[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
WORK INCENTIVES FOR BLIND AND DISABLED SOCIAL SECURITY BENEFICIARIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MARCH 23, 2000
__________
Serial 106-56
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
66-686 CC WASHINGTON : 2000
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Social Security
E. CLAY SHAW, Jr., Florida, Chairman
SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia SANDER M. LEVIN, Michigan
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois BENJAMIN L. CARDIN, Maryland
KENNY HULSHOF, Missouri
JIM McCRERY, Louisiana
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisories announcing the hearing................................ 2
WITNESSES
Social Security Administration, Susan Daniels, Ph.D., Deputy
Commissioner, Disability and Income Security Programs.......... 8
U.S. General Accounting Office, Barbara D. Bovbjerg, Associate
Director, Education, Workforce and Income Security Issues,
Health, Education and Human Services Division; accompanied by
Carol Petersen, Assistant Director, Education, Workforce and
Income Security Issues; Health, Education and Human Services
Division....................................................... 24
______
Arc of the United States:
William R. VanOoteghem, Essexville, MI....................... 77
Wendy VanOoteghem, Essexville, MI............................ 78
Consortium for Citizens with Disabilities, and NISH, Tony Young.. 87
Ehrlich, Hon. Robert L., Jr., a Representative in Congress from
the State of Maryland.......................................... 6
Gillis, Brenda-Ann, Stuart, FL................................... 38
Hanes, Pamela, Oregon Health Policy Institute, Oregon Health
Sciences University............................................ 80
Life In Time Consultation Services, Inc., David E. Gallagher..... 72
Louisiana Center for the Blind, Joanne Wilson.................... 42
National Federation of the Blind, James Gashel................... 51
Cavenaugh, Brenda, Rehabilitation Research and Training Center on
Blindness and Low Vision, Mississippi State University......... 45
SUBMISSIONS FOR THE RECORD
American Council of the Blind:
Charles H. Crawford, letter.................................. 116
Jenine Stanley, letter....................................... 117
American Network of Community Options and Resources, Annandale,
VA. statement.................................................. 118
Davis, Richard L., Bay City, MI, letter.......................... 119
English, Hon. Philip, a Representative in Congress from the State
of Pennsylvania, letter........................................ 120
National Alliance for the Mentally Ill, Arlington, VA, Michael
Freedman, statement............................................ 120
Nussle, Hon. Jim, a Representative in Congress from the State of
Iowa, statement................................................ 123
Paralyzed Veterans of America, statement......................... 124
Protection & Advocacy, Inc., Los Angeles, CA..................... 126
WORK INCENTIVES FOR BLIND AND DISABLED SOCIAL SECURITY BENEFICIARIES
----------
THURSDAY, MARCH 23, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:00 a.m., in
room 1100 Longworth House Office Building, Hon. E. Clay Shaw,
Jr. (Chairman of the Subcommittee) presiding.
[Advisories announcing the hearing follow:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
FOR IMMEDIATE RELEASE
March 15, 2000
No. SS-12
Shaw Announces Hearing on
Work Incentives for Blind and Disabled
Social Security Beneficiaries
Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing examining work incentives in
the Social Security disability program for those who are blind and
those with other disabilities. The hearing will take place on Thursday,
March 23, 2000, in room B-318 Rayburn House Office Building, beginning
at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include policy experts and advocates for blind and
disabled individuals as well as beneficiaries who have been affected by
these policies. However, any individual or organization not scheduled
for an oral appearance may submit a written statement for consideration
by the Committee and for inclusion in the printed record of the
hearing.
BACKGROUND:
Social Security provides benefits for individuals who are blind or
disabled and unable to work because of their medical conditions. To
qualify for benefits, an individual must be unable to perform work for
pay due to any medically determinable physical or mental impairment. A
person is considered able to work or engage in substantial gainful
activity (SGA) if earning at or above a certain dollar level (known as
the SGA level). The SGA test applies to both determining initial and
continuing eligibility for benefits.
Prior to 1977, all disability beneficiaries, as well as blind
beneficiaries, were subject to the same SGA limit, established in
regulation by the Social Security Administration. The Social Security
Amendments of 1977 (P.L. 95-216) increased the amount of the SGA limit
for blind beneficiaries to the same amount as the age 65 earnings
limit, but did not change the SGA limit for all other disabled
beneficiaries. The Contract with America Advancement Act of 1996 (P.L.
104-121) increased the age 65 earnings limit, but did not change
current law with respect to the blind.
In 2000, the SGA limit for blind beneficiaries is $1,170 per month
and this amount is indexed annually for wage growth. The limit for non-
blind disability beneficiaries was increased from $500 to $700 per
month in July 1999, after remaining at the same level for the past 10
years.
In announcing the hearing, Chairman Shaw stated: ``We should do all
we can so every disabled worker has opportunities and incentives to
stay in the workforce. Everyone wants that. That is what the Ticket to
Work legislation passed last year was all about. But we need to do
more. This hearing will help to show us the way.''
FOCUS OF THE HEARING:
The hearing will focus on the role of earnings in determining
initial and continuing eligibility for disability benefits, a review of
the differences in current law for blind individuals and those who have
other disabilities, and an assessment of costs and employment
experiences of individuals who are blind and individuals with other
disabilities.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch
diskette in WordPerfect or MS Word format, with their name, address,
and hearing date noted on a label, by the close of business, Thursday,
April 6, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways and
Means, U.S. House of Representatives, 1102 Longworth House Office
Building, Washington, D.C. 20515. If those filing written statements
wish to have their statements distributed to the press and interested
public at the hearing, they may deliver 200 additional copies for this
purpose to the Subcommittee on Social Security office, room B-316
Rayburn House Office Building, by close of business the day before the
hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. All statements and any accompanying exhibits for printing must
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect or
MS Word format, typed in single space and may not exceed a total of 10
pages including attachments. Witnesses are advised that the Committee
will rely on electronic submissions for printing the official hearing
record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a
statement for the record of a public hearing, or submitting written
comments in response to a published request for comments by the
Committee, must include on his statement or submission a list of all
clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the
name, company, address, telephone and fax numbers where the witness or
the designated representative may be reached. This supplemental sheet
will not be included in the printed record.
The above restrictions and limitations apply only to material being
submitted for printing. Statements and exhibits or supplementary
material submitted solely for distribution to the Members, the press,
and the public during the course of a public hearing may be submitted
in other forms.
Note: All Committe advisories and news releases are avaailable on
the World Wide Web at ``HTTP://WAYSANDMEANS.HOUSE.GOV''.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
NOTICE--CHANGE IN LOCATION
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
March 16, 2000
No. SS-12-Revised
Change in Location for Subcommittee Hearing on
Work Incentives for Blind and Disabled
Social Security Beneficiaries
Thursday, March 23, 2000
Congressman Clay Shaw, Jr., (R-FL), Chairman of the Ways and Means
Subcommittee on Social Security, today announced that the Subcommittee
hearing on examining work incentives in the Social Security disability
program for those who are blind and those with other disabilities,
previously scheduled for Thursday, March 23, 2000, at 10:00 a.m., in
room B-318 of the Rayburn House Office Building, will now be held in
the main Committee hearing room, 1100 Longworth House Office Building.
All other details for the hearing remain the same. (See
Subcommittee press release No. SS-12, dated March 15, 2000.)
Chairman Shaw. Today, the Subcommittee is considering how
best to encourage work and earnings for a special group, and
that is people with disabilities. We have already taken some
major steps to encourage work through last year's Ticket to
Work law. This law will better help beneficiaries prepare for
work and keep jobs. It extends health care coverage, encourages
service providers to focus on results, and maintains the safety
net for those who need it. But we can't stop there.
Fortunately, as we consider ways to further improve the
disability program, there is much we already agree on. Let us
focus on that.
We all agree that federal programs should promote work and
self-sufficiency. We all agree everyone should be offered a
``hand up'' rather than a ``handout''. And we all agree
disability programs must protect those who are simply too
disabled to work.
Our commitment to the Ticket law establishes exactly that,
but each of us must also consider some tough questions as we
listen to today's witnesses. For example, are proposed changes
consistent with the purposes of the disability program? Are
they fair to all disabled beneficiaries as well as to current
workers whose hard-earned wages support the program? And will
they threaten the disability program's safety net, which
already will start running in the red by 2006?
Despite these challenges, I am convinced that we can do
more to encourage work. Ronald Reagan once said, ``The very key
to our success has been our ability, foremost among nations, to
preserve our lasting values by making change work for us rather
than against us''. Especially with complicated government
disability programs, such change never occurs easily. But that
is all the more reason for us to dig in and get to the bottom
of the issues that have kept others from doing more to help
every disabled person who wants to work.
And I will now yield such time as he may consume to the
gentleman from California, Mr. Matsui.
Mr. Matsui. Thank you very much, Mr. Chairman, I appreciate
your yielding to me, and appreciate the fact that you are
holding this hearing.
Over the past year, the Congress has made significant
bipartisan progress in ensuring that the Social Security
program encourages people to participate fully in the nation's
economy and provides them with incentives to join, return to or
remain in the workforce.
At the end of last year, the Congress passed on a
bipartisan basis and the President signed into law the Ticket
to Work and Work Incentives Act. The Ticket to Work Act assists
disability beneficiaries attempting to return to work or who
are struggling to remain in the workforce by expanding their
access to public and private vocation rehabilitation providers,
extending the period for which they are eligible for Medicare
coverage, and creating new options for states to allow
individuals with disabilities to purchase Medicaid.
Just three weeks ago, the House unanimously passed a
bipartisan legislation to repeal the Earnings Test for Social
Security beneficiaries who have attained the normal age of
retirement. H.R. 5 allows the most experienced members of our
workforce, our nation's senior citizens, to continue work
without experiencing a reduction in their Social Security
benefits. Despite this progress, we can still do more to look
at Social Security programs to see where we can improve the
ability of beneficiaries to take part in the workforce.
As we all know, we are in an environment of budget
constraints. On the one hand, we have a limit on budget surplus
and budget resolutions that we are going to discuss today that
will challenge our ability to fund health, education and social
programs while allowing for tax cuts. And on the other hand, we
have a Social Security surplus that we will set aside for debt
reduction and help us pay for the benefits in the future.
We are determined to do our best for Social Security
recipients and to explore ways to improve their ability to
participate in the labor force while working within our budget
limits. One such avenue is a requirement in the Ticket to Work
and the Work Incentives Act that the Social Security
Administration conduct demonstration projects on possible
modification on earnings limitation for the disabled.
In addition, the bill mandates a GAO study on the topic as
well. The information that we will receive on these two
initiatives will be very useful and helpful to our
investigation into the costs and effectiveness of various
incentive policies.
Today, I look forward to the testimony of the
representatives from the Social Security Administration and the
GAO, and I am eager to hear from disability beneficiaries about
the impact that possible work incentive policies may have on
them.
In the end, enhanced work incentives in the Social Security
program benefit more than the disability community themselves,
they benefit the country as a whole.
I look forward to working with Chairman Shaw and the other
members of the Subcommittee to make the most of this very, very
important opportunity. Thank you.
Chairman Shaw. Thank you, Bob.
Because of the length of our agenda today, I am going to
try to hold all the witnesses within the five-minute limit.
Each person to testify this morning, we have your full
statement that will be made a part of the record, and we would
hope that you can summarize within the time allotted, and I
would hope we can have everyone's cooperation on that.
Our first witness is Member from the State of Maryland. Mr.
Ehrlich.
