 2009); or $9,910 for a two-person unit ($6,000 in 2009).

Individuals who are covered by one of the Medicare Savings Programs are automatically entitled to extra help (the low-income subsidy) in paying for Medicare prescription drug coverage (Medicare Part D).

Sources: Medicaid Program Policy Manual 510-05-60 (Medicare Savings Programs) and 510-05-85-40 (Income Levels); Medicare and You 2010, page 79.

Any questions may be directed to: rsi5@srt.com

A FREE WISE WEBINAR HIGHLIGHTING SUPPORTS AND SERVICES FOR TICKET HOLDERS WITH MENTAL HEALTH DISABILITIES

JUNE 23, 2010 FROM 3:00 – 4:30 PM (EASTERN)

If you are a person with a mental health disability interested in learning about the Ticket to Work Program or other Social Security Work Incentives, you can attend a FREE Web-based education event on work incentives! This first-ever Mental Health Work Incentive Seminar Event (WISE) Webinar will feature presentations by people who know the ins and outs of all available work incentives, including the Ticket Program. A success story of a Social Security beneficiary who used work incentives successfully will be shared. We will also be joined by a mental health peer counselor who currently works encouraging other people with mental health disabilities in their recovery through work.

Want specific information on how work and work earnings will impact your personal Social Security disability benefits? Please visit www.ssa.gov/work or www.choosework.net to get more information and to find a list of resources available in each state, including the Work Incentives Planning Assistance (WIPA) projects, professionals who can provide more information on your individual situation.

Register for this free WISE Webinar or find WISE events in your area at www.cessi.net/wise.

Approximately 2 days before the event, all those who have registered will receive an e-mail message with instructions on how to log in to the Webinar.

If you have questions, please email wise@cessi.net or call 1-877-743-8237 (v/tty).

Any questions may be directed to: rsi5@srt.com

2010 Mecicare Part B Premium Costs

Medicare Part B Premium Fact Sheet

Any questions may be directed to: rsi5@srt.com

FAQ's About Taxes and SSA Disability Benefit Programs

These common questions about taxes and disability benefits that we hear as CWIC's around this time of the year are worth a lengthy post.

The text below was produced by our National Training Center at Virginia Commonwealth University and, although a bit lengthy - it is quite thorough.

If you have a question about taxes and SSA disability benefits, there's a good chance you'll find it here. If you can't find it here, please feel free to contact me.
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QUESTION: I have been getting services from my local Work Incentives Planning and Assistance (WIPA) project – can my CWIC help me with tax issues related to my disability benefits?

Your CWIC can offer you some very general information about certain tax issues related to SSA disability benefits, but the assistance provided will be very limited. CWICs are not qualified tax professionals and are not trained to assist with tax issues – even those related to SSA disability benefits. Your CWIC will probably refer you to either the IRS or a local tax professional if you have questions requiring a response beyond what is contained in this document.

QUESTION: Are my disability benefits taxable?

Well, that depends on which benefits you get and how much your total income is. If you receive Supplemental Security Income (SSI), you will owe no Federal or State taxes on this benefit. If you have other forms of income in addition to your SSI (such as wages) you may owe taxes on that income.

If you receive a title II disability benefit (SSDI, CDB or DWB), then you may have to pay taxes on your benefits, depending on how much your total income is. SSA reports that about one-third of their current beneficiaries do pay taxes on their benefits. Here are the situations in which taxes may be due:

· If you file a federal tax return as an “individual” and your income is more than $25,000, you have to pay taxes.

· If you file a joint return, you may have to pay taxes if you and your spouse have a combined income that is more than $32,000.

· If you are married and file a separate return, you will probably pay taxes on your benefits.

Beneficiaries who are unsure about whether or not they have to pay taxes should contact the Internal Revenue Service (IRS) or seek the services of a qualified tax professional.

­­­­­­­­­­­­­­­QUESTION: I am getting a Federal income tax refund this year. Do I need to report this to SSA?

No, you do not need to report this no matter whether you are on SSI or a title II disability benefit.

Federal and/or State income tax refunds are specifically disregarded as a form of income by the SSI program. This is because SSI counts your gross income when it is received so your SSI check has already been adjusted without regard to any taxes withheld. However, if you retain your income tax refund and your countable resources exceed the limit ($2,000 for an individual or $3,000 for a couple) you could become ineligible for SSI and Medicaid.

NOTE: Income tax refunds are not income for SSI purposes even if the income taxes were excluded from countable income as Blind Work Expenses.

