Work and Social Security Disability Benefits: Addressing Challenges and Creating Opportunities

Statement of

William R. Morton

Analyst in Income Security

Before

Finance Committee

U.S. Senate

Hearing on

“Work and Social Security Disability Benefits:

Addressing Challenges and Creating

Opportunities”

June 18, 2024

Congressional Research Service

https://crsreports.congress.gov

TE10103

Congressional Research Service

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Chairman Wyden, Ranking Member Crapo, and other distinguished Members of the Committee, my name

is Will Morton, and I am an Analyst in Income Security at the Congressional Research Service (CRS).

Thank you for the opportunity to testify on Work and Social Security Disability Benefits: Addressing

Challenges and Creating Opportunities. My testimony will provide an overview of the Social Security

Administration’s (SSA’s) disability programs, a brief history of efforts to promote work among disability

beneficiaries, and a discussion of selected issues concerning work and SSA’s disability programs.

Overview of SSA’s Disability Programs

Background

SSA oversees two federal programs that provide income support to qualified individuals who meet the

statutory definition of disability: Social Security Disability Insurance (SSDI) and Supplemental

Security Income (SSI).1

SSDI is part of the Old-Age, Survivors, and Disability Insurance program, commonly known as Social

Security. Social Security is a federal social insurance program that provides monthly cash benefits to

insured workers and their eligible family members in the event of the worker’s retirement, disability, or

death. Workers obtain insurance protection by working for a sufficient period in jobs covered by Social

Security and its payroll tax, and benefits are based on a worker’s past earnings in covered jobs. The

program is financed primarily by payroll taxes levied on the earnings of covered workers, which are

credited to two separate trust funds. The SSDI component provides benefits to disabled workers who are

below Social Security’s full retirement age (65-67, depending on year of birth) and to their eligible family

members. Social Security also provides benefits to disabled widow(er)s and disabled adult children of

retired, disabled, or deceased insured workers. Social Security disability beneficiaries automatically

qualify for health care coverage under Medicare, generally after satisfying a 24-month waiting period.

In contrast, SSI is a federal means-tested program that provides monthly cash benefits to eligible adults

and children who meet the program’s definition of disability and to eligible adults age 65 or older,

regardless of their disability status. The program is intended to provide a guaranteed minimum level of

income to people who have difficulty meeting their basic living expenses due to disability or age and who

have little or no Social Security or other income. There are no work or contribution requirements to

qualify for SSI. However, because the program is based on need, it is restricted to people whose countable

income and resources (assets) are within statutorily prescribed limits. SSI provides a uniform maximum

benefit of $943 per month for individuals in 2024, which is reduced by any countable income (e.g., Social

Security benefits, earnings from work).2 SSI is financed by annual appropriations from the general fund.

Some states use their own funds to supplement the federal SSI benefit. In most states, SSI recipients

automatically qualify for health care coverage under Medicaid.

In April 2024, SSA paid $12.5 billion in total monthly benefits to 8.6 million Social Security disability

beneficiaries and paid $3.3 billion in total monthly benefits to 4.0 million SSI recipients ages 18-64.3

About one-quarter of SSI recipients ages 18-64 also received Social Security benefits that month.

1 For more information, see CRS In Focus IF10506, Social Security Disability Insurance (SSDI), CRS In Focus IF10482,

Supplemental Security Income (SSI), and CRS Report R44948, Social Security Disability Insurance (SSDI) and Supplemental

Security Income (SSI): Eligibility, Benefits, and Financing.

2 SSA, “SSI Federal Payment Amounts,” https://www.ssa.gov/oact/cola/SSIamts.html.

3 SSA, “Monthly Statistical Snapshot, April 2024,” Tables 2 and 3, https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/;

SSA, “Benefits Paid By Type Of Beneficiary,” https://www.ssa.gov/oact/ProgData/icp.html; and SSA, “SSI Monthly Statistics,

April 2024,” Table 1, https://www.ssa.gov/policy/docs/statcomps/ssi_monthly/index.html. Social Security disability beneficiaries

include disabled workers, disabled widow(er)s, and disabled adult children.

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Definition of Disability

SSDI and SSI use the same work-based definition of disability for adults. The Social Security Act defines

disability as the inability to engage in any substantial gainful activity due to any medically determinable

physical or mental impairment that (1) is expected to result in death or (2) has lasted, or is expected to

last, for at least 12 consecutive months.4 The impairment (or combination of impairments) must be severe

enough to prevent the individual from performing both their previous work (if any) and any other kind of

substantial gainful work that exists in significant numbers in the national economy, taking into

consideration their age, education, and work experience. This definition of disability is generally

considered total and long term. Unlike state workers’ compensation or veterans’ disability compensation,

SSDI and SSI do not pay benefits for partial or short-term disabilities.