STATEMENT OF THE HON. ROBERT L. EHRLICH, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF MARYLAND
Mr. Ehrlich. Thank you, Mr. Chairman. I will certainly hold
to the daily rule with respect to the five-minute limitation. I
really appreciate the opportunity to briefly highlight my
written testimony which I submitted for the record, and I am
not going to read it.
Members of this Committee, particularly the Chairman, know
this issue very well. And, again, I thank you for this
opportunity today.
Very briefly, Mr. Chairman, a couple of points I would like
to hit with respect to history and the facts and the
sponsorship, and then a final plea with regard to this
particular issue.
The Chairman and Members of the Subcommittee are well aware
of the history of the Social Security limitation and the
linkage between seniors and the blind. It occurred in the
1970s, the original linkage came out of this Committee.
As part of the Contract With America, in fact, the senior
citizens' earnings limitation was phased in over five years
from $11,000 to $30,000. At that time, however, not because of
any compelling policy reasons, but because of the need to
balance the budget, there was a de-linkage. Seniors and the
blind were de-linked.
It has been that case now for the past four years. This
year, given the great work of this Committee, the Subcommittee
and the full Committee, and now the House, with respect to the
seniors' limitation, I thought the time would be good with
respect to doing something for the blind.
The Chairman is well aware that at least past leadership
has made representations to the blind community with regard to
``fixing'' this linkage problem, and I am truly hopeful that
the Chairman, the Subcommittee and the full Committee will
follow through on that promise made a number of years ago.
The Chairman is well familiar with the facts. During a time
of technological innovation, a steaming economy, very low
unemployment, the blind suffer from a 70-percent unemployment
rate. The primary reason, in my view and in the view of the
folks you are going to hear today, is the ``disincentives''
built into the code with respect to this earnings limitation.
H.R 1601 has over 280 bipartisan co-sponsors in this House.
Nineteen Members of the Ways and Means Committee co-sponsor
this bill.
Mr. Chairman, we can talk about policy. We can talk about
equity. I believe that to at least re-link the blind with the
seniors regardless of what happens with regard to the senior
bill, whether that is a clean bill or whether it comes back
from the Senate with a phase-in, or whatever, is the right
thing to do. These are people who want to work. Given the
technology we have in this country today, they can work. I
think this Congress should all be about empowering people who
simply want to work, and whether it is the Social Security Act,
whether it is our Code that provides the disincentive, I
believe it is incumbent upon this Congress to remove those
disincentives from the law.
I truly thank you for your interest. I know your personal
interest in this issue. I thank you for the time today, and I
am going to let the folks who are impacted by this inequity in
our law testify before the Committee. And, again, I thank you,
and yield back.
[The prepared statement follows:]
Statement of the Hon. Robert L. Ehrlich, Jr., a Representative in
Congress from the State of Maryland
Good morning, Mr. Chairman and Members of the Subcommittee.
I appreciate the opportunity to talk to you about eliminating a
work disincentive for blind Americans. As many of you know, I
have repeatedly introduced and pushed for passage of
legislation to restore work incentives for the blind. Last year
I introduced H.R. 1601, the Blind Empowerment Act (BEA). This
bipartisan bill has more than 280 co-sponsors. This legislation
could positively impact as many as a quarter million blind
Americans.
For nearly twenty years, the blind and senior citizens were
linked for the purposes of the Social Security Earnings Test.
In 1996, this historic link was broken, not to make a
significant policy change, but to balance the budget. Under
that legislation, Congress provided seniors with an opportunity
to increase their earnings to $30,000 by 2002 without losing
their Social Security benefits; however, blind individuals were
limited to earnings of approximately $14,000 in calendar year
2000. Blind individuals who earn more than this earnings limit
threshold lose all of their benefits. In contrast, a senior
citizen in the same situation has their benefits reduced at a
rate of $1 for every $3 earned over the limit.
To be sure, this lower threshold and complete loss of
benefits for the blind creates major disincentives to work.
Presently, the unemployment rate for the blind is approximately
70%. In effect, Congress penalizes blind workers for trying to
improve their quality of life for themselves and their
families. This is unacceptable. Congress should encourage, not
discourage, blind individuals to work.
My legislation (H.R. 1601) accomplishes this. Specifically,
my bill removes the existing disincentives by re-linking the
blind with the seniors. Most importantly, H.R. 1601 restores
fairness for the blind by honoring the co-sponsors' pledge for
parity with senior workers.
The Ways and Means Committee recently voted to repeal the
earnings limitation for seniors. Shortly thereafter, the House
overwhelmingly affirmed this repeal and the Senate has likewise
done the same. I strongly support the repeal of the seniors
earnings limitation. I do believe, however, that Congress has a
responsibility to restore fairness and work incentives for the
blind. By adopting H.R. 1601 this Committee can accomplish this
goal. I urge you to take this opportunity and help blind
Americans to reach their full working potential. I pledge to
continue my efforts on behalf of all blind Americans.
Again, Mr. Chairman, thank you for affording me the
opportunity to testify before the Social Security Subcommittee.
Chairman Shaw. Thank you, Bob. Mr. Matsui?
Mr. Matsui. I have no questions. I would like to thank Mr.
Ehrlich.
Chairman Shaw. Mr. Doggett?
Mr. Doggett. No questions.
Chairman Shaw. Well, I do know you have talked to me on
numerous occasions. I know your interest in this issue, and we
appreciate your being here this morning.
Mr. Ehrlich. Thank you, Mr. Chairman. I am going to get to
my Commerce markup before the Chairman gets angry at me. Thank
you.
Chairman Shaw. We next have a panel of witnesses from the
Social Security Administration. We have Dr. Susan Daniels,
Deputy Commissioner, Disability and Income Security Programs;
and from the U.S. General Accounting Office, Barbara Bovbjerg,
Associate Director, Education, Workforce and Income Security
Issues, Health, Education and Human Services Division; and she
is accompanied by Carol Petersen, who is the Assistant Director
of the Education, Workforce and Income Security Issues, Health,
Education and Human Services Division.
Dr. Daniels, I beg your pardon. I put everybody together,
and that is not the way it is supposed to be this morning. So,
everyone can remain at the table, but we will start out with
Dr. Daniels and go to questioning, and then get to the other
witnesses from the United States General Accounting Office. Dr.
Daniels.
STATEMENT OF SUSAN DANIELS, PH.D., DEPUTY COMMISSIONER,
DISABILITY AND INCOME SECURITY PROGRAMS, SOCIAL SECURITY
ADMINISTRATION
Dr. Daniels. Mr. Chairman, there certainly are enough
chairs up here, so anyone could join if they would like to.
Mr. Chairman, Members of the Subcommittee, thank you so
much for inviting me here today to talk about the work
incentives for blind individuals and other people with
disabilities.
The Social Security Act defines disability as the inability
to engage in any substantial gainful activity (SGA) due to a
medically determinable physical or mental impairment. We use
how much a person earns as a guideline for evaluating whether
work is substantial and gainful, and whether we may consider
them eligible for benefits.
Blindness, sometimes referred to as statutory blindness, is
the only impairment defined in the Act itself; all other
impairments are defined by regulation.
The Social Security Administration has approximately
120,000 statutorily blind individuals on our rolls, about
100,000 of them on Disability Insurance.
How do we determine if a person is actually working? For
most individuals, that is done through regulation, and since
July 1999 the SGA amount has been $700. For individuals who are
blind, the Act itself specifies the computation of the SGA
amount, and since January 2000 that has been $1,170 a month.
Prior to 1978, the SGA amount for the blind and nonblind were
identical. The Social Security amendments of 1977 linked the
SGA amount for individuals who are blind and the retirement
earnings test. The SGA amount for individuals who are blind and
the retirement earnings test rose from $334 a month in 1978 to
$980 a month in 1995. For the nonblind, the SGA amount rose
from $260 a month in 1978 to $500 a month in 1995.
The Contract With America Advancement Act in 1996
significantly increased the retirement earnings test and de-
linked the SGA amount for individuals who are blind from that
test, and it indexed the then-SGA amount for individuals who
are blind to average wage growth. Meanwhile, SSA increased the
SGA for nonblind individuals to $700 a month last summer.
The Social Security disability programs that we administer
may not be the exclusive and permanent source of income for all
beneficiaries, but they can be a stepping stone to improve the
economic conditions of people with disabilities through Return
to Work initiatives.
There are several work incentives in both the SSI program
and in the Disability Insurance program, which were further
enhanced by the Ticket to Work and Work Incentives Improvement
Act of 1999.
We also refer individuals with disabilities to private and
public vocational rehabilitation programs. Last year, Social
Security reimbursed State Vocational Rehabilitation agencies
$120 million for the rehabilitation of over 11,000
beneficiaries.
As you well know, you have worked two hard years on
producing legislation to improve the work incentives. Your
success culminated in the President signing the Ticket to Work
and Work Incentives Improvement Act into law last December. I
want to express my thanks to you, Mr. Chairman, and to all
members of this Committee for getting that important piece of
work done. It is really a magnificent bill.
A quick review. We now have tools in place under the Ticket
to Work program in Social Security to extend Part A Medicare
premium-free for individuals who return to work for eight and a
half years; a quick reinstatement of benefits if working and
the workplace doesn't work out for beneficiaries; and, finally,
the Medicaid buy-in for states to increase economic and health
security in the states.
H.R. 1601 and S. 285 would reset the SGA amount for blind
people back to the retirement earnings test amount. Currently,
the earnings retirement test is $1,417 a month. If these bills
are enacted in the year 2000, the five-year cost would be about
a billion dollars and the long-term cost .01 percent of
payroll, an impact on the long-term solvency of the trust fund.
H.R. 5 as passed by the House and the Senate would
eliminate the retirement earnings test completely. The
President has promised to sign a clean bill to eliminate the
retirement earnings test. Obviously, such enactment, combined
with the previously discussed legislation, would completely
eliminate the SGA for blind individuals, thus making all
statutorily blind people eligible for our programs.
Who would benefit? Such a significant policy change would
benefit primarily those individuals who are currently blind and
working because they would become immediately eligible for
Social Security Disability.
In the year 2000, if this bill was enacted, the five-year
cost would be $2.6 billion and the long-term costs .03 percent
of payroll, an even greater impact on the trust fund.
As we think about changes, a few questions should be kept
in mind. Have we given the time and the resources and support
we need to achieve and measure the new work incentives you
passed last year? Are additional ones needed now? If we
eliminate work as a criteria for benefits, we create a new
program that pays people based on a significant limitation.
Which limitation should that be? Which impairments would be
covered? Should this supplement extend to nonworking age
people, say, children or the elderly who are in great need? And
what is the long-term effect on the solvency of Social
Security, and how will it be financed?
A policy change of great significance is possible but is
likely to require a long period of conversation and significant
financial analysis.
Mr. Chairman, we want to build the momentum provided by the
enactment of the Ticket to Work bill to increase incentives for
people with disabilities to work. Commissioner Apfel has
reaffirmed our commitment to make every effort to bring as many
Americans with disabilities into the workforce as possible.
I would be delighted to take your questions. Thank you.
[The prepared statement follows:]
Statement of Susan Daniels, Ph.D., Deputy Commissioner, Disability and
Income Security Programs, Social Security Administration
Thank you for inviting me to discuss current work
incentives for blind individuals and other people with
disabilities. This is an important issue, and the Social
Security Administration looks forward to working with you on
finding ways to help more Americans with disabilities
successfully return to work.
Today I would like to discuss the definition of disability
and how work activity for both blind and non-blind individuals
relates to it; our current work incentives and the recent
changes in the law; and some pending proposals in that area.