In the title II program, SSA is only interested in earned income – money you receive in exchange for work performed. Income tax returns would not be considered earned income. Since the title II program is a form of insurance which is not means-tested in any way, resources are never considered. Putting your refund in the bank would have no affect on your benefits.

QUESTION: I will be getting an Earned Income Tax Credit payment this year – is that something I need to report to SSA?

The earned income tax credit (EITC) is a special tax credit that reduces the Federal tax liability of certain low income working taxpayers. This tax credit sometimes results in a payment to the taxpayer, either as an advance from an employer or as a refund from IRS. For more detailed information about the EITC go to the IRS website at: http://www.irs.gov/individuals/article/0,,id=96466,00.html

The Earned Income Tax Credit (EITC) is not counted as income for either the SSI program or the title II disability benefits and does not need to be reported to SSA. In addition, for the SSI program, any unspent Federal tax refund or payment made by an employer related to an EITC that is received on or after 3/2/04 is excluded from resources for the 9 calendar months following the month the refund or payment is received. For more information, refer to POMS SI 01130.675 Tax Advances and Refunds Related to Earned Income Tax Credits and Child Tax Credits.

NOTE: These same rules apply to the Child Tax Credit (CTC). The child tax credit (CTC) is a special refundable Federal tax credit that is available to certain low income taxpayers with earned income. They must be parents, step-parents, grandparents or foster parents with a dependent child. This child tax credit may provide a refund to individuals even if they do not owe any tax. The CTC may result in a tax refund payment to the taxpayer from IRS beginning with tax year 2001. There is no advance payment with the CTC.

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QUESTION: Is it possible for the IRS to take some of my disability benefit check if I owe money for delinquent taxes?

Yes, this is possible – but only with title II disability benefits. The SSI program does not permit garnishment, attachment or levies against payments for any reason since the assumption is that persons on SSI have very little income or resources. Effective 7/1/89, the Taxpayer's Bill of Rights (P.L. 100-647) specifically prohibits IRS levies against SSI payments.

In the title II program, the IRS may take a portion of your monthly benefit payment to recover delinquent taxes. IRC Section 6331 states that individuals and businesses with delinquent tax liabilities may be subject to a continuous 15% levy against funds owed them by the federal government (including SSA benefits) beginning in July 2000. To do this, the IRS has to file something called a “Notice of Levy” with the SSA. A Notice of Levy is continuous until the IRS tells SSA to stop levying. In processing levies, SSA is merely acting to assist IRS in its duty to collect delinquent taxes. Except for seeing that the processing requirements are met, SSA has neither the authority nor obligation to question the correctness of an IRS levy.

If a levy is received for an individual who is receiving benefits on behalf of someone else as a representative payee, it will be returned to the IRS. SSA can only levy an individual’s own benefits.

A taxpayer whose title II disability payments are subject to levy may contact the IRS to resolve the issue by paying the tax bill, entering into an installment agreement or proposing an offer in compromise. For more information about SSA’s role in processing IRS levies, refer to POMS GN 02410.100 - Internal Revenue Service (IRS) Levy.

QUESTION: Can I have taxes withheld from my Social Security Disability Benefits?

Yes, this is possible. Public Law No.103-465 amends the Internal Revenue Code (IRC) to allow individuals to request that monies be withheld from certain Federal payments to satisfy their Federal income tax liability. An amendment to Section 207 of the Act allows this withholding from title II benefits. SSA refers to this process as “Voluntary Tax Withholding” or VTW. All title II beneficiaries (adults as well as children) are eligible for VTW. However, only the beneficiary or his/her representative payee can request VTW. Voluntary Tax Withholding does NOT apply to SSI payments and there is no way to have State income taxes withheld from any SSA benefit.

Beneficiaries (or their representative payees) need to complete and sign IRS form W-4V (Voluntary Withholding Request) for a VTW request to be valid. This includes a request to stop and as well as start VTW. The withholding rates set by IRS are 7%, 10%, 15%, and 25%. Only these percentages can be used. No other percentages or flat dollar amounts are acceptable. Beneficiaries can start or stop VTW at any time. For more information on VTW processes, refer to POMS GN 02410.015 - Voluntary Tax Withholding (VTW).

QUESTION: Are there special tax deductions that people with disabilities can claim?

Yes, the IRS rules contain myriad deductions and exemptions related to disability and these would apply equally to SSI recipients and title II disability beneficiaries. There are far too many special rules for people with disabilities to describe in this document, but a helpful overview may be found in IRS Publication 907 – Tax Highlights for Persons with Disabilities. This pamphlet can be found online at: http://www.irs.gov/pub/irs-pdf/p907.pdf.

