Let's Simplify Work Incentives

     The Consortium for Citizens with Disabilities (CCD) has issued a proposal for simplifying and improving the work incentives in Social Security's disability programs. Here are the major points:

• Benefit offset level: $1 benefit offset for every $2 of earnings over the earning disregard threshold
• Earning disregard threshold: Initial earning disregard should be set no lower than the current law Trial Work Level (TWL) period earning threshold of $770 for 2014 ... The earning disregard threshold for SSDI should be indexed ...
• The earned income disregard in the Supplemental Security Income (SSI) program should also be increased to the level it would be at if it had been indexed since its inception. The earned income disregard in the SSI program should be indexed after it is increased.
• Eliminate the Trial Work Period. A Trial Work Period would no longer be needed with a benefit offset.
• Eliminate the Extended Period of Eligibility (EPE) ... [E]arnings should never cause an SSDI beneficiary’s eligibility to be terminated. Instead, benefit eligibility should be put in suspension in any month that a beneficiary’s earnings rise to the level that no benefit is payable. An SSDI beneficiary’s eligibility should only be terminated if the individual has medically improved and no longer has a disabling impairment according to the Title II definition of disability.
• We recommend improving the administration of the IRWE [Impairment Related Work Expenses] by making the reporting of IRWEs easier – allowing online submission of evidence of expenses that might be eligible to be counted as an IRWE and reducing the frequency at which someone must provide evidence of the IRWE – e.g. create a presumption that the expense continues at the same monetary amount unless SSA is notified. If needed, verification of the expense could be asked for annually.
• The current SSI blindness rule should be applied to both Title II and SSI disability claimants and beneficiaries to allow the consideration of all work expenses, not only those that are “impairment - related.”

     These are common sense reforms. They would make the work incentives much easier for claimants to understand and for Social Security to administer. Congress has added one work incentive after another over the decades. It's gotten to the point that almost no one understands the incentives and that includes front line Social Security employees. How can incentives work if the people you're trying to incentivize don't understand the incentives and there's no one available to explain them? It's time to take down this Christmas tree loaded with ineffective incentives and replace it with something simple and workable.

     I don't think this proposal if adopted will put large numbers of people back to work. The vast majority of Social Security disability recipients are too sick to have any realistic hope of returning to work. I do think that this proposal will make a difference on the margins and be much easier to administer. That's all anyone should hope for.