The Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs provide cash assistance to approximately 12 million people of working age (ages 18 through full retirement age). all have demonstrated an inability to work at substantial levels (as determined by amount of earnings, hours worked, and nature of work) due to a medically determinable long-term impairment; most also receive public health insurance by virtue of their beneficiary status. both programs have features designed to support the work attempts of beneficiaries with disabilities. Historically, such provisions have focused on allowing beneficiaries to keep more of their cash benefits and maintain eligibility for public health insurance as their incomes have increased.
in 1999, congress passed the ticket to work law and improved work incentives (ticket law). The central provision of the ticket act was the ticket to work (ttw) program, which greatly expanded the types of organizations that the social security administration (ssa) would pay to support the employment efforts of beneficiaries and thus thus, offer beneficiaries greater access to employment services. When it was signed into law, the ticket law was viewed as landmark legislation that could greatly improve employment outcomes for SSI and DI recipients. Combined with the Americans with Disabilities Act of 1990, the ticket law was believed to have finally addressed the most significant barriers preventing disability beneficiaries from achieving their employment goals (pear 1998).
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ttw was designed on the premise that many people receiving disability cash benefits under the ssi and di programs wanted to work, but were hampered by limited access to employment services and a lack of incentives for them to work. service providers encourage long-term profits. to a level that would suspend or terminate disability benefits. ttw attempted to address these issues by providing beneficiaries with performance-based vouchers (tickets) for employment services. these coupons could be used to obtain services from a wide range of providers within a market-driven system. A key feature of the original ttw payment system was that it rewarded vendors who accepted beneficiaries’ tickets with up to 60 monthly payments, but only for those months in which a beneficiary was not receiving ssi or di cash benefits due to Your profits. In this way, the program attempted to align the incentives of employment service providers with those of SSA and beneficiaries seeking to get off the disability rolls through work. early part of the process and increasing parity between the total payments possible for ssi and di participants, the underlying principles of the program remained intact.3
The Disability Policy Panel, convened by the National Academy of Social Security, devised Ttw’s performance-based reimbursement and expanded beneficiary choice features in 1993 (Mashaw and Reno 1996). the new program was developed in the context of the data available at the time. Unfortunately, statistics on employment and program exits due to earnings of disability beneficiaries in the early 1990s were not complete. As noted by Berkowitz (2003), the data gave little indication of the effectiveness of the existing system in providing employment support to beneficiaries:
Despite limited information on who would use the program and how, ttw was designed with a market-based approach. Instead of spelling out a complex program structure that specifies what services are provided to whom, ttw relies on the market to determine such decisions. it is up to service providers and their beneficiary clients to negotiate needed services and supports, and implement them when both parties believe there is a reasonable chance of success. As such, ttw places minimal restrictions on who may participate and what “services” are permitted in the program. Congress also gave the SSA considerable discretion to modify the program as it developed. The Ticket Act required the SSA to conduct a thorough evaluation of the program and submit periodic reports to Congress to ensure more complete data was captured on the work activities and successes of Ttw participants.
The SSA implemented Ttw beginning in 2002. To meet the congressional mandate, the SSA hired an independent evaluator to develop a comprehensive data system and track the progress of the program. the ongoing evaluation has explored the activities and outcomes of the ttw program through administrative data analysis, interviews with ssa staff and contractors operating ttw, and more than 25,000 interviews with social security disability beneficiaries conducted in the first three rounds of the national beneficiary survey (national office of standards). To date, five evaluation reports have been produced.4 The Ttw evaluation has documented significant interest in employment among nearly half of disability beneficiaries. Although there have been many positive developments, the SSA assessor has found neither a measurable increase in clients’ income nor a decrease in the receipt of disability benefits that can be attributed to Ttw. Therefore, despite continued interest in work among beneficiaries and new work assistance opportunities under Ttw, there has been no significant change in the proportion of beneficiaries who discontinue disability benefits due to work.