In addition to these IRS rules, many States offer additional income tax deductions and some city and county governments offer discounts on property taxes or special taxes such as fees charged for fishing or hunting licenses. Beneficiaries are encouraged to search online for State and local deductions related to disability, or to seek the assistance from a qualified tax professional.

QUESTION: I will be receiving the first-time homebuyer’s tax credit at the end of the year- Is that something I need to report to SSA?

Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit applies only to homes used as a taxpayer's principal residence, reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar, and Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed. For more information, see http://www.irs.gov/newsroom/article/0,,id=204671,00.html.

Yes, for the purposes of the SSI program, this tax credit is considered to be countable income. It would also count as a resource in the month after it was received.

In the title II program, SSA is only interested in earned income – money you receive in exchange for work performed. Tax credits would not be considered earned income. Since the title II program is a form of insurance which is not means-tested in any way, resources are never considered. Putting your tax credit in the bank would have no affect on your benefits.


Any questions may be directed to: rsi5@srt.com

Important Changes to the Medicare Part D Low-Income Subsidy

Individuals who enroll in the Medicare prescription drug program (Medicare Part D) may get assistance in paying the premiums for this coverage by applying for the Part D low-income subsidy. SSA also refers to this program as “Extra Help”.

Beginning January 1, 2010, changes in the law make it easier for some people to qualify for Extra Help with their Medicare prescription drug plan costs. Under the Medicare Improvements for Patients and Providers Act:

· SSA will no longer count as a resource any life insurance policy; and

SSA will no longer count as income the help beneficiaries receive regularly from someone else to pay their household expenses—food, mortgage, rent, heating fuel or gas, electricity, water, and property taxes.

In addition, beginning January 1, 2010, when beneficiaries apply for Extra Help, they also can start the application process for the Medicare Savings Programs. These are the state programs that provide help with Medicare Part B premiums and other Medicare costs – what we often refer to as QMB or SLMB. Social Security will now notify the State when beneficiaries apply for Extra Help and the State will contact beneficiaries to help them apply for a Medicare Savings Program.

For a complete explanation of the changes to Medicare Part D low-income subsidy, go to
http://www.socialsecurity.gov/pubs/10040.html

Any questions may be directed to: rsi5@srt.com

SSA - "Working While Disabled—How We Can Help"

The 2010 edition of the publication, “Working While Disabled—How We Can Help,” is now available on Social Security’s website.

See http://www.socialsecurity.gov/pubs/10095.html.

This publication provides an “at a glance” overview of work incentives and an easy-to-understand description of how earnings affect Social Security disability benefits and SSI payments.

Any questions may be directed to: rsi5@srt.com

Compassionate Allowance

The Social Security Administration recognizes that it has an obligation to provide benefits quickly to applicants whose medical conditions are so serious that their conditions obviously meet disability standards.

Compassionate allowances are a way of quickly identifying diseases and other medical conditions that invariably qualify under the Listing of Impairments based on minimal objective medical information. Compassionate allowances allow Social Security to quickly target the most obviously disabled individuals for allowances based on objective medical information that we can obtain quickly.

The initial list of Compassionate Allowance conditions was developed as a result of information received at public outreach hearings, public comment on an Advance Notice of Proposed Rulemaking, comments received from the Social Security and Disability Determination Service communities, and the counsel of medical and scientific experts. Social Security also considered which conditions are most likely to meet our current definition of disability.

Please see the following link for a list of the 50 conditions that were selected for rollout of the Compassionate Allowances initiative. Social Security has indicated that the list will expand over time. HERE

Any questions may be directed to: rsi5@srt.com

Martinez Settlement May Benefit You

The Social Security Administration has agreed to repay people whose benefits have been suspended or denied since January 1, 2007 based on the mere existence of an outstanding arrest warrant. Over 200,000 people whose benefits have been suspended or denied since January 1, 2000 are potentially eligible for retroactive benefits in varying amounts; approximately 80,000 are potentially eligible for full retroactive reinstatement of benefits totaling over $500 million.

Further Details/Info

Any questions may be directed to: rsi5@srt.com

Does Income from Participation in a Clinical Trial Count as Income?