SSA defines substantial gainful activity (SGA) as work that involves doing significant and productive

physical or mental duties and which is done (or intended) for pay or profit.5 Work activity is ordinarily

considered significant if it results in earnings that exceed the agency’s SGA earnings level.6 In 2024, the

SGA earnings level is $1,550 per month for most individuals.7 Individuals with monthly earnings that

exceed the SGA earnings level are generally considered able to engage in SGA and thus do not meet the

definition of disability (certain exceptions apply). The SGA earnings level is a proxy measure for the

inability to perform substantial work; it is not designed to be a financial eligibility or means test.

SSA performs periodic medical reviews to verify that SSDI and SSI disability beneficiaries continue to

meet the definition of disability in the Social Security Act. Medical continuing disability reviews (CDRs)

are scheduled based on the likelihood of medical improvement. Individuals considered likely to improve

medically are scheduled for a review once every six to 18 months, while those considered not likely to

improve medically are scheduled for a review once every five to seven years. Those who cannot be

assigned to one of the other categories are scheduled for a medical review once every three years.

Program Rules Concerning Work Activity and Work Incentives

Although SSDI and SSI are designed to support eligible adults who cannot perform substantial work due

to their qualifying impairments, the two programs allow disability beneficiaries to work and earn within

certain limits. In addition, both SSDI and SSI include special program rules designed to encourage work

among disability beneficiaries, known as work incentives.

Under the SSDI program, work activity is governed largely by the SGA earnings level. In general, Social

Security disability beneficiaries who work must keep their earnings at or below the SGA earnings level.

Those who earn above the SGA earnings level after a certain period have their cash benefits suspended or

terminated. Because having earnings above the SGA level may result in a complete loss of SSDI cash

benefits, the SGA earnings level is often referred to as the “cash cliff.”

SSDI provides certain work incentives designed to promote work among Social Security disability

beneficiaries. For example, most beneficiaries are provided a trial work period (TWP), which allows

them to earn any amount for up to nine months within a certain period without having their benefits

suspended or terminated. Beneficiaries “use up” one of their nine TWP months when their earnings

exceed the TWP earnings level, which is $1,110 per month in 2024.8

4 Social Security Act, §§223(d)(1)(A) and 1614(a)(3)(A); 42 U.S.C. §§423(d)(1)(A) and 1382c(a)(3)(A).

5 20 C.F.R. §§404.1510 and 416.910.

6 Special rules apply to individuals who are self-employed.

7 SSA, “Substantial Gainful Activity,” https://www.ssa.gov/oact/cola/sga.html. This level is adjusted annually for average wage

growth. A higher monthly SGA earnings level applies to SSDI beneficiaries who are statutorily blind.

8 SSA, “Trial Work Period,” https://www.ssa.gov/oact/COLA/twp.html. This level is adjusted annually for average wage growth.

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Beneficiaries who exhaust the TWP enter an extended period of eligibility (EPE), which allows them to

continue to receive benefits if their earnings are at or below the SGA earnings level (generally $1,550 per

month in 2024). During the first 36 months of the EPE, benefits are suspended for months in which

earnings exceed the SGA level. After the 36-month reentitlement period, beneficiaries who earn above the

SGA level are terminated from the SSDI program. Benefits are paid for the first month in which a

beneficiary earns above the SGA level in the EPE and the next two months, called the three-month grace

period. Those whose SSDI benefits are terminated due to work and who continue to have qualifying

impairments receive extended Medicare coverage for at least 93 months after the end of the TWP.

Under the SSI program, work activity is governed largely by the program’s financial eligibility rules. In

SSI, countable income—gross income minus applicable exclusions—is subtracted from the maximum

monthly SSI benefit on a dollar-for-dollar basis in determining a person’s program eligibility and benefit

amount (if any). Individuals are ineligible for SSI if their countable income exceeds the maximum SSI

benefit. All SSI recipients are afforded certain basic income exclusions in calculating their countable

income. Specifically, SSI excludes the first $20 per month of any income and the first $65 per month of

earned income plus one-half of any earned income above $65.9 After applying the $20 and $65 per month

income exclusions, the maximum SSI benefit is reduced by $1 for every $2 of earnings (i.e., a $1-for-$2

benefit offset). Under these basic income exclusions, the level of gross income that reduces the maximum

SSI benefit to $0 for individuals with only earned income is $1,971 per month in 2024, referred to as the

earned income break-even point.

SSI provides additional work incentives designed to encourage greater work activity among recipients

with earnings. For instance, a provision known as 1619(a) allows disability recipients to earn above the

SGA level and continue to receive SSI benefits, provided their earnings and other countable income are at

or below the maximum monthly SSI benefit. Another provision, known as 1619(b), allows individuals

whose SSI benefits are reduced to $0 due to excess earnings to retain Medicaid coverage if their annual

gross earnings are at or below a state-specific threshold and they meet certain other criteria.10 In 2024, this

threshold ranges from $34,490 in Tennessee to $86,438 in Alaska.11

Some work incentives are available to disability beneficiaries under both programs. For example, Ticket

to Work (TTW) allows most SSDI and SSI disability beneficiaries ages 18-64 to obtain free employment

services, vocational rehabilitation services, and other support services from approved public or private

providers to achieve certain work-related goals. In addition, expedited reinstatement (EXR) allows former

SSDI and SSI disability beneficiaries whose entitlement ended due to work to request expedited

reinstatement of those benefits if they stop performing SGA within five years of their prior termination

and meet certain other criteria. Further, SSDI and SSI disability beneficiaries are permitted to deduct from

their earnings the reasonable cost of certain impairment-related work expenses (IRWE) for purposes of

SGA and SSI financial eligibility determinations.