Since ttw has not met its goals, it is likely that it will propose to change the current program or replace ttw with an alternative program or support system. as policymakers consider what to do next with work supports for disability beneficiaries, the data resources and analysis conducted for the ttw assessment will provide them with more comprehensive information on work-related activities for disability beneficiaries than the one that was available when ttw was first conceived.
articles in this issue are drawn primarily from the 2010 ttw assessment report and provide more extensive information than previously available on the work aspirations of ssi and di beneficiaries, the challenges they face in reaching their employment goals and the varying degrees of success they have achieved. Articles follow three basic research themes. The first assesses the main premise of Ttw: that beneficiaries are trying to work and potentially earn enough to get off the disability rolls, but need help gaining skills, finding jobs, and maintaining supports as they enter the labor market. The second uses data from the NBS to better understand the challenges and experiences beneficiaries face as they try to reduce their reliance on Social Security cash benefits through work. the third examines the variation in beneficiary employment statistics observed across states and over time, to assess the premise that factors beyond a beneficiary’s personal and disability characteristics influence employment outcomes.
To put these articles in perspective, the following section briefly describes both the work incentive programs offered to Social Security disability beneficiaries and the statistics on beneficiaries’ work activities currently available from published sources.5 It also highlights how the articles in this issue contribute to the existing body of research and statistics.
disability program work incentives and ssa employment statistics
The SSI and DI programs have different work incentives. ssi payments are not affected for the first $65 in earned income per month (or $85 if there is no unearned income), after which ssi payments are reduced by $1 for every $2 earned. Special provisions, named for section numbers of the Social Security Act, allow working beneficiaries to retain SSI eligibility under certain circumstances. section 1619(a) allows beneficiaries who earn more than the substantial gainful activity (sga)6 level to continue receiving ssi payments until the $1 for $2 calculation brings their cash payment to zero. at that point, ssi recipients enter section 1619(b) status, which allows them to continue receiving medicaid coverage as long as they remain disabled and meet all other eligibility criteria.
In the di program, work does not immediately affect cash benefits. a trial work period of 9 months (not necessarily consecutive) allows beneficiaries to earn any amount and still receive full benefits. if earnings exceed the trial work level in a given month,7 it is recorded as a trial work month. when 9 months are registered, beneficiaries enter the extended period of eligibility. After a 3-month grace period, cash benefits are suspended for any month during the extended period in which earnings exceed the SGA level. once the grace period and the first 36 months of the extended period are complete, benefits end in the first month of sga.8
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ssa doesn’t actually track ssi terminations due to work; Technically, the agency does not terminate cash benefits for SSI recipients specifically because of their work activity. If a beneficiary’s income, alone or in combination with other income, makes the person ineligible for SSI cash payments, then those payments are stopped and the beneficiary enters section 1619(b) status. Medicaid eligibility can continue indefinitely as long as the SSI recipient continues to meet SSA’s medical eligibility requirements. These individuals continue to appear on SSA’s lists in suspended SSI payment status for as long as Medicaid eligibility continues. SSI recipients who remain in suspended status for 12 continuous months are considered technically terminated once they pass their status’s 1619(b) threshold, but no change in status is reflected in the SSA data. In all cases except death, SSA will record the termination status of these individuals only if they attempt to restart cash benefits. At that time, SSA determines that your previous eligibility for SSI has ended and a new application is required. If a previous beneficiary’s earnings drop enough to restart benefits before 12 consecutive months have elapsed, he or she re-enters current pay status.
Although SSA’s data systems do not record SSI payments canceled specifically because of income, there are ways to approximate the number of such cancellations using published reporting data. For example, Table 1 shows the number of SSI recipients in 1619(b) status. the share increased from 0.74 percent in 1987 to 2.23 percent in 2000, before falling again to 1.80 percent in 2003 and then rising again in subsequent years. these figures overstate the number of recipients who enter 1619(b) status each year because recipients can remain in this status for extended periods of time. To estimate a lower bound, we can use the annual increase in 1619(b) participation (averaging about 0.06 percent during 1998-2006). The actual number entering 1619(b) status is likely to be higher because people leave 1619(b) status for various reasons, including death, going back to cash payments, not using Medicaid services, and in rarely, for earning amounts that exceed the state’s 1619(b) threshold. Alternatively, the proportion of beneficiaries whose SSI payments were suspended due to income has been about 10 percent annually since 1994, and the percentage canceled due to income has varied between approximately 6 percent and 7 percent since 1998. However, for most ssi beneficiaries suspended or terminated for income, the action is the result of excess unearned income or income from someone responsible for providing partial support (a “deemor”, usually a spouse or parent) instead of your own income. SSA estimates that only about 8 percent of terminations involve the beneficiary’s earned income. If this figure of 8 per cent has remained stable over time, it suggests that own-earning terminations would be around 0.5 per cent during the years observed in table 1, with no perceptible change since the implementation of ttw.