September 16, 2009 "Last night, the Senate followed the House’s lead in introducing legislation to allow patients with rare diseases to participate in clinical studies without losing their eligibility for government healthcare benefits. “The CF Foundation applauds the Senate co-sponsors for introducing this vital bill to allow more people with rare diseases — including cystic fibrosis — to participate in clinical trials," said Robert J. Beall, Ph.D., president and CEO of the Cystic Fibrosis Foundation. “If successful, this legislation will help ensure swift advancement of life-lengthening and potentially lifesaving drugs from the research phase to the people who need them.” Currently, Supplemental Security Income (SSI) rules require that compensation provided for participation in a clinical trial be counted as income when determining benefits. Because Medicaid benefits are tied to SSI eligibility, patients who take part in clinical trials may be disqualified from receiving the government healthcare coverage. This penalty prevents many people with rare diseases from participating in clinical studies. Researchers developing drugs to treat rare diseases like cystic fibrosis struggle to recruit participants for clinical trials because of limited patient populations. More than 30 promising CF drugs are in development, and about 30,000 people in the United States have the disease. The bill is co-sponsored by Sens. James Inhofe (R-OK), Richard Durbin (D-IL), Richard Shelby (R-AL), Ron Wyden (D-OR), and Chris Dodd (D-CT). Source: Cystic Fibrosis Foundation, www.cff.org.

Any questions may be directed to: rsi5@srt.com

Is Rental Income Earned Income?

Received this info from our WIPA National Training Center at Virginia Commonwealth University.
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I have had this question posed numerous times and the answer is (as it always seems to be) – Well…..it depends.

In most cases the question relates to a beneficiary who owns a house that he/she rents out, or when a beneficiary lives in a house and rents out a room or owns a duplex that he/she lives in and rents out the other unit. That is the situation I will address in this correspondence.

The basic rule of thumb in cases like these is that net rental income counts as unearned income (meaning not subject to FICA per POMS Section RS 02505.240) unless it is earned income from self-employment (e.g., someone who is in the business of renting properties). This is actually stated very clearly for SSI recipients in the POMS at: https://secure.ssa.gov/apps10/poms.nsf/lnx/0500830505!opendocument

Of course, for SSI recipients, unearned income is treated less favorably than earned income since only the $20 General Income Exclusion is applied to unearned income. In addition, if the SSI recipient owns a home which he/she does not live in because it is rented out, then the property would be a countable resource.

If the SSI recipient is actually self-employed and in the business of renting property, then any Net Earnings from Self-Employment (NESE) the business generates would be decreased by any applicable work incentives when SSA is determining countable NESE. The countable NESE would affect the SSI cash payment in the usual manner. For a review of how the SSI program treats NESE, refer to the 2009 WIPA Training Manual - Module 3, Unit 6.

On the title II side, things are a little bit more complicated. There is no specific citation in the DI section of the POMS saying that rental income is not counted as earned unless the beneficiary is self-employed in the business of renting properties. This is implied when SSA defines what to count by describing earnings or self-employment income as income a person receives in exchange for his/her work activity – it is remuneration for work performed. In most cases, simply renting out one’s home or a portion of one’s home would not constitute work activity – it is too passive and is not subject to FICA. Unless a beneficiary is engaged in the business of renting property, the money received from renting a single house would typically NOT be considered to be earned income. If the rental income is not considered to be earned, then it would not be considered when SSA makes TWP or SGA determinations.

Of course, there are all sorts of situations in which things can get pretty murky. What if the person rents out multiple pieces of property – does that mean the person is in the rental business? SSA has to sort these situations out one-by-one. The first thing they do is look to see if the beneficiary is engaged in “trade or business”. To make this determination, the SSA asks the following questions:

· Is there a good faith intention of making a profit or producing income?
· Is there continuity of operations, repetition of transactions, or regularity of activities?
· Are the functions being performed a regular occupation or profession?
· Is the beneficiary holding himself out to others as being engaged in the selling of goods or services?

(From POMS Section RS 01802.002)

With these questions, the SSA is looking for an overall pattern. One ‘yes’ answer to these questions is insufficient to make a determination of self-employment, but they need not all be answered with “yes” for self-employment to be determined to exist. If SSA determines that the beneficiary is self-employed, any countable NESE from the business will be considered during TWP and SGA determinations.

REMEMBER – Determinations of what is or is NOT earned income can only be made by SSA. If there is any doubt, refer the beneficiary to the local Social Security Field Office for clarification. If the beneficiary does not agree with the determination rendered by SSA, he/she may request reconsideration as part of the standard appeals process.