Definition of Disability
The Social Security Act (the Act) defines disability as the
inability to engage in any substantial gainful activity (SGA)
because of a medically determinable physical or mental
impairment(s):
That can be expected to result in death, or
That has lasted or, that we can expect to last for
a continuous period of not less than 12 months.
We use earnings guidelines to evaluate whether the work
activity is SGA and whether we may consider someone disabled
under the law. While this is only one of the tests used to
decide if a person is disabled, it is a critical threshold in
disability evaluation.
Blindness (sometimes referred to as statutory blindness) is
the only impairment defined in the Act; all other impairments
are defined in regulations. Blindness is defined as central
visual acuity of 20/200 or less in the better eye with best
correction, or a limitation in the field of vision in the
better eye so that the widest diameter of the visual field
subtends an angle of 20 degrees or less (tunnel vision).
Blind individuals do not have to meet the ``regency of
work'' test (generally, work in 20 out of the last 40 quarters)
to be eligible for disability benefits. Approximately 120,000
of our beneficiaries meet the statutory definition of
blindness. (About 50,000 are Supplemental Security Income
beneficiaries aged 18 to 64; approximately 100,000 are Social
Security beneficiaries; about 30,000 are concurrently receiving
benefits under both programs.)
Substantial Gainful Activity (SGA)
The Act requires the Commissioner to prescribe in
regulations the criteria for determining when earnings
demonstrate an individual's ability to engage in SGA. The Act
also specifies that a different definition of SGA applies to
blind individuals. With an impairment other than blindness,
effective July 1999 earnings over $700 a month generally
demonstrate SGA. For someone who is blind, effective January
2000, earnings over $1,170 a month generally demonstrate SGA.
Prior to 1978, the SGA amount was the same for both blind
and non-blind individuals. The Social Security Amendments of
1977 made the SGA threshold for blind individuals the same as
the monthly exempt amount under the retirement earnings test
(RET) for individuals at or above the normal retirement age
(NRA), an amount which has generally been indexed that amount
to average wage growth. At the time, Senator Birch Bayh
indicated that blindness was a ``distinct and unique
condition'' and that ``The blind, as a group, suffer largely
artificial impediments when they seek to enter and compete in
the labor market.'' The two thresholds (the exempt amount and
SGA) rose together from $334 a month in 1978 to $940 a month in
1995, while the non-blind SGA amount rose from $260 a month in
1978 to $500 a month in 1990.
The Contract with America Advancement Act of 1996, enacted
March 29, 1996, significantly increased the RET exempt amount
(rising to $2,500 a month in 2002 for individuals at NRA). It
de-coupled the SGA amount for blind individuals from the RET,
and instead continued to index the then-existing SGA amount for
average wage growth. Meanwhile, SSA increased the regular SGA
amount in regulations to $700 a month effective July 1999.
For individuals who are blind and age 55 or older, if their
work requires a lower level of skill and ability than the work
that they did before age 55, benefits are suspended, not
terminated, when earnings demonstrate SGA. Benefits are then
payable for any subsequent month that earnings fall below SGA.
Work Incentive Provisions
Congress enacted work incentive provisions that were
strongly supported by the Administration to provide
beneficiaries with the support they need to move from benefit
dependency to independence. Work incentives assist
beneficiaries with disabilities to enter or reenter the
workforce by protecting entitlement to cash payments and/or
health care until this goal is achieved.
Some work incentives are common to both the Social Security
Disability Insurance (SSDI) and Supplemental Security Income
Program (SSI), while some are unique to one program or the
other. Because even the common work incentives may be treated
differently by either program, I would like to briefly discuss
work incentives as each program treats them. I would also like
to point out the special work incentives that apply only to
blind beneficiaries of either program. SSDI Work Incentives
There are several work incentives for SSDI beneficiaries
built into the Act, most notably impairment-related work
expenses (IRWE), the trial work period (TWP), the extended
period of eligibility for reinstatement of benefits (EPE), and
continuation of Medicare. These are dependent upon the disabled
beneficiary continuing to have a disabling impairment.
When determining SGA, we deduct from gross earnings the
cost of certain impairment-related work expenses. We deduct
beneficiaries' IRWE paid during a period of work when:
The item or service enables them to work;
They need the item or service because of their
disabling impairment;
They pay the cost and are not reimbursed by
another source (e.g., Medicare, Medicaid, private insurance);
The expense is ``reasonable''--that is, it
represents the standard charge for the item or service in their
community.
The TWP allows disabled beneficiaries to test their ability
to work for at least 9 months. During the TWP, beneficiaries
receive full benefits regardless of how high earnings might be.
The TWP continues until the accumulation of 9 months (not
necessarily consecutive) of ``services'' performed within a
rolling 60-consecutive-month period. We use this ``services''
rule only to control when the TWP stops. ``Services'' means any
activity in employment or self-employment for pay or profit or
of the kind normally done for pay or profit (whether or not it
is SGA). We currently consider work to be services if earning
are more than $200 a month (or more than 40 self-employed hours
in a month).
Once benefits have been ceased due to SGA, the EPE allows
automatic reinstatement of benefit payments for any month in
which earnings fall below SGA. Benefits can be reinstated
anytime during the 36-month period following the end of the
TWP, and will continue as long as requirements are met.
Currently, Medicare coverage continues during this period and
for three additional months. At that point, disabled
individuals can buy Medicare coverage. Effective October 1,
2000, based on the new Ticket to Work Incentives Improvement
Act, premium-free Medicare is extended an additional 4 years.
In addition to providing incentives to work, we also refer
disabled beneficiaries to their local State Vocational
Rehabilitation VR agency, or to other service providers in the
public and private sector who try to help beneficiaries return
to work. In fiscal year 1999, SSA paid State VR agencies about
$120 million for their services provided to
over 11,000 beneficiaries with disabilities who worked at
least 9 months at the substantial gainful activity level.
Although this was a record year for reimbursements, we look
forward to much more progress in this area.
SSI Work Incentives
Some general information about the SSI program is useful to
explain the work incentive provisions as they apply to that
program. The SSI program differs from Social Security in that
the monthly Federal benefit standard (currently, $512 for an
individual and $769 for an individual with an eligible spouse)
is reduced dollar-for-dollar by the amount of the individual's
``countable'' income--i.e., income less all applicable
exclusions. The result of this computation determines whether
the individual (or couple) is eligible and the amount of the
benefit payable.
SSI law defines two kinds of income: earned and unearned.
Earned income is wages, net income from self-employment,
remuneration for work in a sheltered workshop, royalties on
published work, and honoraria for services. All other income
(including income received in kind) is unearned.
When determining an individual's countable income,
exclusions are taken for various types of income. There is a
general $20 exclusion, generally applied to an individual's for
unearned income. In the case of earned income, we exclude a
portion of the $20 general exclusion that has not been used,
and then exclude the first $65 and one-half of the remainder of
the earnings. This greater exclusion for earned income acts as
a work incentive for all SSI recipients.
In determining the benefits of disabled individuals, we
exclude IRWEs. For the disabled, we exclude work expenses
directly related to the individual's disability, such as
attendant care services, assistance in travelling to and from
work and personal assistance related to work. I will discuss
allowable deductions for blind SSI beneficiaries in greater
detail later.
Under SSI we also exclude income set aside or being used to
pursue a plan for achieving self-support (PASS) that has been
established by a disabled or blind person. These plans are
established to help blind and disabled individuals become self-
supporting by excluding income that is set aside to help the
individual reach a specific occupational goal. In December
1999, there were 1,045 SSI recipients with a PASS established,
although not all of those individuals reported earnings for
that month.
Finally, the laws governing SSI contain provisions that
enable blind and disabled individuals to continue working and
receiving income beyond the limit that would normally result in
ineligibility.
Under section 1619(a), a disabled beneficiary who would
cease to be eligible because of earnings over the SGA limit
(currently $700 a month) can continue to receive cash benefits
until the amount of earnings would cause him or her to be
ineligible for benefits under SSI income counting rules. Being
a recipient of this special benefit equals being an ``SSI
recipient'' for Medicaid eligibility purposes.
Section 1619(b) provides ``SSI recipient'' status for
Medicaid eligibility purposes for certain SSI recipients. These
individuals have earnings which preclude the payment of an SSI
benefit but are not sufficient to provide a reasonable
equivalent of the SSI, social services, and Medicaid benefits
that the individuals would have in the absence of earnings. For
these individuals, the loss of the social service and Medicaid
benefits would seriously inhibit their ability to continue
working. However, these individuals have to be otherwise
eligible except for their earnings.
According to SSAs Office of Research, Evaluation and
Statistics, there were approximately 340,000 SSI disability
beneficiaries (or 6.4 percent) who were working In December
1999. About 70,000 of these individuals were receiving benefits
under section 1619(b). These beneficiaries do not receive an
SSI payment but retain their Medicaid coverage. Almost three-
fourths of those who received this type of SSI benefit had
amounts of earned income below the substantial gainful activity
level.
Blind Work Incentives
I have already discussed how the SGA level differs for
blind beneficiaries and how it applies to SSDI beneficiaries
who are blind and age 55 or older. SSA also does not count any
earned income a blind SSI beneficiary receives that is used to
meet any expenses needed to earn that income in determining SSI
eligibility and payment amount. Unlike IRWE, blind work
expenses (BWE) do not have to be related to blindness. As a
result, any expense reasonably attributable to work is to be
excluded, dollar for dollar, not simply those related to the
impairment.
Some examples include guide dog expenses; transportation to
and from work; Federal, state, and local income taxes; Social
Security taxes, attendant care services, professional
association fees; and union dues.
Ticket to Work and Work Incentives Improvement Act of 1999
As you know, the President signed the Ticket to Work and
Work Incentives Improvement Act of 1999 (the ``Ticket'') into
law last December. I want to express my thanks, Mr. Chairman,
to you, and the members of the Subcommittee, for your support
in getting the ``Ticket'' passed. This legislation will help
disabled individuals who want to work by lessening their fears
about losing health care coverage and income during attempts to
work.It improves and expands their VR choices, providing
enhanced work incentives, outreach activities and new service
structures.
The provisions most pertinent to today's discussion
include:
The Ticket to Work and Self-Sufficiency Program--
which provides beneficiaries with opportunities to get
vocational rehabilitation services, employment services or
other support services from approved providers that they can
choose, and which will be phased in beginning 2001.
Part A premium-free Medicare coverage for
disability beneficiaries who return to work is extended for
four and one-half years beyond the current limit effective Oct.
1, 2000.
Quick reinstatement within five years without
filing a new application for beneficiaries with a disabling
condition whose benefits have ended because of earnings from
work.
Prohibition against initiation of a continuing
disability review (CDR) while a beneficiary is--using a
ticket--or based on the work activity of an individual
receiving benefits for at least 24 months.
Ever since the ``Ticket'' was enacted, we have been
actively engaged in the hard work of implementing its various
provisions. We again look forward to working with you as the
different provisions take shape and begin to show the results
we anticipate--more people with disabilities entering or
reentering the workforce.
Pending Legislation
Legislation has been introduced in both the House (H.R.
1601) and the Senate (S. 285) that would equate the SGA amount
for blind individuals with the RET exempt amount at NRA.
Currently that amount is $1,417 a month, which is scheduled to
rise to $2,500 a month in 2002 (30,000 per year), and to be
indexed to average wage growth thereafter. I would like to
point out that approximately 60 percent of workers today earn
$30,000 per year or less. If these bills were enacted effective
2000, we estimate 5-year costs of $0.9 billion and long-term
costs to the Social Security trust funds at -0.01 percent of
taxable payroll; in other words, passage of such a provision
would have a detrimental impact on long-term solvency. Any
consideration of these proposals should be done in the context
of Social Security solvency legislation.