There are similar problems with di’s historical data. The SSA began reporting terminations due to occupational or medical recovery shortly after the program’s enactment in 1955. 9 Because occupational recoveries became mixed with medical recoveries, the ongoing disability review process ( cdr) affected completion statistics and percentages. It tended to fluctuate in response to year-to-year changes in SSA policy and funding for conducting CDRs (Table 2). In the early 1980s, for example, with more funding and a greater emphasis on CDRs, recoveries tended to increase. In contrast, in the late 1980s, when the emphasis on CDRs diminished, recoveries tended to decline (Newcomb, Payne, and Waid 2003). The SSA began publishing statistics specifically about DI suspensions and terminations resulting from SGA earnings beginning in 2001. As Table 2 shows, since the implementation of Ttw in 2002, little has changed in terms of benefit suspensions or terminations due to to earnings, and both have hovered around 0.5 percent.
Although cross-sectional statistics, such as those shown in Tables 1 and 2, are useful for tracking trends over time, the transition to work is dynamic. Researchers have long recognized the value of longitudinal statistics in examining work-related activities. Over the years, they have developed useful dynamic analyzes of transition-to-work activities, including SSA’s groundbreaking longitudinal study of DI beneficiaries in the 1980s and early 1990s (Müller 1992). Other studies have taken a more limited view of beneficiary employment over long periods (Newcomb, Payne, and Waid 2003). Although these studies make significant contributions, they predate Ttw, tend to be limited in scope, or based on relatively small samples of SSI or DI recipients. In addition, these earlier studies are generally based on the self-reported income of SSI and DI recipients, and thus may suffer from varying degrees of reporting bias. In general, published information on the work activities of SSI and DI recipients is better than it was in the early 1990s, when Ttw was first conceived, but not by as much, and many limitations remain for analysis and comparison. policy evaluation.
articles in this issue address data gaps by providing the most recent and comprehensive data on the static and dynamic employment activities of ssi and di beneficiaries. To accomplish this, these studies draw on data from the NBS, Social Security administrative records, and combined data from the Internal Revenue Service and the Department of Education’s Rehabilitation Services Administration. By developing these broad-based statistics, the hope is to shed additional light on why benefit termination numbers remain so small when so many beneficiaries report wanting to work.
The main contribution of the studies presented in this issue is the breadth of the reported statistics. the articles do not use particularly sophisticated techniques, and in many cases focus on presenting simple descriptive statistics. they consider ssi and di equally, span many years, and use consistent definitions tailored to measure transition-to-work activity. the occupational disability exit indicator used in several of the studies is a good example. This indicator is consistently defined for all three categories of beneficiaries receiving SSA disability benefits: SSI-only disability beneficiaries, DI-only beneficiaries, and beneficiaries receiving both SSI and DI at the same time. specifically identifies benefit status with respect to month-to-month earnings for all months from 1996 onwards and mimics the status needed to activate service provider payments under the ttw program, where a beneficiary must have cash benefits discontinued specifically due to work in a given month.10 This status is reported for the periods before and after ttw for all recipients, regardless of their ttw participation status. For each month, this constructed variable indicates whether benefits are currently being paid, suspended specifically due to earnings, terminated specifically due to earnings, or not currently paid for reasons other than earnings, such as retirement, death, or medical recovery. Most employment statistics come from administrative sources, including Internal Revenue Service earnings data, which are not subject to the limited scope of survey data and much less subject to the errors and biases of self-reporting. In addition, in most cases, the statistics are based on the total population of SSI and DI recipients, rather than statistical samples. Although somewhat pedantic, the articles focus on providing a comprehensive and robust set of benchmark statistics covering a full range of employment-related activities undertaken by beneficiaries, both at specific times and over long periods. We hope that future research will build on the metrics created for these analyses, and expand on the baseline information presented here.