Table 1 summarizes selected work incentives available under the SSDI and SSI programs. One key

difference between the two programs is that the SSDI-only work incentives are generally time limited,

whereas SSI-only work incentives are not time limited. Another key difference is that SSI recipients have

their benefits gradually offset as their earnings rise above a certain level, while SSDI beneficiaries who

work either receive their regular benefits or nothing, depending on the applicable work incentive and

whether their earnings are above the SGA level. A more extensive discussion of SSDI and SSI work

incentives can be found in SSA’s guide on work incentives and employment supports, The Red Book.12

9 The $20 per month general income exclusion and the $65 per month earned income exclusion are not adjusted for inflation.

10 For more information, see CRS Report R46111, Medicaid Eligibility: Older Adults and Individuals with Disabilities.

11 SSA, “Continued Medicaid Eligibility (Section 1619(B)),” https://www.ssa.gov/disabilityresearch/wi/1619b.htm.

12 SSA, The Red Book, https://www.ssa.gov/redbook/.

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Table 1. Selected SSDI and SSI Work Incentives, by Program Availability

Work Incentive

Description

SSDI Only

Trial Work Period

(TWP)

Allows beneficiaries to test their ability to work for up to 9 months (not necessarily consecutive) within a rolling 60-month

period without having their benefits suspended or terminated. During the TWP, beneficiaries may earn any amount and

continue to receive their regular benefits, even if their earnings exceed the SGA level. Any month in which earnings exceed

the TWP earnings level during this period counts as a month toward the cumulative 9-month TWP. In 2024, the TWP

earnings level is $1,110 per month.

Extended Period of

Eligibility (EPE)

Allows beneficiaries who exhaust the TWP to continue to receive benefits for months in which their earnings are at or

below the SGA level (generally $1,550 per month in 2024). During the first 36-months of the EPE (known as the

“reentitlement period”), benefits are suspended for months in which earnings exceed the SGA level. In or after the 37 th

month of the EPE, benefits are terminated if earnings exceed the SGA level.

3-Month Grace

Period

Allows beneficiaries in the EPE to receive benefits for the first month in which their earnings exceed the SGA level and the

following 2 months, regardless of their earnings level during the latter 2 months (if any).

Extended Medicare

Coverage

Allows individuals whose SSDI benefits are terminated due to earnings above the SGA level but who continue to have

qualifying impairments to retain premium-free Medicare Part A coverage for at least 93 months after the end of the TWP.

Those who exhaust extended Medicare coverage and continue to have qualifying impairments may “buy into” Medicare Part

A by paying a premium.

SSI Only

Basic Income

Exclusions

SSA excludes the first $20 per month of any income (earned or unearned) and the first $65 per month of earned income

plus one-half of earned income above $65. After applying the $20 and $65 per month income exclusions, the maximum

monthly SSI benefit is reduced by $1 for every $2 of earnings (i.e., a $1-for-$2 benefit offset). Under these basic income

exclusions, the level of gross income that reduces the maximum SSI benefit to $0 for individuals with only earned income is

$1,971 per month in 2024 (known as the “earned income break-even point”).

1619(a) (Special SSI

Benefits)

Allows disability recipients to earn above the SGA level if their countable income is below the maximum SSI benefit. It is

designed for those with earnings above the SGA level ($1,550 per month in 2024) but below the earned income break-even

point ($1,971 per month for individuals in 2024). Those in 1619(a) status receive special SSI benefits that are calculated in

the same manner as regular SSI benefits.

1619(b) (Medicaid

While Working)

Allows individuals whose SSI benefits are reduced to $0 due to excess earnings to retain Medicaid coverage if their annual

gross earnings are at or below a state-specific threshold and they meet other criteria. Because the threshold is based, in

part, on any applicable state supplementary payments and the state’s average per capita Medicaid expenditures on disability

enrollees, the dollar amount varies by state. In 2024, the threshold ranges from $34,490 in Tennessee to $86,438 in Alaska.

Plan to Achieve SelfSupport (PASS)

SSA excludes the income or resources that SSI recipients set aside to pursue specific work goals. The work goal must be

feasible for the recipient, and the plan must be approved by SSA.

Both SSDI and SSI

Ticket to Work

(TTW)

Allows beneficiaries ages 18-64 to obtain free employment services, vocational rehabilitation (VR) services, and other

support services from approved providers to achieve specific work-related goals. TTW participants are issued a “ticket,”

which they can assign to either an employment network (a qualified private or non-federal public entity) or a state VR

agency. Both parties must agree on and develop a plan that outlines the specific services that will be provided and the

particular work-related goals that the participant aims to achieve. SSA pays providers when participants achieve certain

earnings outcomes. Participants who make timely progress toward their work-related goals are exempt from periodic

medical reviews (CDRs).