H.R. 5 as passed by the House would eliminate the RET at
NRA effective this year. As you know, the President has
promised to sign a clean bill to eliminate the RET at NRA.
Obviously, such enactment would affect the preceding SGA
proposal; that proposal, if combined with H.R. 5, would
completely eliminate the SGA amount for blind individuals, thus
permitting a blind individual to earn any amount and still be
eligible for benefits. Under this scenario, effective 2000, we
estimate 5-year costs of $2.6 billion and long-term costs at
-0.03 percent of taxable payroll, an even greater negative
impact on long-term solvency. Note that the elimination of the
RET at NRA has no impact on long-term solvency, but there are
additional Medicare and Medicaid costs as well.
Conclusion
Mr. Chairman, we want to build on the momentum provided by
the enactment of the ``Ticket'' and to increase incentives to
work for all people with disabilities. Our commitment is to
make every effort to enrich the lives of people with
disabilities and to help those who want to work do so.
As Commissioner Apfel testified before this Subcommittee
last year, as a nation, we are best served when all our
citizens have the opportunity to contribute their talents,
ideas, and energy to the workforce. We look forward to working
together with the Subcommittee and Congress to achieve the
proper equilibrium of equity and actuarial balance in the area
of disability work incentives. I will be happy to answer any
questions the Members may have.
Chairman Shaw. Thank you. Mr. Matsui?
Mr. Matsui. Thank you, Mr. Chairman. Dr. Daniels, thank you
for your testimony, it is very helpful, obviously. You
indicated that if we raise the earnings limit for the disabled
to $17,000 a year--from $700 to whatever the current level
would be, the level before the new bill becomes law, it would
be .03 in terms of the negative impact on solvency of the
Social Security system?
Dr. Daniels. That is the estimate if we eliminate the SGA
amount just for our blind beneficiaries.
Mr. Matsui. It is my understanding that the actuaries,
however, do take into consideration that there would be
indexing of that earnings limit in terms of doing a calculation
over a 75-year period, is that correct?
Dr. Daniels. Well, yes. The notion of substantial gainful
activity, just that notion itself, has to continue in actuarial
terms to change and grow over time, or else it would lose all
meaning because wages grow over time.
Mr. Matsui. So they do expect--the actuaries, in their
calculations over the 75-year period, do expect it to grow or
increase over time?
Dr. Daniels. That is correct.
Mr. Matsui. So, if we begin today--and the only reason--
because it is such a small amount, given the fact that the CPI
is so small, obviously it is good for our economy--probably not
good for, obviously, people that are receiving fixed benefits--
but if you begin indexing, then this would have no impact on
the solvency of the Social Security trust fund in terms of
where we are today, over a 75-year period?
Dr. Daniels. Well, what the actuaries actually do is assume
the current law. And so they look at what the growth would be
in SGA given current law which is right now indexing the SGA
for blind individuals as currently indexed to average wage
growth, but if we eliminated it, then there would be an even
larger number of people eligible for the program.
Mr. Matsui. You are talking about eliminating the earnings
limit?
Dr. Daniels. Eliminating the substantial gainful activity
test, right.
Mr. Matsui. Oh, but I wasn't suggesting--I was suggesting
in my question that if you indexed it--
Dr. Daniels. It is indexed today.
Mr. Matsui. It is indexed today?
Dr. Daniels. Yes, it is. The blind SGA is currently indexed
to average wage growth.
Mr. Matsui. Well, I thought it stated at $700.
Dr. Daniels. No, $700 is for those individuals who are not
blind.
Mr. Matsui. For individuals who are--
Dr. Daniels. Not blind. The SGA is $700 a month.
Mr. Matsui. Okay. But if you indexed it for both the blind
and the nonblind, would it then have an impact on the trust
fund?
Dr. Daniels. It would have an immediate and small impact
because there is an assumption that SGA will grow as wages
grow. So the long-term impact is very negligible to index the
SGA.
Mr. Matsui. That is because--again, I want to go back and
repeat myself--because the actuaries take into consideration
the indexation on the basis of wages.
Dr. Daniels. Absolutely.
Mr. Matsui. So it shouldn't have any impact. It shouldn't
even be a negligible impact.
Dr. Daniels. I can't believe it took us this long to get to
agreeing with your statement. Yes.
Mr. Matsui. Now, I guess if we would have been indexing
when we decoupled the blind from those 65 and older--I don't
know what the inflation rate would have been over that last few
years, but it probably would have been somewhat substantial,
and I would imagine this would make some sense to do--it
obviously may not make a lot of folks happy--but at least it
would be a start. Is that something that you--and I know you
can't make a policy decision--obviously, this is a new
discussion--but at least would that be something that you would
consider recommending as a solution to this?
Dr. Daniels. Well, we are not taking a position today--
Mr. Matsui. I understand that.
Dr. Daniels.--but what I can say to you is just to keep in
mind that the blind SGA is currently indexed by statute--
Mr. Matsui. Right, but not the balance of the disabled.
Dr. Daniels.--but the balance of our beneficiaries have an
SGA amount fixed at $700 a month, which can be changed by
regulation.
Mr. Matsui. Right. Okay. Well, I don't have anymore
questions in this area. I sense that the real way we probably
will have to address these issues when we deal with Social
Security comprehensively, that is my belief given the fact that
we have a lockbox, and then given the fact that the surplus is
not as large at this time, and we obviously don't want to use
on-budget surpluses. Is that a correct analysis of the position
today?
Dr. Daniels. The President is very eager to sign a clean
bill on the retirement earnings test, and a decision to change
substantially the role and function of the disability program,
which the SGA is a very significant part of, is possible, but
requires a great deal of conversation and financial analysis.
Mr. Matsui. Thank you. Thank you very much.
Dr. Daniels. You are welcome, Mr. Matsui. Thank you.
Chairman Shaw. Dr. Daniels, I have a number of questions
here that have been supplied by staff that I would like to read
to you, and if you could answer, we would appreciate it.
What is substantial gainful activity? You mentioned that
SGA is a ``critical threshold'' in disability evaluation. Would
you explain what we mean when we talk about substantial gainful
activity? What would it mean to have a ``disability'' program
that does not consider ability to work and the earnings as a
test of whether someone is disabled?
Dr. Daniels. Well, I think it is really--the words
``substantial gainful activity'' are a lot of big legal words
for the notion of work and ensuring work.
When individuals pay Social Security payroll taxes, what
they are getting is not only an opportunity to have income when
they retire, but if they are unable to work because of a
disability, an opportunity to have their income replaced. So
the notion is that people of working age should work if they
can, but if they can't they are insured against the loss of
income due to disability.
So, our first question when we evaluate whether or not a
person is eligible for Disability Insurance benefits, is to ask
it they are working. And SGA is just a way of determining if a
person is really earning a real income, not just a token income
from some hobby or some small activity, but substantial
activity that produces a real income.
That amount is set for blind individuals by statute, by the
Act itself. For all other people with disabilities who apply,
we set that amount by regulation. We assume that if a person
today is earning less than $700 a month, they are not doing
substantial gainful activity, or that is they are not really
working enough to support themselves. And if they have a mental
or physical impairment, they become eligible for the program.
For individuals who are blind, however, the amount is
$1,170 a month because that is what the statute has
established. We do not set that by regulation.
So, basically, the question is, do we want to have a test
for work? Do we want to say that we provide income security for
individuals because they are unable to work in their working
years? And that pretty much is the question about SGA.
Now, it is possible to have a program where people simply
get a benefit based on a limitation that they might have and
whether or not they work, but that has never been the role of
the Social Security Disability Insurance program. That would be
a supplement--or sometimes in other countries called the
``disability allowance.'' That is a different kind of program,
and the effect of removing SGA is basically to say that an
individual with a significant impairment would simply be
eligible based on that impairment, whether or not he or she is
they are able to work.
Chairman Shaw. Thank you. Mr. Collins?
Mr. Collins. Dr. Daniels, how does the SGA differ from the
earnings limit for seniors?
Dr. Daniels. Well, today, it is not linked. In 1996, with
the Contract with America Advancement Act, the SGA for blind
individuals and the retirement earnings test were de-linked.
They were no longer tracking together in the legislation. But
the SGA for blind individuals was indexed to average wage
growth. And the growth of the retirement earnings test from
1996 to the year 2002 was greater than it would have been had
it been indexed.
So, in other words, the individuals who are blind, their
SGA is not growing as fast as the retirement earnings test
under current law.
Mr. Collins. What is the difference in the principle behind
it--not the dollar amount? Why is one set at one rate, or fee,
or check, or benefit, than another one? Why do you do these
things?
Dr. Daniels. Well, I think that would be a good question
for me to ask you because I didn't do those.
Mr. Collins. Why did I do that?
Dr. Daniels. I don't know why you did, but let me see--let
me take a good guess, Mr. Collins. When we think about social
insurance, we are thinking about individuals paying in together
so that they can insure themselves against loss of income
either due to aging because they are elderly, or due to
disability, the inability to work during their working years.
And I think that is a very wonderful idea, that we all pull
together to take care of those who need income when they are
elderly and should expect to get some of that back, or who in
their working years are unable to work.
Now, when we say that we would eliminate a retirement
earnings test for the elderly, what we are saying is that even
if you don't have to work or you are retired, you can work if
you can. But we know that a lot of people, as they get older,
find it very difficult to work full-time or to work
consistently, and we are not expecting people who are
retirement age to actually be able to continue to work full-
time; whereas, with the younger population, we expect all those
who can work, to work.
And so the SGA amount for people in their working ages can
be different because its purpose is to say that we only give
our benefits to individuals who are not able to work with their
impairment.
Now, some people are able, regardless of their impairment,
to work, but some are not. And so SGA--the substantial gainful
activity test--becomes a way of saying, ``Well, if you can
work, you should work; but, if you can't, this program is here
to help you''.
Mr. Collins. I have talked to constituents who are blind,
and they have expressed they don't feel like there should be a
total repeal, that there should be some limit, do you agree
with that?
Dr. Daniels. Well, I certainly think that some people
believe that if you go to work, the way the program has a
``financial cliff''--after a year your benefits completely
end--is quite problematic. And in the Ticket to Work and Work
Incentives Improvement Act that you passed last year, you
directed the Social Security Administration to do some
demonstrations, to test out different ways of making that
``cliff'' a ``ramp'' so that people could ease off, and we are
preparing--very, very actively preparing to begin those
demonstrations. I hope in the next few years we will have a
good answer for you on that question.
Mr. Collins. Well, that seems to be the answer because I
see where, with the cliff, it totally can disrupt an
individual's life. Okay. Thank you, ma'am.
Chairman Shaw. Mr. McCrery?
Mr. McCrery. Thank you, Mr. Chairman. I know we have a
vote, and I apologize for being late.
Chairman Shaw. Do you wait until after the vote, or do you
want to go ahead now?
Mr. McCrery. Well, I am mainly interested--and I understand
Mr. Matsui pursued this, I am sorry I wasn't here--but I would
like for you to explain, if you can, why there is a difference
in the amount of income allowed blind disabled and the amount
of income allowed nonblind disabled, if you can. Could you
touch on that? The rationale, the policy rationale for that.
Dr. Daniels. Well, the rationale and the why might not be
exactly the same. The why is that the SGA for blind individuals
is set in the statute itself, by law. The SGA, substantial
gainful activity, amount for nonblind beneficiaries is set in
regulation. Now, that is the way the current provisions are
structured.