These articles find that, over time, a large part of work activity takes place behind the simple annual statistics on payments withheld or benefits canceled due to work. This is not to say that the ttw program has been more successful than previously reported. Rather, the findings suggest that such simple annual statistics are only part of the story, and that to understand the effectiveness of programs like ttw, it is important to examine a broader range of transition-to-work activities and outcomes.
The following sections briefly present the articles in this issue, organized according to three themes emerging from their findings: the employment success of social security recipients varies widely across states; many beneficiaries work, but very few maintain long-term employment; and many factors contribute to beneficiaries’ inability to achieve long-term employment. we then conclude with a discussion of some of the important implications of the findings.
variation in employment outcomes across states and over time
Economic theory and evidence from previous studies suggest that a wide range of policies and other environmental factors can significantly affect employment and participation in programs for people with disabilities. In “Employment Among SSA Disability Program Beneficiaries: 1996-2007,” Mamun, Wittenburg, O’Leary, and Gregory present cross-sectional employment statistics by state and over time. The findings show employment rates that ranged from 7 percent in West Virginia to 23 percent in North Dakota. this large variation at the state level remains after controlling for observable differences in beneficiary characteristics, including demographics and disabilities. this implies that sources of variation in employment not accounted for in the analysis drive these differences. These other sources of employment variation may include local labor market conditions and state-specific programs and policies (such as Medicaid programs, vocational rehabilitation programs, accessible public transportation, and other state or local job supports) and unobserved individual characteristics that differ by state (such as general health status within the state or cultural differences affecting the employment of people with disabilities). the authors also find that state employment rates generally persist over time. the latter finding suggests that little change occurred in the policy environment at the state level during the 12 years studied, or that the changes that did occur had little effect on the employment of disability beneficiaries, possibly because they were overwhelmed by other factors . Additional research will be needed to determine the extent to which policy changes may affect employment rates beyond social and labor market factors.
longitudinal statistics on the occurrence and duration of employment of disability beneficiaries
Several of the articles in this issue present longitudinal statistics that describe the behavior of beneficiaries over long periods. They show that the percentage of disability beneficiaries who eventually work long enough to suspend or terminate their benefits is much higher than published SSA statistics based on a single month or year might suggest. statistics differ because they measure different things. For example, in “Longitudinal Statistics on Work Activity and Use of Work Supports for New Social Security Disability Insurance Beneficiaries,” Liu and Stapleton measure the percentage of DI participants whose benefits end due to work with a longitudinal statistic. (3.7 percent) accounting for all who entered di in 1996 and eventually terminated as of 2006, while the published ssa statistic (0.53 percent) counts only the proportion of existing beneficiaries whose benefits terminated during 2006 (table two). Researchers have long recognized the difference between the two types of statistics and their interpretations (eg Muller 1992). the published termination statistic is much lower than the longitudinal statistic because the base of the published statistic includes all those who have not left the rosters for work or any other reason in the past (often for many years), while the numerator includes only those whose benefits ended up working in the current year. rather, the base of the longitudinal statistic includes only those who received their first award in a specific year, and the numerator includes those in that group whose benefits ended in any year since the award. Although Liu and Stapleton consider only awardees here, a similar analysis is underway for SSI.
Longitudinal statistics on the length of employment of individual beneficiaries and any resulting suspension or termination of benefits are critical to assessing the effectiveness of ttw, but have so far been scant. Statistics presented in several of the articles in this issue show that a large proportion of those who find work do not earn or maintain enough income to suspend or terminate their benefits. among the minority whose benefits are suspended or terminated for work, many remain in that status for at least several years, but many others quickly return to paid status.