Expedited

Reinstatement (EXR)

Allows former beneficiaries whose entitlement ended due to work to request expedited reinstatement of those benefits if

they stop performing SGA within 5 years of their prior termination and meet certain other criteria. Requesters may receive

up to 6 months of provisional cash and medical benefits while SSA conducts a medical review to decide if they qualify for

reinstatement.

Impairment-Related

Work Expenses

(IRWE)

Allows beneficiaries to deduct from their earnings the reasonable cost of certain work expenses related to their

impairments for purposes of SGA and SSI financial eligibility determinations (e.g., co-pays, medications, attendant care

services, car modifications, service animals, and assistive technologies).

Source: CRS.

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SSA conducts periodic work and financial eligibility reviews to verify that disability beneficiaries

continue to meet relevant program requirements. For SSDI, SSA performs work CDRs to determine if

SSDI beneficiaries are working above the SGA level after the TWP. Work CDRs may be triggered based

on alerts from SSA’s CDR enforcement operations system, which uses annual earnings data from the

Internal Revenue Service (IRS) and quarterly wage data from the Office of Child Support Enforcement’s

(OCSE’s) National Directory of New Hires. For SSI, SSA performs redeterminations to determine if SSI

recipients continue to meet the program’s financial eligibility requirements (e.g., resources, earnings from

work, other income). SSI redeterminations are scheduled once every year or once every six years,

depending on the likelihood of a change in financial circumstances. SSA uses data from the IRS and

OCSE, among other sources, to conduct redeterminations.

Demonstration Projects

Starting in 1980, Congress began granting SSA the authority to test certain changes to SSDI and SSI

program rules through demonstration projects. Demonstration projects are temporary changes (i.e.,

interventions) to disability program rules that are tested on some subset of disability beneficiaries and

later evaluated.13 Congress has previously provided SSA with two separate demonstration authorities.

First, Section 234 of the Social Security Act gave SSA temporary demonstration authority to test changes

to SSDI program rules “designed to promote attachment to the labor force,” subject to certain

requirements.14 Section 234 authority last expired on December 31, 2022, and has not been renewed by

Congress. Second, Section 1110(b) of the Social Security Act gives SSA demonstration authority to test

changes to SSI program rules and early interventions, subject to certain requirements.15 Section 1110(b)

authority does not expire under current law (i.e., it is permanent).

Using its Section 234 and 1110(b) demonstration authorities, SSA has tested a variety of interventions

with different target populations and purposes. Some demonstrations have tested whether providing

employment supports or other services to disability beneficiaries affects employment outcomes (e.g.,

employment rates and earnings) and disability benefit use (e.g., the amount of disability benefits

received). Some demonstrations have targeted interventions to specific populations, such as SSI youth

entering adulthood (i.e., SSI transition-age youth). Other SSA demonstrations have tested whether

providing services to individuals before they begin receiving disability benefits affects employment

retention and disability benefit use, or whether providing SSDI beneficiaries with earlier access to

medical benefits and other services affects health outcomes and disability benefit use.

Work Activity Among SSA Disability Beneficiaries

SSA recently estimated that about 1.1 million Social Security disability beneficiaries and between

200,000 and 300,000 SSI recipients work in a given year (i.e., have positive earnings from work).16 These

figures represent about 13% of all Social Security disability beneficiaries and about 5%-7% of all

working-age SSI recipients in April 2024. In addition, about 0.6% of SSDI disabled-worker beneficiaries

had their benefits suspended due to work in December 2022 (i.e., due to earnings above the SGA level)

13 Austin Nichols, Jeffrey Hemmeter, and Debra Goetz Engler, ed., Lessons from SSA Demonstrations for Disability Policy and

Future Research (Rockville, MD: Abt Press, 2021), p. 1, https://www.ssa.gov/disabilityresearch/demonstrations/lessons.htm.

14 42 U.S.C. §434.

15 42 U.S.C. §1310(b).

16 These estimates are from a SSA proposed rule discussed later on in this statement. See footnote 41.

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and about 0.9% had their benefits terminated due to work in 2022.17 A 2011 study estimated that about

0.5% of working-age SSI recipients have their benefits terminated due to work each year.18

A 2020 SSA study examined a cohort of working-age individuals awarded SSA disability benefits in 2001

and tracked their outcomes through 2015.19 The study found that 5.4% of those awarded SSDI in 2001

and about 10.1% of those awarded SSI in 2001 had their benefits suspended due to work at some point

from 2001 through 2015. It also found that 3.5% of those awarded SSDI in 2001 and about 0.5% of those

awarded SSI in 2001 had their benefits terminated due to work at some point from 2001 through 2015.