So the reason that the SGA for the blind is what it is and
indexed to average wage growth is because the Act says it
should be, and the Act is silent on the SGA amount for
nonblind, or how it is handled in terms of growth. So, that is
the technical answer. If that satisfies you, that is fine.
Mr. McCrery. No, it doesn't.
Dr. Daniels. There is a philosophical answer as well, and
that has to do with the function of the retirement earnings
test and the function of SGA. SGA assumes, or the Disability
Insurance program assumes that people of working age who can
work, should work. But we know that some people can't work.
Some people can't work because of impairments--that is, they
have a health condition or a functional limitation that makes
it impossible for them to work. Those people receive Disability
Insurance. They receive that when they are unable to work, and
that is a great safety net because that happens to many
workers, that they are unable to work. However, it is not the
same thing as being retired. It is not the same policy.
We provide retirement income to people when they reach a
certain age, based on the average--
Mr. McCrery. Maybe I didn't make myself clear. I am
interested--
Chairman Shaw. Let me interrupt, if I may. If you could
mull over that question, we will come right back. We are going
to have to recess--
Mr. McCrery. Let me restate the question so she can mull
over the question that I want her to answer. The thing I am
interested in is the difference between the earnings limit, if
you will, or the SGA limit for blind disabled as opposed to
nonblind disabled. Never mind the Social Security retirement, I
understand why there is a difference there. I want to know the
policy rationale for the difference between blind disabled and
nonblind disabled, and what each of those categories can earn
without losing their benefits.
Dr. Daniels. I will focus on that when you come back.
Chairman Shaw. And with that, stay tuned for that answer.
We will return in approximately 15 minutes.[Recess.]
Chairman Shaw. We had a real cliffhanger, and we were
waiting for Dr. Daniels to reply to Mr. McCrery.
Dr. Daniels. I guess the question is, is this my final
answer, right? [Laughter.]
Dr. Daniels. Mr. McCrery, I gave some thought to the
question that you asked, and I actually consulted here with my
colleagues and some members of the advocacy community, and I
think here the answer goes something like this.
The SGA for blind and nonblind were the same from the
beginning of this program to 1978. And that is when the split
began.
I would imagine when the time of the split was made--and I
wasn't there, and I wasn't in Congress at the time--but I would
imagine that what that split represented to the Congressmen who
made that split was a recognition that individuals with
blindness have very significant and very serious impediments in
getting in the workforce, and great need.
Now, it would be hard today, looking at the changes in
technology and the advancements in education for people with
disabilities to actually--and I think you will hear testimony
today about whether or not research supports that assumption--
but I would imagine that this was done in good will--that is,
to recognize and support some people who have a very, very
significant impairment, and it was probably done on the basis
of that good will and that notion that they are unique and
uniquely disabled and uniquely disadvantaged by their
impairment.
Mr. McCrery. Well, thank you for that answer. Have you
thought about the fact that blindness is easily--the disability
of blindness is easily ascertained, it is easily discovered, it
is easily provable, as opposed to some other forms of
disability that are more subjective in terms of medical
analysis? Is that possibly part of--
Dr. Daniels. There are some impairments that are very easy
to discern, even to the layman. For instance, I use a scooter
and that is fairly easy to discern. And people who have very
significant hearing impairments are very easy to discern. And
there are other impairments that are more difficult to
discern--heart condition, diabetes, et cetera.
I don't know if that would explain the difference in the
amount itself, or linking one to the retirement earnings test
and not another. But I imagine it was done on the basis of some
notion of good will and assistance to people who are obviously
in need.
Mr. McCrery. Do you support the difference? Do you think
that there is--would you recommend to us policymakers that we
maintain a difference in the earnings limit, so to speak, for
blind disabled and nonblind disabled?
Dr. Daniels. I think that the road you are going down now
is the most judicious, to listen to the constituencies and to
hear from people about this difference, and to have the GAO
look at the research.
I will not be in the same position to have gathered all
that information that you have. We have not taken, in the
Administration, a position on this, but you are certainly going
to hear from your customers, from people with disabilities of
various kinds, and from the GAO, and I think that is the way to
go. Take a look at it from all sides, and make up your own
mind.
Mr. McCrery. Thank you, Ms. Daniels.
Chairman Shaw. Mr. Portman.
Mr. Portman. Thank you, Mr. Chairman, and commend you for
what you did last year on the Ticket to Work, which was very
helpful, but I know you would like to do more to ensure that
all disincentives are removed to work.
Dr. Daniels, I was just listening to your response to Mr.
McCrery. I am not sure that I understand the Administration's
position, and looking at your testimony I wanted to ask a
question, if I could. I don't think you will need a lifeline
for this one.
Dr. Daniels. Thank you. My mother is standing by.
Mr. Portman. Okay. You can call or you can poll the
audience, but--[Laughter.]
Mr. Portman. This is sick, isn't it? We are all spending
our time watching these shows instead of watching C-SPAN and
these interesting hearings.
Does the Administration take a position with regard to
differential treatment? I know you say you haven't done some of
the research and so on, but in looking at your testimony, it
says ``Our commitment is to make ever effort to enrich the
lives of all people with disabilities and to help all those who
want to work to do so''.
And I just wonder, are you implying there that all people
with disability should be treated equally when it comes to
incentives to work and, if so, do you have any specific
suggestions for this Subcommittee as we grapple with this
issue? What is the Administration's position?
Dr. Daniels. Well, the Administration has no position on
this particular piece of legislation, but there is some
guidance, I think, that I can offer you in terms of thinking
about it.
You have asked the right questions, I think, of the GAO,
and I think your question of me, is this disparate treatment
fair? It is not necessarily fair to treat everyone alike. Some
people have greater need. And we recognize that in the SSI
program when people are able to work some, their check is
reduced $1.00 for every $2.00 that they earn, and that is a
recognition that some people can do more for themselves.
We don't think that ``identical'' is the same thing as
``fair''. You are about to evaluate whether or not this
disparate treatment is based on some rational facts about the
special circumstances of individuals who are blind. That makes
sense to me. And you will draw your own conclusions about that.
I think that the worst thing to do is to think that
``identical'' is the same thing as ``fair,'' and I don't think
it is.
Mr. Portman. Well, I appreciate that guidance. I think it
would be helpful if we could get a specific answer to this
legislation from the Administration because you all do have a
lot of research and resources, and have obviously the
responsibility of administering these programs.
I would just make the general comment that just as we have
run into the earnings limit issue with Social Security, ages 65
to 70, so we have run into it on this issue. And back home we
have a wonderful organization called the Clovernook Center for
the Blind, and they do a lot of work. They produce for the
Federal Government and for the private sector lots of material
including Braille editions of general readership magazines that
go around the country. And they have had a hard time keeping
and attracting blind and disabled employees because people
worry about how it will affect their Social Security Disability
benefits, which is very similar to what we all hear back home
on the earnings limit on Social Security.
And just last week, in fact, two constituents came to see
me, both of whom are active members of the American Council of
the Blind and are blind themselves, and talked about that in
very personal terms. They want to work, but they feel they
can't afford to.
So, I do think this is an issue that the Ticket to Work
helps a lot, but our work is not yet done. And, again, I think
it would be very helpful if the Administration could give us
some more specific guidance as we work through this. Thank you,
Mr. Chairman.
Chairman Shaw. Mr. Hulshof.
Mr. Hulshof. Thank you, Mr. Chairman. Dr. Daniels, welcome.
I want to make a point, and I think it is worth noting, that
individuals with disabilities can actually earn more than the
limits but then stay eligible, and the reason is that they can
subtract work expenses that are related to their disability in
determining their earnings subject to the limit, although this
sounds to me like an administrative nightmare.
I guess my question is, first of all, how many individuals
who are blind take advantage of these deductions to earn more
than the $1170 a month limit, do you know offhand?
Dr. Daniels. Actually, I do know, and I have it on a sheet
of paper here and I am going to take a look at it and answer
that question for you. But the blind work incentive deduction
is a little bit more liberal than the other, for the
impairment-related work expenses. The impairment-related work
expenses for nonblind have to be impairment-related whereas the
work expenses for individuals who are blind can be any work
expense. So, it can be a reader, or the care of a guide dog, or
special transportation, but it also can be union dues, or
uniforms, or any of the expenses of work can also be deducted.
So that is a more liberal standard than for the nonblind.
Hold on a second, I am going to look that up for you. It is
hard to compare apples and oranges here because we have work
incentives in the SSI program, work incentives in the
Disability Insurance program, and we have concurrent
beneficiaries, so you are right, it is a pretty complicated
picture.
But we have about 75 percent of blind DI individuals are
not posting any kinds of earnings and are probably not using
any of the work incentives, and about 13 percent of them are
posting earnings under $6,000 a year. Nine percent are posting
earnings at about between $6-12,000 a year, and 3 percent are
posting earnings over $12,000 a year. So, 75 percent of our
blind beneficiaries are not using the work incentives at all.
Mr. Hulshof. Does SSA ever determine that expenses are
``not reasonable'' and, if so, what happens then?
Dr. Daniels. Well, certainly, when they are not reasonable,
but we would then give an explanation to the beneficiary of why
an expense is not considered reasonable.
But we really do want to encourage people to tell us what
their expenses are so that we can assist them in getting the
maximum from the work incentives, and as good a start on that
employment track as we can help them do.
Mr. Hulshof. Do you have, maybe in the numbers in front of
you, how many people actually file for these work incentives? I
mean, you have told us how many qualify. Do you happen to have
those numbers, or can you get them to us later?
Dr. Daniels. Yes, we can get them to you for the record, as
best we can.
[The information follows:]
For work expenses for either DI or SSI beneficiaries, no
formal claim is filed that SSA would keep track of. These
issues come up in the ordinary course of claims development and
work reviews. We can deduct all, some, or none of the claimed
expenses, but we do not track these categories. Often, the
amount of expenses would be immaterial to the case, such as
when earnings are below SGA without considering expenses. In
any event, processing instructions indicate that the work
expense provisions should be liberally construed.
In December 1999, about 4,000 SSI recipients reduced their
countable earnings through the Blind Work Expense provision.
The average amount of the blind work expense was approximately
$250.
Mr. Hulshof. The other issue as we have been talking
about, in 1977 the separate substantial gainful activity limit
was established, and the new limit was increased annually for
the blind to reflect average wage growth, and because average
wages grow faster than prices, this SGA limit also has grown
faster than inflation. In contrast, the SGA limit for
individuals with other disabilities is not automatically
adjusted either for prices or wages, and as a result the SGA
limit for those who are not blind has fallen behind.
Now, I recognize that the Administration just increased
that limit from $500 to $700 a month last year. When was the
last increase prior to 1999, if you know, Dr. Daniels?
Dr. Daniels. Yes, I do know, it was in 1990. It was raised
from--the two most recent changes was from 1980 to 1990, it
went from $300 to $500. It was $300 in the entire decade of
1980. In 1990, it went to $500, and in 1999 to $700.
Mr. Hulshof. And do you anticipate any further increases
for those who are not blind?
Dr. Daniels. When we put out the regulation, the Notice of
Proposed Rulemaking for raising the SGA to $700, we asked
individuals for comments on all other aspects of SGA for
nonblind, and we received many, many comments. Those are under
consideration and analysis, at this time.
Mr. Hulshof. Thank you, Dr. Daniels. Thank you, Mr.
Chairman.
Mr. McCrery. Mr. Chairman, may I follow up just very
quickly?
Chairman Shaw. Yes, go ahead.