Any questions may be directed to: rsi5@srt.com

No Change in COLA for 2010 - Increase to SGA

Monthly Social Security and Supplemental Security Income (SSI) benefits will not automatically increase in 2010 as there was no increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 to the third quarter of 2009. Other important 2010 Social Security information is as follows:

Maximum Taxable Earnings:	2009	2010
Social Security (OASDI only)	$106,800	$106,800*
Medicare (HI only)	No Limit

Quarter of Coverage:	2009	2010
Earnings needed to earn one Social Security credit	$1,090	$1,120

Retirement Earnings Test Exempt Amounts:	2009	2010
Under full retirement age NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.	$14,160/yr. ($1,180/mo.)	$14,160/yr.* ($1,180/mo.)
The year an individual reaches full retirement age NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.	$37,680/yr. ($3,140/mo.)	$37,680/yr. ($3,140/mo.)
There is no limit on earnings beginning the month an individual attains full retirement age.

Social Security Disability Thresholds:		2009	2010
Substantial Gainful Activity (SGA)	Non-Blind	$ 980/mo.	$1000/mo.
	Blind	$1,640/mo.	$1,640/mo.*
Trial Work Period (TWP)		$ 700/mo.	$ 720/mo.

SSI Federal Payment Standard:	2009	2010
Individual	$ 674/mo.	$ 674/mo.*
Couple	$1,011/mo.	$1,011/mo.*

SSI Student Exclusion:	2009	2010
Monthly Limit	$1,640	$1,640*
Annual Limit	$6,600	$6,600*

* Because there is no COLA, by statute these amounts remain unchanged in 2010.

Any questions may be directed to: rsi5@srt.com

How SSA Treats Employee Bonuses Provided by Wal-Mart

Wal-Mart Corporation pays bonuses to employees on a regular basis that are based upon the overall financial performance of the store. All employees of the store share in the bonuses and FICA is deducted from these payments. The bonus payments are made at regular intervals (quarterly, annually) and reflect performance of the store over a period of months. These bonuses are not based upon individual productivity or work performance, but upon the combined performance of all employees who work in a particular store. Since Wal-Mart hires a large number of persons with disabilities who are SSA disability beneficiaries, a great many CWICs across the country have encountered questions about how these bonuses should be treated by SSA.

As a national company, the bonus program implemented by Wal-Mart is the same regardless of where the stores are located. Our problem is that various FOs, Area Offices and Regional Offices are treating these bonuses in different ways. Our questions are as follows:

QUESTION: Is this income earned income or unearned income for the SSI program? Assuming it does count as some form of income, we assume the income is counted in the month it is received as SSI does with all other forms of income. We would like verification that this is correct.

ANSWER: Yes, this interpretation is correct. Bonuses paid to an employee by an employer are wages (earned income) per SI 00820.100 and RS 01401.150.

We count income (including bonuses) at the earliest of the following points:
when it is received,
when it is credited to an individual's account, or
when it is set aside for his or her use.

We determine income monthly and count it in the month that it is received (SI 00810.030).


QUESTION: For title II disability benefits, does this income count when SSA makes TWP and SGA determinations? If it does count, is it the case that the bonus money should be applied retroactively for the months over which the bonus is being paid?

ANSWER: For the question regarding Wal-Mart, our policy on bonuses for T2 is contained in DI 10505.010D.

“When evaluating bonus/incentive payments, generally consider that those payments represent the person's own productivity. The adjudicator is not required to verify whether the bonus is related to the person's own productivity unless the beneficiary can provide evidence indicating that it is not. Determine if the bonus/incentive payment represents a specific period of time, and if it does, distribute the earnings over the period of time it was earned. If the amount does not represent a specific period of work activity, or a specific time period is not determinable, distribute the payment(s) monthly over the time period the person had worked for the employer up to but not exceeding a year.”

Generally, we will consider bonuses as countable earnings as described above. However, if a beneficiary provides evidence that the payment is not related to his or her own productivity (such as a shareholder bonus) then that payment is excluded from countable earnings for TWP and SGA purposes. We will take action to clarify this policy in the above POMS.


Any questions may be directed to: rsi5@srt.com

No Cola Increase For 2 Years

Social Security Disability Insurance checks have been increasing each year since 1975. The amount of increase, or Cost Of Living Adjustment (COLA), is linked to inflation.

Inflation is actually down this year due in large part to the lower cost of energy compared to 2008.

By law, Social Security benefits (both retirement and disability) can't go down.

Any questions may be directed to: rsi5@srt.com