Brief History of Efforts to Promote Work Among SSA

Disability Beneficiaries

Lawmakers have emphasized vocational rehabilitation (VR) and work as goals of SSA’s disability programs

since their creation. When lawmakers established SSDI in 1956, they (1) provided SSA with the authority to

refer disability applicants to state VR agencies for appropriate VR services, (2) required SSA to suspend the

benefits of disability beneficiaries who refused to accept VR services without good cause, and (3) allowed

those participating in a state VR program to work above SGA for up to 12 months without having their

benefits suspended or terminated.20 The House report accompanying the 1956 legislation stated,

We believe that everything possible should be done to support and strengthen vocational

rehabilitation. Rehabilitation, where it is possible, is the most economical method of providing for

disabled persons and is the most satisfactory for the individual…. In order to avoid setting up

barriers to vocational rehabilitation the bill specifically provides that a person who performs work

while under a State rehabilitation program will not, solely by reason of this work, lose his benefits

during the first 12 months while he is testing out a new earning capacity. 21

In 1960, lawmakers replaced the earlier work incentive with the nine-month TWP and the three-month

grace period.22 They also made these new work incentives available to all SSDI beneficiaries who pursue

work, regardless of whether they participate in a state VR program. Further, lawmakers specified that the

level of work activity needed to trigger a TWP month should be lower than the level of work activity

that represents SGA.23

In 1965, Congress authorized SSA to make payments from the Social Security trust funds to reimburse

state VR agencies for the costs of providing services to certain disability beneficiaries, with total VR

service payments limited to a specified share of the prior year’s total disability benefits.24

17 SSA, Annual Statistical Report on the Social Security Disability Insurance Program, 2022, October 2023, Table 56,

https://www.ssa.gov/policy/docs/statcomps/di_asr/.

18 Paul O’Leary, Gina A. Livermore, and David C. Stapleton, “Employment of Individuals in the Social Security Disability

Programs,” Social Security Bulletin, vol. 71, no. 3 (August 2011), https://www.ssa.gov/policy/docs/ssb/v71n3/v71n3p1.html.

19 SSA, DI & SSI Program Participants: Characteristics & Employment, 2015, “Work Activity Before and After Award: LongTerm Employment Activity,” March 2020, https://www.ssa.gov/policy/docs/chartbooks/di-ssi-employment/2015/index.html.

20 Social Security Amendments of 1956 (P.L. 84-880).

21 U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1955, report to accompany H.R. 7225,

84th Cong., 1st sess., June 14, 1955, H.Rept. 84-1189, p. 5.

22 Social Security Amendments of 1960 (P.L. 86-778).

23 U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1960, report to accompany H.R. 12580,

86th Cong., 2nd sess., June 13, 1960, H.Rept. 86-1799, p. 13. In 2024, the TWP earnings level is $1,110 per month, while the SGA

earnings level for most individuals is $1,550 per month.

24 Social Security Amendments of 1965 (P.L. 89-97). Initially, VR service payments were limited to 1% of the prior year’s total

SSDI disability benefits. This amount was increased to 1.5% in the 1970s. The limitation on VR service payments did not apply

to SSI, which is financed by annual appropriations.

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In 1972, lawmakers replaced the former federal-state cash assistance programs for older adults and people

with disabilities with the new federal SSI program, effective in 1974.25 In creating SSI, lawmakers

provided SSI applicants and recipients with certain basic income exclusions, which were similar to those

permitted under the former adult assistance programs. They also extended a number of SSDI provisions to

the new SSI program, such as the definition of disability for adults, the TWP, and the three-month grace

period. In addition, lawmakers extended the same basic VR referral, suspension, and payment provisions

to SSI applicants and recipients.

In 1980, Congress established a number of provisions designed to promote work among SSDI and SSI

disability beneficiaries.26 For example, Congress established a reentitlement period (EPE), provided

extended Medicare coverage, permitted beneficiaries to deduct certain IRWE from their earnings, and

established temporary provisions to permit SSI recipients to have higher levels of earnings and retain their

cash and medical benefits (i.e., the 1619[a] and 1619[b] provisions).27 Congress also required SSA to

conduct periodic medical reviews (CDRs) of certain disability beneficiaries, as well as authorized SSA to

conduct both SSDI and SSI demonstration projects to test the effectiveness of various changes to program

rules designed to encourage work among disability beneficiaries. The following year, Congress replaced the

earlier VR payment provisions with a new VR cost reimbursement program, which linked reimbursement

for VR services to the disability beneficiary earning above the SGA level within a certain period.28

In 1986, lawmakers amended the SSI program to make the 1619(a) and 1619(b) provisions permanent and

to eliminate those work incentives that were initially borrowed from the SSDI program (i.e., the TWP,

EPE, and three-month grace period).29 In explaining the rationale for permitting SSI recipients to have

higher levels of earnings under the 1619 provisions while enrolled in a program designed for those with

long-term, work-limiting impairments, a Senate report accompanying a related bill noted,