Mr. McCrery. Did the Administration make a cost estimate
when you increased it from $500 a month to $700 a month?
Dr. Daniels. Yes, we did.
Mr. McCrery. And what was that?
Dr. Daniels. I am going to have to look over here to my
colleagues because I have a number in mind, but I want to check
it.
We did make a cost estimate it was included in the
baseline, in OMB.
Mr. McCrery. Can you get for us maybe the analysis and show
us how much that cost was estimated to cost over, say, five
years or ten years?
Dr. Daniels. Okay. We certainly will, we will submit it for
the record.
[This information follows:]
[GRAPHIC] [TIFF OMITTED] T6686.001
Mr. McCrery. Thank you.
Chairman Shaw. Thank you, Dr. Daniels. We appreciate your
being here with us. As usual, you gave us a very open and very
clear view of your responsibility.
[The following questions submitted by Chairman Shaw, and
Dr. Daniels' responses, are as follows:]
1. About 100,000 individuals who are blind receive DI
benefits. About 12% earn more than $500 per month; only 1%
return to work each year. So if SGA was repealed for those who
are blind, no more than 12,000 and probably more like 1,000
people on the rolls would be helped. Is that a fair assessment?
How many individuals who are blind are currently working and
NOT receiving disability benefits? If SGA, were repealed, how
many individuals would be eligible for DI benefits? Is it fair
to say that repealing SGA would primarily help those who are
NOT now receiving disability benefits? Does that make sense,
given the DI program's financial prospects?
It is fair to say that removing the SGA limit for blind
individuals would have only a small program effect with respect
to current DI beneficiaries.The much more substantial program
effect is the entry onto the rolls of new beneficiaries.
It is difficult to estimate the number of blind individuals
who are currently working and not receiving DI benefits.
According to the testimony of the General Accounting Office,
about 30 percent of working-age blind individuals are employed.
We estimate that removing the SGA limit for blind
individuals would cause an additional 55,000 people to become
eligible for DI benefits, with 5-year costs of $2.6 billion and
long-term costs of 0.03 percent of taxable payroll, which would
have a distinct negative impact on long-term solvency. Almost
all of this would go to individuals not currently receiving DI
benefits. As to whether such a change should be considered, any
consideration of this and other program changes should be done
in the context of Social Security solvency legislation.
2. One of the work incentive provisions in current law is
the ability to subtract the value of impairment-related work
expenses from earnings before determining whether these
earnings are substantial gainful activity. How many SSDI
beneficiaries receive the benefit of this work incentive
provision? Of this number, how many are statutorily blind?
We do not track that data. We know from reports from our
field office employees that only a relatively small number of
DI beneficiaries use impairment-related work expenses to reduce
their earnings below SGA, too small a number to justify
building a special system to capture this information.
Chairman Shaw. We now have the next panel which I
inappropriately called up a few moments ago. Barbara Bovbjerg
is the Associate Director, Education, Workforce and Income
Security Issues, and we have her accompanied by Carol Petersen,
if the witnesses would take their seats. And I apologize again
for trying to put everybody on the same panel. That was not my
intention, it was my not looking at a few asterisks on the
schedule which separated the two panels. You may proceed.
STATEMENT OF BARBARA D. BOVBJERG, ASSOCIATE DIRECTOR,
EDUCATION, WORKFORCE AND INCOME SECURITY ISSUES, HEALTH,
EDUCATION AND HUMAN SERVICES DIVISION, U.S. GENERAL ACCOUNTING
OFFICE; ACCOMPANIED BY CAROL PETERSEN, ASSISTANT DIRECTOR,
EDUCATION, WORKFORCE AND INCOME SECURITY ISSUES; HEALTH,
EDUCATION AND HUMAN SERVICES DIVISION
Ms. Bovbjerg. Good morning, Mr. Chairman, Members of the
Subcommittee. I am Barbara Bovbjerg, from the GAO, and I am
happy to be here today with my colleague, Carol Petersen, to
discuss the Disability Insurance program's substantial gainful
activity level for the blind.
The DI program requires disabled applicants to demonstrate
they cannot earn more than the SGA both to enter DI and to
remain in the program. Since 1977, the SGA for the blind has
been higher than for those with other disabilities, and
consideration is being given to raising the SGA level further.
I would like today to focus on two aspects of this
question. First, to what extent the blind face different
employment circumstances than those with other disabilities;
and, second, the potential impact of raising or eliminating the
SGA for the blind on work effort, trust fund costs, and the DI
program overall. My testimony is based on prior work that we
have done on circumstances of blind beneficiaries and on our
overall body of work in the disability program.
First, the blind and barriers to employment. Proponents for
higher SGA levels for the blind have suggested three ways in
which the blind are at a greater disadvantage than other
disabled individuals--lower employment rates, lower wages when
they are employed, and higher work-related costs. They believe
that these relative disadvantages are so great that the SGA for
the blind should be higher to make the difficult search for
employment more attractive to blind beneficiaries.
There are few empirical studies that consider whether the
blind are indeed more disadvantaged than those with other
disabilities. And among those few studies, there is little to
suggest that the blind are unique among the disabled
population. My written statement presents the data we found,
and it suggests that many disabled individuals, blind and
nonblind, face barriers to obtaining well-paying jobs, and many
experience significant work-related costs.
I would like to turn now to the potential effects of
raising the SGA for the blind on work effort, cost to the
program and the trust fund, and on the nature of the program
itself.
Increasing the SGA may indeed motivate current blind
beneficiaries to seek and obtain work, and this should
represent a positive step toward increased integration with
society and the enhanced self-esteem associated with the work
experience. But raising the SGA would also make the DI program
more generous and thus more costly. This is because the number
of beneficiaries could be expected to rise. Some disabled
individuals already working would join or rejoin the rolls, and
those already on the rolls would retain eligibility longer than
would otherwise be the case.
As beneficiary rolls grow, DI costs would rise, and that is
worse than the projected financial outlook for the Social
Security trust funds. For example, if the SGA for the blind is
reset to today's retirement earnings limit of $17,000 a year--
and I say today knowing that we are about to change that--
Social Security actuaries estimate that it would cost the trust
funds $2.7 billion over the next ten years.
Although this worsens 75-year solvency projections for the
trust funds only relatively slightly, it still would worsen the
financial outlook in a system already facing a $3 trillion
actuarial deficit. Eliminating rather than raising the SGA
would, of course, have even greater financial impact. Actuaries
estimate that these costs would rise $6.8 billion over a ten-
year period.
Eliminating the SGA also has the potential to change the DI
program in fundamental ways. Historically, the program has
insured workers against reduced earnings due to impairment.
Without an SGA standard, DI benefits would be offered to blind
individuals regardless of their earnings. Although this measure
may encourage current beneficiaries who can work to work and
earn more, it would pay the same benefits to people who earn a
lot as to those who earn a little or nothing.
Breaking the connection between ability to work and
eligibility to receive DI benefits would represent a
fundamental change in the nation's Disability Insurance policy
and should be recognized as such.
In conclusion, raising the SGA for the blind could increase
work participation among blind beneficiaries, but would raise
program costs and could widen differences in the program's
treatment of the blind and the nonblind, even though both
groups face barriers to obtaining well paying jobs. Eliminating
the SGA for the blind would have these same effects, but more
broadly, and would fundamentally change the program.
There are a number of ways to approach incentives to work,
some of which are being tested as part of the Ticket to Work
and Work Incentives Improvement Act. Such other incentive
approaches also have the potential to increase work among
disabled individuals without altering the fundamental purpose
of the DI program structure and deserve consideration as well.
That concludes my statement, Mr. Chairman. Dr. Petersen and
I are available to answer any questions.
[The prepared statement follows:]
Statement of Barbara D. Bovbjerg, Associate Director, Education,
Workforce and Income Security Issues, Health, Education and Human
Services Division, U.S. General Accounting Office
Thank you for inviting me here today to discuss the
substantial gainful activity (SGA) level established for blind
beneficiaries of Social Security Disability Insurance (DI). The
DI program provides monthly cash benefits to workers who have
become severely disabled and to their dependents and survivors.
In addition, Medicare coverage is provided to DI beneficiaries
after they have received cash benefits for 24 months. In fiscal
year 1999, about 6.5 million beneficiaries received DI benefits
amounting to $50.4 billion. Of these, about 100,000 qualified
because of statutory blindness. \1\ The average benefit paid to
disabled workers was $734 a month in December 1999. In addition
to providing evidence establishing their medical impairment,
individuals must demonstrate that they are not earning above a
certain amount--known as the SGA level--in order to qualify for
and maintain eligibility for DI benefits.\2\ Since 1977, the
SGA levels have been higher for blind than for nonblind DI
beneficiaries, and until recently the level for the blind was
set equal to the earnings limit for Social Security retirees.
---------------------------------------------------------------------------
\1\ To meet the statutory definition of blindness for Social
Security purposes, a person must have either central visual acuity of
20/200 or less in the better eye with the use of a correcting lens or a
limitation in the fields of vision so that the widest diameter of the
visual field subtends an angle of 20 degrees or less.
\2\ Individuals with disabilities other than blindness must also
demonstrate an inability to engage in substantial gainful activity.
---------------------------------------------------------------------------
Today I would like to focus my remarks on (1) the
differences in employment circumstances affecting people with
blindness compared with those affecting people with other
disabilities and (2) the potential impact of changes in SGA
levels on the DI program and on the Social Security trust
funds. My testimony updates and expands on our prior work on
the circumstances of blind beneficiaries and on our body of
work examining the DI program and SGA levels.\3\
---------------------------------------------------------------------------
\3\ See DI Substantial Gainful Activity Levels (GAO/HEHS-96-109R,
Mar. 20, 1996). Other related GAO products are listed at the end of
this testimony.
---------------------------------------------------------------------------
In summary, higher SGA levels have been established for
blind beneficiaries primarily on the basis of the assumption
that certain adverse economic consequences associated with
blindness are unique. Few empirical studies have compared the
work-related experiences of blind individuals with those of
people who have other disabilities. However, the studies that
we reviewed showed many disabled individuals--blind and
nonblind--face adverse employment circumstances. Although
raising SGA levels for the blind--or even eliminating them--
could encourage more blind beneficiaries to work, such changes
would perpetuate differences in the treatment of blind and
nonblind beneficiaries and could slightly worsen the Social
Security trust funds' financial outlook. Moreover, eliminating
the SGA level, by removing the connection between benefit
eligibility determination and the inability to work, would
fundamentally alter the purpose of the DI program.
BACKGROUND
From its origin in 1956, the purpose of the DI program has
been to provide compensation for the reduced earnings of
individuals who, having worked long enough and recently enough
to become insured, have lost their ability to work. \4\ The
program is administered by the Social Security Administration
(SSA) and is funded through payroll deductions paid into a
trust fund by employers and workers (currently 1.8 percent of
payroll for DI).
---------------------------------------------------------------------------
\4\ The DI program was established under title II of the Social
Security Act
---------------------------------------------------------------------------
To qualify for benefits, an individual must have a
medically determinable physical or mental impairment that (1)
has lasted or is expected to last at least 1 year or result in
death and (2) prevents the individual from engaging in
substantial gainful activity.\5\ Individuals are considered to
be engaged in substantial gainful activity if they have
countable earnings at or above a certain dollar level. To
calculate countable earnings, SSA deducts from gross earnings
the cost of items that, because of the impairment, a person
needs to work (for example, attendant care services performed
in the work setting, wheelchairs, or Braille devices).\6\ In
addition to determining initial eligibility, the SGA test also
applies to determining continuing eligibility for benefits.