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In “Social Security Disability Beneficiaries With Work-Related Goals and Expectations,” Livermore describes the prevalence and characteristics of beneficiaries likely to seek work, and presents their employment outcomes and benefit receipts over a period of time. 4 years (2004-2007). ). she finds that about 40 percent of beneficiaries had work-related goals and expectations. of these, half were actively pursuing their goals when they were interviewed, and over the next 4 years, 45 percent worked and 10 percent had their benefits suspended or terminated due to work in at least 1 month. those with employment goals differed from others in that they were more likely to be di-only recipients, younger, healthier, and more educated; they had also been on the disability rolls for a shorter period and had lower social security and non-social security benefit amounts. With other characteristics held constant, DI-Solo beneficiaries were more likely to have work-related goals and expectations than SSI Solo or concurrent beneficiaries. other findings of this study are consistent with the hypothesis that some dibeneficiaries restrict their income to avoid “falling off the benefit cliff”—losing all of their benefits because their income exceeds the maximum allowed by the program. di-only status and having high benefit amounts were significant negative predictors of leaving disability benefit rolls due to work, after controlling for other characteristics.
In “Disability Benefits Suspended and Terminated Due to Work,” Schimmel and Stapleton examine the extent to which DI and SSI benefits are suspended or terminated due to work over a 5-year period (2002-2006). they find that, in each year, less than 1 percent of beneficiaries had their benefits suspended or terminated because of first-time work. the percentage was much higher, however, once those whose benefits were also suspended or terminated for work in previous years were counted. The authors also found that Ttw participants are more likely than other disability beneficiaries to have their benefits suspended or terminated due to work, and for longer periods of time. however, because a small proportion of disability beneficiaries participate in ttw, the vast majority of beneficiaries whose benefits are suspended or terminated due to work are not ttw participants. Another important finding is that ttw participants generated performance payments for their service providers in less than half of the months they were off disability rolls for work. In the vast majority of these cases, the proximate cause was the provider’s failure to file a claim for payment.
In “Longitudinal Statistics on Work Activity and Use of Work Supports for New Social Security Disability Insurance Beneficiaries,” Liu and Stapleton examine the employment and benefit outcomes of the 1996 cohort of new disability insurance beneficiaries. from 1996 through 2006. They find that 28 percent returned to work during the 10-year period after the award year, and nearly 7 percent had their benefits suspended or terminated for at least 1 month because of work, including 3.7 percent cent whose profits finally ended up working. many whose benefits were terminated by work eventually returned to the disability rolls; about a quarter had done so within the period. Several other interesting findings emerge for the 1996 award cohort. Most of those whose benefits were suspended or terminated for work did not obtain services from a state vocational rehabilitation (VR) agency or a Ttw (en) employment network. for a large majority of these individuals, the first suspension of benefits occurred within 5 years of award; job layoffs occurred later due to lack of work incentives. a quarter of beneficiaries who were under 40 at the time of award returned to work and their benefits were suspended or terminated for working much more often than those who were older.
factors that affect the ability to maintain high profits
The long-term perspective on employment provided by several of the articles indicates that many beneficiaries with work-related goals and expectations succeed in obtaining employment, but many fail to sustain that success for long. Understanding the factors that hinder long-term employment success and return former beneficiaries to disability rolls is critical to developing effective employment policies and supports for disability beneficiaries.
In “Longitudinal Results of an Early Cohort of Ticket to Work Participants,” Livermore and Roche follow a group of early ttw participants over several years to assess changes in service use, health status, employment and income. Although the ttw participants are not representative of all beneficiaries who attempt to work and come off the disability rolls, the findings suggest some factors that could thwart the long-term success of beneficiaries’ employment attempts. in particular, poor health appears to negatively affect both use of services and employment. this is somewhat surprising because ttw participants are a very select group of beneficiaries. despite relatively better health and very high employment rates, their health status is characterized by high instability from one year to the next. Around 60 percent of ttw participants who worked over a 3-year period left at least one job, with poor health being the most frequently cited reason. other reasons, such as finding a temporary job, being fired or fired, and dissatisfaction with the specifics of the job were also frequently mentioned. The authors also found substantial year-to-year earnings instability among Ttw participants, perhaps caused by unstable employment and the adjustment of social and non-social security benefits in response to changes in earnings. people with income, even unstable income, were much less likely to be in poverty than those without.