The Committee recognizes that section 1619, in providing benefits or Medicaid eligibility to some

people who could no longer qualify as regular SSI applicants (because they have proven their ability

to engage in substantial employment), will create some anomalous situations. The Committee

believes however that the acceptance of some anomalies is a reasonable price to pay for a program

which, without an expansion of the basic SSI program, removes substantial disincentives to work

attempts by the most highly motivated disability recipients.30

During the 1990s, a number of proposals were introduced to reform the provision of employment

supports and services to SSDI and SSI disability beneficiaries, as well as to extend health care coverage to

disability beneficiaries who return to work.31 Interest in these proposals culminated with the enactment of

the Ticket to Work and Work Incentives Improvement Act of 1999 (P.L. 106-170). Among other things,

the legislation established the TTW program, which allowed working-age disability beneficiaries to elect

to receive employment supports and services from approved private, nonprofit, and other service

providers, in addition to state VR agencies. In creating TTW, lawmakers eliminated SSA’s authority to

refer disability applicants to state VR agencies and to suspend benefits if disability beneficiaries refused

25 Social Security Amendments of 1972 (P.L. 92-603).

26 Social Security Disability Amendments of 1980 (P.L. 96-265).

27 For more information, see “Social Security Disability Amendments of 1980: Legislative History and Summary of Provisions,”

Social Security Bulletin, vol. 44, no. 4 (April 1981), https://www.ssa.gov/policy/docs/ssb/v44n4/v44n4p14.pdf.

28 Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35). See also SSA, “Social Security’s Vocational Rehabilitation

Reimbursement Program,” https://www.ssa.gov/work/vocational_rehab.html.

29 Employment Opportunities for Disabled Americans Act (P.L. 99-643).

30 U.S. Congress, Senate Committee on Finance, Amendments to Section 1619 of the Social Security Act, report to accompany S.

2209, 99th Cong., 2nd sess., September 22, 1986, S.Rept. 99-466, pp. 3-4, https://www.finance.senate.gov/imo/media/doc/srpt99466.pdf.

31 See, for example, the following bills: H.R. 4230 and S. 1979 (104th Congress); H.R. 534 and H.R. 3433 (105th Congress); and

H.R. 1091, H.R. 3070, S. 86, and S. 331 (106th Congress).

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to accept VR services without good cause. The legislation also established EXR, lengthened the

reentitlement period (EPE) and the period of extended Medicare coverage, and created new state options

under Medicaid to permit certain workers with disabilities to “buy into” Medicaid.32

In addition, the 1999 legislation mandated that SSA conduct an SSDI demonstration project to test the

effects of reducing SSDI benefits by $1 for each $2 of the beneficiary’s earnings above a certain level,

similar to how the earned income exclusion works under SSI (i.e., a $1-for-$2 benefit offset). In the

2010s, SSA conducted the Benefit Offset National Demonstration (BOND) to test the effects of a benefit

offset and enhanced benefits counseling on employment, earnings, disability benefit use, and certain other

outcomes.33 Under the BOND, after exhausting the TWP and grace period work incentives, the level of

earnings over which SSDI benefits started to be reduced was the SGA level.

As part of the Bipartisan Budget Act of 2015 (P.L. 114-74), lawmakers mandated that SSA conduct

another SSDI demonstration project to test the effects of reducing SSDI benefits by $1 for each $2 of the

beneficiary’s earnings above a certain level, called the Promoting Opportunity Demonstration (POD).

Under the POD, the level of earnings over which SSDI benefits started to be reduced was generally the

TWP level, which is lower than the SGA level tested in the BOND.34 In addition, the POD eliminated the

TWP and the three-month grace period.

Selected Issues

Potential Barriers to Work

In 2018, SSA published a study that included estimates from a 2015 survey of working-age SSDI and SSI

disability beneficiaries.35 Of those beneficiaries who were not working, the most frequently cited reason for

not working was that their physical or mental condition prevents them from working (90%).36 Other reasons

cited for not working included being discouraged by previous work attempts (26%), inaccessible workplaces

(26%), and the inability to find jobs for which they are qualified (23%). (Multiple responses were possible.)

The reasons cited by disability beneficiaries for not working are often referred to as barriers to work.37

Overpayments may be another barrier to work for SSA disability beneficiaries. A work-related

overpayment may occur if (1) disability beneficiaries fail to report their work or earnings to SSA in a

timely manner or at all, (2) SSA fails to act on work or earnings reports in an appropriate or timely

manner, or (3) both. In 2023, the Government Accountability Office (GAO) noted that overpayments may

cause financial hardship for those who are liable for the overpayments and that work-related

overpayments may discourage further work attempts among disability beneficiaries.38 For example, a

2024 study found that 3.1% of those awarded SSDI benefits in 2008 were overpaid at some point within

32 SSA, “President Clinton Signs The Ticket To Work And Work Incentives Improvement Act Of 1999,” December 17, 1999,

https://www.ssa.gov/legislation/legis_bulletin_121799.html. For more information on Medicaid buy-in pathways, see CRS

Report R46111, Medicaid Eligibility: Older Adults and Individuals with Disabilities.

33 SSA, “Benefit Offset National Demonstration,” https://www.ssa.gov/disabilityresearch/offsetnational.htm.

34 SSA, “Promoting Opportunity Demonstration,” https://www.ssa.gov/disabilityresearch/pod.htm.

35 SSA, National Beneficiary Survey: Disability Statistics, 2015, March 2018, https://www.ssa.gov/policy/docs/statcomps/nbs/

2015/index.html.