Beyond a trial work period during which DI beneficiaries are
allowed to keep any level of earnings, benefit payments are
terminated once SSA determines that a beneficiary's countable
earnings exceed the SGA level.
---------------------------------------------------------------------------
\5\ To qualify for benefits, individuals with blindness need only
show that they are not earning at the SGA level. Individuals with
disabilities other than blindness must also demonstrate an inability to
engage in substantial gainful activity.
\6\ Deductions can be made only if (1) the cost of the item or
service is paid by the person with the disability and (2) the person
has not been, and will not be, reimbursed for the expense.
---------------------------------------------------------------------------
The Social Security Act did not initially distinguish
between the SGA levels for blind and nonblind DI
beneficiaries.\7\ This was changed in 1977 when the Social
Security Financing Amendments (P.L. 95-216) set the SGA level
for individuals who are blind equal to the monthly earnings
limit set for Social Security retirees aged 65 to 69.\8\ This
link also meant that the SGA level for the blind would be
indexed to the average wage index (AWI), a measure of average
wages of all employees in the country. Linking the SGA level
for the blind to the retirement earnings limit meant that
whenever the limit was changed, the SGA level for the blind
would change to an equal amount.
---------------------------------------------------------------------------
\7\ SGA levels were first published in regulations in 1961 and at
that time were set at $100 a month of countable earnings.
\8\ The 1977 law did not affect SGA levels for nonblind DI
beneficiaries.
---------------------------------------------------------------------------
The provision for linking the blind SGA level to the
retirement earnings limit remained in effect until the Senior
Citizens' Right to Work Act of 1996 (P.L. 104-121) was enacted.
This act mandated a substantial increase in the monthly
earnings limits for Social Security retirees over a 5-year
period and removed the link between the retirement earnings
limit and the SGA level for the blind but retained the SGA
level that was in place at that time as well as the annual
indexing to the AWI. Currently, the SGA level for the blind is
$1,170 a month of countable earnings.
On March 1, 2000, the House passed H.R. 5, the Senior
Citizens' Freedom to Work Act of 2000, which, if enacted into
law, would eliminate the earnings limit for retirees between
the normal retirement age (currently age 65) and age 70.\9\ The
Senate passed its version of the bill on March 22, 2000.
Currently, recipients aged 65 to 69 can earn up to $17,000 a
year without having their benefits affected.\10\ For earnings
above this limit, Social Security benefits are reduced $1 for
every $3 in earnings. The application of this earnings test is
generally a deferral of benefit payments to a later time when
earnings cease or are lessened. Thus, future benefit levels may
be increased as a result of having benefits withheld under the
earnings limit. According to SSA's actuarial estimates,
eliminating the earnings limit for those reaching the normal
retirement age would increase Social Security costs over
approximately 20 years but would be negligible over a 75-year
period. H.R. 5 explicitly exempts blind DI beneficiaries from
the provision that would eliminate the earnings limit.
---------------------------------------------------------------------------
\9\ There is a different earnings limit, as well as a different
benefit reduction rate, for retirees aged 62 to 64.
\10\ The earnings limit does not apply to those over age 69, and it
is increased each year on the basis of indexing to average wages in the
economy.
---------------------------------------------------------------------------
For individuals who have disabilities other than blindness,
the Social Security Act gives the Commissioner of Social
Security the authority to prescribe the SGA level by
regulation. Over the years, SSA has increased the SGA level a
number of times, the latest increase occurring in July 1999
when the level for nonblind individuals was raised from $500 to
$700 a month of countable earnings. The SGA level for nonblind
beneficiaries is not indexed. The current SGA level for the
blind of $1,170 a month is about 67 percent greater than the
$700 level for people with disabilities other than blindness.
Under the current program, a DI beneficiary may earn any
amount for 9 months within a 60-month period and still receive
full cash and health benefits. At the end of this trial work
period, if a beneficiary's countable earnings exceed the SGA
level, cash benefits continue for an additional 3-month grace
period and then stop, causing a precipitous drop in monthly
income from full cash benefits to none. Such a drop in income
is a considerable disincentive to work. Indeed, less than 1
percent of DI beneficiaries return to work each year.
In addition to identifying this ``income cliff,'' our prior
work has identified other program design and implementation
weaknesses--such as limited referral to vocational
rehabilitation services and the eventual loss of medical
coverage after cash benefits end--that have been disincentives
to work. \11\ To help reduce such disincentives, the Congress
has, over the years, established various work incentive
provisions to safeguard cash and medical benefits while a
beneficiary tries to return to work, and recently, SSA has
begun to place greater emphasis on assisting beneficiaries in
returning to work.
---------------------------------------------------------------------------
\11\ See SSA Disability: Program Redesign Necessary to Encourage
Return to Work (GAO/HEHS-96-62, Apr. 24, 1996).
---------------------------------------------------------------------------
In addition, the Ticket to Work and Work Incentives
Improvement Act of 1999 (P.L. 106-170) is expected to enhance
certain work incentives for people with disabilities through
such measures as expanding eligibility for Medicare, creating a
Ticket to Work voucher program that will allow people with
disabilities a greater choice of vocational rehabilitation and
employment service providers, and establishing new
demonstration projects for the working disabled. This increased
focus on work reflects a shift in societal attitudes, as
embodied in the Americans With Disabilities Act, toward goals
of economic self-sufficiency and the right of people with
disabilities to full participation in society. In addition,
medical advances, new technologies, and changes in the nature
of work now provide people with disabilities more opportunities
to work than ever before.
MANY DISABLED WORKERS FACE ADVERSE EMPLOYMENT CIRCUMSTANCES
Proponents of a higher SGA level for the blind believe that
blind individuals are at a greater disadvantage, particularly
from an economic standpoint, than individuals with other
disabilities. According to these proponents, the disadvantages
facing blind people include (1) greater employment
discrimination resulting in low employment rates; (2) greater
likelihood that when able to find work, it will be in a low-
wage job; and (3) extra costs for supportive services or
equipment that are necessary for the blind to find and maintain
employment and conduct other daily activities.
Few empirical studies rigorously compare the experience of
blind individuals in terms of employment, earnings, and work-
related expenses with the experience of those who have other
disabilities. The readily available studies that we reviewed
relied on data from the mid-1990s. These studies indicate that
many disabled workers--blind and nonblind--face adverse
employment circumstances and high job-related expenses.
Estimates from the 1997 Disability Statistics Report,
published by the National Institute on Disability and
Rehabilitation Research, show that although the 1994 labor
force participation rates for adults with visual impairments
aged 18 to 64 were low in comparison with the rates for some
impairments, these rates were higher than the labor force
participation rates for those with other impairments, such as
mental illness or emphysema (see table 1).\12\
---------------------------------------------------------------------------
\12\ L. Trupin and others, Trends in Labor Force Participation
Among Persons with Disabilities, 1983-1994, Disability Statistics
Report (Washington, D.C.: U.S. Department of Education, National
Institute on Disability and Rehabilitation Research, 1997). This report
is based on the most recent available data from the National Health
Interview Survey (NHIS). The NHIS, conducted annually by the Census
Bureau for the National Center for Health Statistics, is a cross-
sectional survey of the civilian noninstitutionalized population of the
United States. The labor force participation rate is the primary
measure in labor market analysis. It is a measure of everyone in the
labor force, including people who have a job, are on temporary layoff,
or are looking for work.
Table 1: Labor Force Participation Rates Across Various Impairment Types
------------------------------------------------------------------------
Impairment type Participation rate (percentage)
------------------------------------------------------------------------
No disability...................... 83.0
Deafness or hearing impairment in 80.0
one ear only......................
Orthopedic impairments of lower 69.4
extremity.........................
Blindness or visual impairment in 69.0
one eye...........................
Orthopedic impairments of shoulder 68.6
and/or upper extremities..........
Orthopedic impairments of back or 62.5
neck..............................
Intervertebral disc disorders...... 59.8
Visual impairment in both eyes..... 59.8
Orthopedic impairment of hip or 59.3
pelvis............................
Hearing impairment in both ears.... 58.7
Amyothrophic lateral sclerosis..... 50.1
Malignant neoplasm of female breast 46.4
Toxic poisoning and other adverse 46.2
effects...........................
Osteoarthrosis and allied disorders 45.2
Malignant neoplasm of respiratory 45.0
and intrathoracic organs..........
Rheumatoid arthritis and other 44.0
inflammatory polyarthropathies....
Heart disease, excluding 41.5
hypertension......................
Hypertensive disease............... 38.2
Multiple sclerosis................. 36.9
Absence or loss, lower extremity... 35.0
Mental retardation/Down syndrome... 33.5
Affective psychoses................ 30.9
Chronic liver disease and cirrhosis 30.7
Cerebral palsy..................... 30.7
Blindness in both eyes............. 28.9
Mental illness..................... 27.2
Emphysema.......................... 27.1
Depressive disorders............... 25.4
Cerebrovascular disease............ 23.3
Nephritis, nephrotic syndrome, and 20.1
nephrosis.........................
Schizophrenic psychoses............ 11.9
------------------------------------------------------------------------
Source: 1994 NHIS data, reported by National Institute on Disability and
Rehabilitation Research.
Data patterns from the 1994-95 Survey of Income and Program
Participation (SIPP) are consistent with this finding.\13\ The
SIPP provides estimates of employment rates and earnings levels
of individuals disaggregated by various functional limitations.
As shown in table 2, employment rates and earnings of adults
(aged 21 to 64) with severe functional limitations were
significantly lower than those for adults with no disability.
Adults with limitations involving sight had a somewhat higher
employment rate than those with limitations involving lifting,
walking, or climbing stairs but had a significantly lower
employment rate than for those unable to hear normal
conversations. Monthly earnings levels of individuals with
severe sight limitations were about the same or slightly lower
than the monthly earnings for individuals with severe
limitations in walking, lifting, and hearing.
---------------------------------------------------------------------------
\13\ John M. McNeil, Americans With Disabilities: 1994-95, Current
Population Reports, Household Economic Studies, P70-61 (Washington,
D.C.: U.S. Department of Commerce, Economics and Statistics
Administration, Bureau of the Census, 1997). The SIPP, an ongoing study
by the Bureau of the Census of the economic well-being of the civilian
noninstitutionalized population, is a nationally representative sample
of approximately 30,000 households. Information about disability was
collected during the period October 1994-January 1995, which represents
the most current available SIPP data regarding employment and earnings
of people with disabilities.
Table 2: Employment Rates and Earnings Across Various Functional Limitations
----------------------------------------------------------------------------------------------------------------
Functional limitation Percentage employed Earnings
----------------------------------------------------------------------------------------------------------------
No disability......................... 82.1 $2,153
Unable to hear normal conversation.... 59.7 2,047
Unable to see words and letters....... 30.8 1,252
Unable to lift and carry 10 pounds.... 27.0 1,536
Unable to climb stairs without resting 25.5 1,257
Unable to walk three city blocks...... 22.5 1,346
----------------------------------------------------------------------------------------------------------------
Source: 1994-95 SIPP data, Census Bureau
Other studies conducted by researchers in academic
institutions and by organizations representing the disabled
have provided some information on the work-related costs faced
by those with disabilities. While comparisons of results across
these studies is difficult given the varying focus,
methodology, and measures used in each study, the results, in
general, indicate that individuals with disabilities other than
blindness also incur high work-related costs.