The findings of the articles featured in this issue offer a variety of perspectives on the work activities of ssi and di beneficiaries, indicating that a fairly large proportion are interested in seeking employment and that their employment goals and expectations are not they are unrealistic. however, the findings also point to the challenges beneficiaries face when finding work, often resulting in them not leaving disability records due to work or only a brief departure. Findings regarding Ttw participants suggest that many beneficiaries attempting to work have unstable health, job opportunities, and income situations. Perhaps those who get off the rosters to work without assistance from a VR or IN agency are in more stable circumstances than those who get such assistance. Those seeking services to support their work endeavors are often in unstable circumstances, some of which may be caused by employment. for example, changes in income may affect eligibility for benefits, which could lead to instability in income and changes in living arrangements; In addition, the physical and mental rigors of employment could exacerbate existing health conditions. clearly, such factors can negatively affect continued motivation or the ability to work.
SSA has introduced two provider payment systems under which providers are paid in full only if the beneficiary goes off the work disability rolls and stays off the rolls for an extended period of time. the fact that ens did not file claims for performance payments in many of the months during which its clients were not working suggests that the providers did not maintain long-term connections with many of their clients, despite the incentive to do so.
Regulatory changes implemented in July 2008 addressed the incentives for providers to maintain a long-term relationship with their beneficiary clients in two important ways. First, they substantially increased the monthly payment amount for providers serving beneficiaries, but shortened its duration from 60 months to 36. Second, the new partnership feature plus created incentives for state VR agencies to provide initial services back to work under the pre-ttw payment system and then partner with an en to provide longer-term support. These regulatory changes may lead to longer-term support for beneficiaries as they work and leave disability rolls, support that could help address the many challenges that eventually cause periods of employment to end.
The findings point to two other important challenges of developing new policies and programs to increase the number of successful work attempts and the proportion of beneficiaries who work and leave and remain off the disability rolls. The first is that such policies and programs can lead to substantially higher spending. Future expansion of the number of Ttw users will likely mean providing VR or EN services for some beneficiaries who would have left the disability rolls even without receiving such services. compensatory reductions in benefit costs for such users will materialize only if they spend more time off the lists than they otherwise would. Similarly, if beneficiaries are offered a benefit offset of $1 for $2 for earnings above the SGA amount, a feature of the national demonstration of benefit offset (bonus), many of the beneficiaries who are their benefits would be suspended or terminated to work under the current one, they will continue to receive partial benefits.
Second, whatever policies or programs SSA implements, success will depend on numerous environmental factors beyond the agency’s control: employer interest in hiring beneficiaries, beneficiary access to health care, local transportation, circumstances personal and family benefits and work incentives associated with non-social security programs. SSA has a vested interest in environmental changes that would improve employment outcomes, but cannot affect such changes on its own. this interest has been bolstered by the rapid growth in the number of beneficiaries since the 2008 recession and the projected depletion of the di trust fund in 2018 (board of directors 2010).
The different employment settings and success levels of social security recipients observed across states suggest that employment policies are important. Therefore, it seems prudent for SSA to continue to implement and evaluate initiatives to help disability beneficiaries obtain long-term employment. however, if environmental factors, such as the local labor market and social or cultural norms, play a dominant role in changing state employment, then future policy changes that attempt to influence employment outcomes will need to address these factors as well. environment to achieve the desired results. To examine different types of barriers to employment for beneficiaries, SSA is conducting a series of demonstrations, including Bonds, the Youth Transition Demonstration, the Accelerated Benefits Demonstration, and the Mental Health Treatment Study. As SSA implements and evaluates these programs, care must be taken to consider more than just the demographic and disability characteristics of the participants. SSA must also consider local political, social and labor market factors. As the results of these demonstrations and the ttw evaluation emerge, policymakers will have better information with which to design policy changes to help people with disabilities increase their own well-being through work, maintain long-term employment and become more self-sufficient.
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