36 Ibid., Table 15.

37 For a discussion of barriers to work and work incentive use among SSA disability beneficiaries, see U.S. Government

Accountability Office (GAO), Social Security Disability: Ticket to Work Helped Some Participants, but Overpayments Increased

Program Costs, October 28, 2021, pp. 17-23, https://www.gao.gov/products/gao-22-104031.

38 GAO, Disability Insurance: SSA Faces Ongoing Challenges with Overpayments, October 18, 2023, pp. 8-9,

https://www.gao.gov/products/gao-24-107113.

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the 10-year period after their award.39 Among those who were overpaid, the average total overpayment

was $13,556. In addition, a 2021 study found that among SSA disability beneficiaries who were recently

employed and overpaid, about 24% of SSDI beneficiaries and about 13% of SSI recipients changed their

employment in response to the overpayment.40

Recently, SSA has undertaken a number of initiatives designed to address issues related to overpayments.

For example, in February 2024, SSA issued a proposed rule to implement a payroll information exchange

with Equifax via The Work Number, which covers about two-thirds of non-farm payroll.41 Under the

proposed rule, SSDI and SSI disability beneficiaries may authorize SSA to obtain wage and employment

information directly from participating employers each month, which would reduce some of the reporting

responsibilities on the part of beneficiaries. SSA expects that receiving monthly data directly from

employers through the exchange will allow it to identify overpayments more quickly, which will reduce

the quantity and size of overpayments. In addition, SSA recently revised its guidance on recovering and

waiving overpayments to reduce some of the potential burdens faced by overpaid beneficiaries.42

The complexity of the work incentives available under the SSDI and SSI programs may be another barrier

to work. A 2019 technical expert panel convened by SSA concluded that the complexity of SSA’s work

incentives poses challenges “both for beneficiaries’ work efforts and for SSA’s ability to administer the

program.”43 In addition, in 2021, GAO noted that several of the experts it interviewed stated that SSA’s

work incentives “are so numerous and complex that even within SSA only a small number of specialists

understand them.”44

To address issues related to work incentive complexity, Congress established the Work Incentives

Planning and Assistance (WIPA) program in 1999. Under WIPA, SSA funds community-based

organizations that provide SSDI and SSI disability beneficiaries with free, in-depth benefits counseling on

how work and earnings may affect their cash and medical benefits.45 Each organization or WIPA project is

staffed by trained Community Work Incentive Coordinators. SSA funds 74 WIPA projects across the

country, which serve about 30,000 disability beneficiaries each year.46 Administrations have also put forth

proposals to simplify SSA’s work incentives. For instance, the President’s budget for FY2021 proposed to

“replace existing return-to-work programs and earnings rules with a simple system of offsetting DI

benefits based on a 4-tier earnings structure that is simpler and more efficient to administer.”47 This

proposal was not enacted into law.

39 Denise Hoffman et al., “Work Overpayments Among New Social Security Disability Insurance Beneficiaries,” Social Security

Bulletin, vol. 84, no. 1 (February 2024), Table 1, https://www.ssa.gov/policy/docs/ssb/v84n1/v84n1p49.html.

40 Marisa Shenk and Gina Livermore, Work-Related Overpayment and Benefit Suspension Experiences of Federal Disability

Beneficiaries, Center for Retirement Research at Boston College, November 1, 2021, Table 5, https://crr.bc.edu/work-relatedoverpayment-and-benefit-suspension-experiences-of-federal-disability-beneficiaries/.

41 SSA, “Use of Electronic Payroll Data To Improve Program Administration,” 89 Federal Register 11773, February 15, 2024,

https://www.federalregister.gov/documents/2024/02/15/2024-02961/use-of-electronic-payroll-data-to-improve-programadministration.

42 For more information, see CRS In Focus IF12632, Social Security Overpayments: Debt Recovery.

43 Daniel Gubits et al., Post-Entitlement Earnings Simplification Demonstration Technical Experts Panel Meeting: Final Report,

Abt Associates, July 22, 2019, p. 9, https://www.ssa.gov/disabilityresearch/teps.htm?ab=2.

44 GAO, Social Security Disability: Ticket to Work Helped Some Participants, but Overpayments Increased Program Costs, p.

22.

45 SSA, “Work Incentives Planning and Assistance,” https://www.ssa.gov/work/WIPA.html.

46 Robert Pfaff, “Overview of Social Security Administration’s (SSA) Return to Work Programs,” in Exploring the Ticket to

Work Program to Elevate Employment for Job Seekers with Disabilities, February 14, 2023, slide 11.

47 SSA, Justification of Estimates for Appropriations Committees, Fiscal Year 2021, February 10, 2020, p. 23,

https://www.ssa.gov/budget/.

