Academic journal article Social Security Bulletin

Changes to the Ticket to Work Regulations in 2008 Attracted Providers and Participants, but Impacts on Work and Benefits Are Unclear

Academic journal article Social Security Bulletin

Changes to the Ticket to Work Regulations in 2008 Attracted Providers and Participants, but Impacts on Work and Benefits Are Unclear

Article excerpt

Introduction

The Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs, administered by the Social Security Administration (SSA), provide income support to individuals who have long-lasting medical impairments and are unable to work at a substantial level. In August 2015, around 13 million working-age adults received benefits from one or both of these programs (SSA 2015). This article presents new statistics on the extent to which beneficiaries have given up their benefits to return to work since the introduction of the Ticket to Work (TTW) program in 2002, particularly in the period before and after July 2008, when SSA significantly changed the program's regulations to spur participation among both beneficiaries and employment service providers.

Many DI and SSI beneficiaries are interested in working, even if they are not able to do so at a significant or sustained level. Eligibility for federal disability benefits is partially based on the inability to engage in substantial gainful activity (SGA), which in 2015 is defined as equivalent to monthly earnings of $1,090 for nonblind beneficiaries and $1,820 for blind beneficiaries. Despite this criterion, several program provisions are designed to allow participants to test their ability to return to work. Under DI, beneficiaries are granted a 9-month trial work period (TWP) within a rolling 60-month window during which they can earn an unlimited amount and yet retain benefits. Following the completion of the TWP, benefits are suspended for work in any of the following 36 months in which beneficiaries engage in SGA (except for a 3-month grace period). After this 36-month period (and any remaining grace-period months), benefits are terminated in the first month of SGA.1 SSI rules are quite different; after a small earnings disregard, benefits are reduced by $1 for every $2 in earnings, meaning that many beneficiaries may earn approximately twice as much as the federal benefit rate and retain some level of benefits.2 Both programs include provisions that allow beneficiaries to maintain associated health insurance coverage (from Medicare in the case of DI and from Medicaid in the case of SSI) even after cash benefits have been terminated because of SGA.

Because of the strict and sometimes lengthy determination process required to prove inability to engage in SGA, beneficiaries often fear losing their disability benefits if they become employed and earn above certain thresholds. Moreover, once individuals with disabilities have left the labor force and met either program's eligibility criteria, they may suffer skills deterioration and loss of human capital that may complicate labor force reentry. A large body of literature has explored the magnitude of the labor-supply disincentive effects of the DI program; two of the most recent examples are Maestas, Mullen, and Strand (2013) and French and Song (2014).

Recognizing that many beneficiaries feared losing benefits and lacked knowledge of program rules and work supports, Congress enacted the Ticket to Work and Work Incentives Improvement Act of 1999 (Ticket Act). That legislation put into place a number of new policies and programs designed to support the returnto-work efforts of disability program beneficiaries. The Ticket Act focused on increasing the extent to which beneficiaries forgo cash disability benefits, in whole or in part, because of work. The centerpiece of the Ticket Act is the TTW program; its implementation began in February 2002. TTW expanded the ways in which SSA pays service providers for supporting beneficiaries in their employment efforts. Under TTW, providers receive compensation when beneficiaries achieve certain specified earnings levels or, in the case of "outcome payments" (described later), benefit cessation because of work.

This article presents new statistics on TTW participation and participant work activity. First, we present annual statistics from 2002 through 2010 on TTW participation to show that enrollment growth was initially slow, but accelerated after revised program regulations went into effect in July 2008. …

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