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Ongoing Update to Jobs Data Used in Certain Disability Determinations

SSA uses a five-step sequential evaluation process to determine whether individuals meet the definition of

disability under the Social Security Act. Sometimes, medical evidence is sufficient for SSA to determine

whether individuals’ impairments are severe enough to meet the disability criteria. If SSA cannot

determine that individuals meet the definition of disability based solely on medical evidence, then the

agency must determine whether such individuals, despite their impairments, can do the work they have

done in the past or adjust to other work available in the national economy.

As part of the Occupational Information System (OIS) project, SSA has been updating the jobs data that it

relies on for disability determinations involving vocational assessments. After determining that

someone—despite their impairment—cannot perform their past work, SSA must also assess whether the

individual can adjust to any other work available in significant numbers in the national economy given

their age, education, and work experience. SSA currently relies on jobs data in the Dictionary of

Occupational Titles (DOT)—developed by the Department of Labor in 1938 and last updated in 1991—

when making such determinations.48 Since FY2012, SSA has been partnering with the Bureau of Labor

Statistics to develop an updated source of data—the Occupational Requirements Survey (ORS)—on jobs

and their requirements for use in its disability determinations. ORS will be the main source of the OIS’s

updated jobs information, in addition to certain data from other sources. Between FY2012 and FY2023,

SSA obligated a total of $272.8 million to the OIS project.49 To date, SSA has not implemented the OIS.

According to SSA’s OIS Project Frequently Asked Questions webpage, the agency will start using OIS

data in its disability determinations after it has “finalized [its] policy changes” and has “made conforming

changes to [its] computer systems.”50

Conclusion

Lawmakers established the SSDI and SSI disability programs to support eligible adults who cannot

perform substantial work due to their severe, long-term impairments. At the same time, lawmakers and

program officials have established work incentives and return-to-work initiatives to promote vocational

rehabilitation and encourage work among SSDI and SSI disability beneficiaries. Striking the appropriate

balance between these competing objectives is something both lawmakers and program officials have

wrestled with over the years. For example, a 1986 report from the Senate Committee on Finance noted,

While the Congress has found it necessary and important to limit eligibility under these programs to

those who are so medically disabled that they cannot work, the Committee recognizes that some

individuals determined to meet the Social Security Act definition of disability are nevertheless so

motivated towards work and independence that they later manage to work in spite of their impairments.

Such individuals present a difficult dilemma for public policy. Allowing them to continue receiving

income maintenance benefits would seem to undermine the fundamental Congressional decision

that eligibility be limited to those who cannot work…. On the other hand, terminating benefits in

such circumstances can be a powerful disincentive to the work efforts which these severely disabled

individuals are otherwise motivated to attempt.51

48 SSA also uses the expertise of trained vocational specialists (at the initial level) and vocational experts (at the appeals level) in

cases requiring vocational evaluations of individuals’ ability to do past and other work given their impairments.

49 SSA, Justification of Estimates for Appropriations Committees, Fiscal Year 2025, March 11, 2024, Table 2.24, p. 79,

https://www.ssa.gov/budget/.

50 SSA, “Occupational Information System Project FAQ’s,” https://www.ssa.gov/disabilityresearch/ois_project_faqs.html.

51 U.S. Congress, Senate Committee on Finance, Amendments to Section 1619 of the Social Security Act, report to accompany S.

2209, 99th Cong., 2nd sess., September 22, 1986, S.Rept. 99-466, p. 2.

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From the early 1980s through the late 1990s, lawmakers responded to the relatively low levels of work

activity among disability beneficiaries by establishing new work incentives (or modifying existing ones)

targeted at work-oriented individuals in specific situations (e.g., when their benefits are suspended or

reduced to zero). This approach increased the variety of work incentives and other supports available to

SSDI and SSI disability beneficiaries while also adding complexity to both programs.

Over the last 25 years, SSA has conducted a number of demonstration projects to inform lawmakers about

the effectiveness of different program rule changes designed to promote work and improve outcomes for

SSDI and SSI disability beneficiaries. SSA commissioned a summary report of “lessons learned” from its

past demonstration projects, which was issued in 2021. Acknowledging that individual demonstrations

varied widely in terms of their impacts, the report makes the “general conclusion” that while, on average,

the program rule changes that were tested meaningfully increased employment, they did not substantially

increase net earnings or reduce disability benefits.52 The report also states that there are “non-monetary

benefits to work that have personal and social value.”53 In a 2023 study of the TTW program, two SSA

researchers noted that “significant changes in beneficiary work activity would seem to require structural

changes to the disability program rules that would change beneficiary incentives for work.”54

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff

to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of

Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of

information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.

CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United

States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,

as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the

permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

52 Austin Nichols, Jeffrey Hemmeter, and Debra Goetz Engler, ed., Lessons from SSA Demonstrations for Disability Policy and

Future Research, p. 22.

53 Ibid.

54 Paul O’Leary and Emily Roessel, “Effects of the Ticket to Work Program: Return on Investment and Overall Assessment of

Outcomes Versus Design,” Social Security Bulletin, vol. 83, no. 1 (February 2023), p. 29, https://www.ssa.gov/policy/docs/ssb/

v83n1/v83n1p1.html.

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