For example, the American Foundation for the Blind and
Mississippi State University found that legally blind
individuals spent an average of $884 per year on readers, $57
per year on tapes related to reading, $50 per year on
recruiting new readers, $469 per year on work-based adaptive
devices, and $150 per year on mobility aids. Also, over 50
percent of the legally blind spent less than $500 for devices
used at work.\14\ In comparison, the literature we reviewed and
researchers we contacted indicate that people with severe
mental illness may also require many work-related services,
including on-the-job coaching, money management assistance, and
mental health services. Cost estimates ranged from $1,400 to
$3,600 annually for supportive employment services and $3,200
to $7,000 annually for mental health services.\15\ In addition,
researchers have noted that people with hearing impairments
incur costs for interpreter services, telecommunications
devices for the deaf, answering machines and ancillary
services, retrofitting of items that use sound to operate, and
the care of hearing dogs. Researchers have pointed out that
most of these items require significant initial and continuing
investment.\16\
---------------------------------------------------------------------------
\14\ C. Kirchner and others, Lifestyles of Employed Legally Blind
People: A Study of Expenditures and Time Use, Technical Report
(Mississippi State, Miss.: Mississippi State University, Rehabilitation
Research and Training Center on Blindness and Low Vision, 1992).
\15\ G. Bond and others, ``Toward a Framework for Evaluating Cost
and Benefits of Psychiatric Rehabilitation: Three Case Examples,''
Journal of Vocational Rehabilitation, Vol. 5 (1995).
\16\ W.A. Welsh, ``The Economic Impact of Deafness,'' Journal of
the American Deafness and Rehabilitation Association, Vol. 24, No. 3
and 4 (Jan./Apr., 1991).
INCREASING OR ELIMINATING SGA LEVELS COULD INCREASE WORK BUT
---------------------------------------------------------------------------
WOULD HAVE COSTS
Recently, proposals have been put forth that would either
raise or eliminate the SGA level for the blind. In particular,
proposals raising the SGA level for blind individuals have been
focused on restoring the link between this level and the
retirement earnings limit that existed from 1977 to 1996.\17\
Restoring this link would allow working beneficiaries to keep
more of their benefits, thereby reducing a significant
disincentive to work. However, SSA estimates of the impact of
these possible changes indicate that they all would have some
negative effect on DI costs and the actuarial balance of the
Old-Age, Survivors, and Disability Insurance (OASDI) trust
funds. Moreover, if enacted, the proposals to eliminate the SGA
requirement, by removing the connection between benefit
eligibility determination and the inability to work, would
fundamentally alter the purpose of the DI program.
---------------------------------------------------------------------------
\17\ S. 285 and H.R. 1601, introduced on January 21, 1999, and
April 28, 1999, respectively, both propose to ``restore the link
between the maximum amount of earnings by blind individuals permitted
without demonstrating ability to engage in substantial gainful activity
and the exempt amount permitted in determining excess earnings under
the earnings test.''
Increasing or Eliminating the Blind SGA Level Could Increase
---------------------------------------------------------------------------
Work Effort but Would Raise Program Costs
Under the current DI program, earning even one dollar above
the SGA level for a sustained period results in loss of DI cash
income and Medicare benefits. The prospect of losing cash and
health benefits can reduce motivation to work, especially when
low-wage jobs are the likely outcome. Increasing or eliminating
the SGA level for the blind would reduce this disincentive to
work and thus could result in more work effort by blind
beneficiaries. However, by making the program more generous,
this change would also increase the number of beneficiaries
through the effects of both increased entry to and decreased
exit from the program. Some working individuals not currently
on the DI rolls would be newly eligible to enter the program,
and those already on the rolls would be able to increase their
work and earnings without losing their eligibility and thus
would not exit the program.
The extent to which these increased entry and decreased
exit effects occur will affect DI benefit costs and OASDI trust
fund balances. SSA's Office of the Actuary has estimated the
financial impact of several options for increasing or
eliminating the SGA level for the blind. Ten-year estimates of
increased DI benefit payments range from $2.7 billion, if the
SGA level for the blind is set equal to the current-law
earnings limit for retirees, to $6.8 billion, if the SGA level
for the blind is completely eliminated.\18\
---------------------------------------------------------------------------
\18\ The short-range estimates cover the period 2000-09.
---------------------------------------------------------------------------
Table 3 shows that increasing the SGA level for the blind
also would have varying effects on the OASDI actuarial balance,
depending upon the proposed option.\19\ In discussing these
proposed increases, it is important to view their effect on
trust fund costs within the context of an already large Social
Security shortfall. Under current SSA actuarial projections,
the OASDI trust funds will be exhausted in 2034, with the Old-
Age and Survivors Insurance trust fund being depleted in 2036
and the DI trust fund being depleted in 2020.\20\ Over a 75-
year period, the OASDI deficit is currently estimated to be
2.07 percent of taxable payroll--approximately $3 trillion.
---------------------------------------------------------------------------
\19\ Although the DI trust fund is affected by changes in SGA
levels, SSA only estimated the effects on the combined OASDI trust
funds.
\20\ The combined OASDI trust funds will be in cash surplus until
2014. At that point, the trust funds will start redeeming some of their
assets to obtain the funds necessary to pay benefits, and expenditures
will begin to exceed revenues. By 2034, the trust funds will be
exhausted; that is, OASDI will meet only 71 percent of its benefit
obligations.
---------------------------------------------------------------------------
Setting the blind SGA level equal to the current-law
earnings limit for retirees ($1,416.67 per month) \21\ would
have a negligible effect, less than 0.005 percent of taxable
payroll,\22\ on the OASDI actuarial balance. However, other
options for increasing or eliminating the SGA level for the
blind could reduce the actuarial balance, up to .01 and .03
percent of taxable payroll. Although these proposed increases
would have a relatively small impact on the actuarial balance,
the trust fund shortfall would be exacerbated under any
increase to the SGA level.
---------------------------------------------------------------------------
\21\ This earnings limit refers to that set for Social Security
retirees aged 65 to 69.
\22\ Taxable payroll is the amount of wages or self-employment
income that is subject to the Social Security tax. For long-range
forecasting, Social Security's income and costs are expressed as a
percentage of taxable payroll. Measuring the program's income and outgo
over long periods (75 years) by describing what portion of taxable
earnings they represent is more meaningful than using dollar amounts,
because the value of the dollar changes over time.
Table 3: Estimated Change in the OASDI Actuarial Balance as a Result of Changes in the Blind SGA Level
----------------------------------------------------------------------------------------------------------------
Impact on OASDI actuarial balance
SGA option SGA level (as a percentage of taxable
payroll)
----------------------------------------------------------------------------------------------------------------
Set the SGA level for blind Beginning in 2000, increase the SGA Less than -0.005
individuals equal to the 2000 level from $1,170 to $1,416.67, and
earnings limit for retirees,a and index thereafter
index thereafter.....................
Set the SGA level for blind Beginning in 2000, increase the SGA -0.01
individuals equal to the 2000 level from $1,170 to $1,416.67,
earnings limit for retirees,a then raise the SGA level through
allowing it to rise to the 2002 2002 to $2,500, and index
limit, and index thereafter.......... thereafter
Eliminate the SGA level............... Permit blind individuals to earn -0.03
any amount and still retain full DI
benefits
----------------------------------------------------------------------------------------------------------------
Note: Although the DI actuarial balance is affected by changes in SGA levels, SSA estimated the effect on only
the OASDI actuarial balance.
a This earnings limit refers to that set for Social Security retirees aged 65 to 69.
Source: SSA Office of the Chief Actuary.
Some advocacy and interest groups representing people with
disabilities other than blindness have proposed establishing a
uniform SGA level for both blind and nonblind individuals.
Because relatively few DI beneficiaries are blind, the DI
benefit cost of raising or eliminating the SGA level for the
nonblind would be even higher than it would be for the blind,
although DI benefit cost estimates for either of these changes
were not available from SSA at the time of our review.
However, SSA has estimated the financial impact on the
OASDI actuarial balance of various options affecting the
nonblind SGA level. Changes in the nonblind SGA level would
have greater adverse effects on the OASDI trust funds than
would changes in the blind SGA level. For example, table 4
shows that raising the current nonblind SGA level of $700 a
month to that of the blind SGA level of $1,170 a month would
significantly affect the OASDI actuarial balance. These effects
would be even greater if the SGA level for the nonblind were
set equal to the current-law earnings limit for retirees or
were completely eliminated. Such changes would represent a
significant worsening of an already dire situation.
Table 4: Estimated Change in the OASDI Actuarial Balance as a Result of Changes in the Nonblind SGA Level
----------------------------------------------------------------------------------------------------------------
Impact on OASDI actuarial balance
SGA option SGA level (as a percentage of taxable
payroll)
----------------------------------------------------------------------------------------------------------------
Set the SGA level for nonblind Beginning in 2000, increase the SGA -0.09
individuals equal to the current SGA level from $700 to $1,170, and
level for blind individuals.......... index thereafter
Set the SGA level for nonblind Beginning in 2000, increase the SGA -0.15
individuals equal to the 2000 level from $700 to $1,416.67, and
earnings limit for retirees,a and index thereafter
index thereafter.....................
Set the SGA level for nonblind -0.44
individuals equal to the 2000
earnings limit for retirees,a
allowing it to rise to the 2002
limit, and index thereafter.
Beginning in 2000, increase the SGA
level from $700 to $1,416.67, then
raise the SGA level through 2002 to
$2,500, and index thereafter.........
Eliminate the SGA level............... Permit nonblind individuals to earn Not estimated b
any amount and still retain full DI
benefits
----------------------------------------------------------------------------------------------------------------
Note: Although the DI actuarial balance is affected by changes in SGA levels, SSA estimated the effect on only
the OASDI actuarial balance.
a This earnings limit refers to that set for Social Security retirees aged 65 to 69.
b Although not estimated, eliminating the nonblind SGA level would have the greatest adverse effect on the OASDI
actuarial balance.
Source: SSA Office of the Chief Actuary.
Proposals to Eliminate the SGA Level Would Alter the
Fundamental Role of the DI Program
Elimination of SGA levels for blind or other disabled
individuals would fundamentally alter the purpose of the DI
program. The DI program's historic role of providing
compensation for reduced earnings due to a disability and the
program's emerging role of facilitating severely disabled
individuals in their return-to-work efforts are both based on
the concept of assisting individuals whose impairments have
adversely affected their work capabilities. The very definition
of disability includes the requirement that a person be unable
to perform substantial work, and the purpose of the SGA level
is to determine if, regardless of one's medical condition, a
person demonstrates by working that he or she is not in fact
work-disabled. Without an SGA standard, cash benefits would be
offered to individuals incurring a physical or mental
disability regardless of their earnings. Removing the
connection between benefit eligibility determination and the
inability to work would fundamentally alter the program's
emphasis.
CONCLUSIONS
Current proposals ranging from increasing the SGA level for
the blind to eliminating it completely would have the likely
effect of increasing beneficiaries' work effort but would raise
program costs and could widen the differences in the program's
treatment of blind and nonblind beneficiaries, even though both
groups face adverse employment circumstances. Moreover, raising
the SGA level for the blind could result in further calls to
increase the SGA level for nonblind beneficiaries, leading to
significantly higher program costs and adverse effects on trust
fund solvency. In addition, eliminating the SGA level would
fundamentally alter the purpose of the DI program. Other
changes to the work incentives--some of which are being
implemented or will be tested by SSA as a result of the Ticket
to Work and Work Incentives Improvement Act of 1999--are likely
to increase work without fundamentally changing the nature of
the DI program.
Mr. Chairman, this concludes my prepared statement. At this
time, I will be happy to answer any questions you or other
Members of the Subcommittee may have.
CONTACT AND ACKNOWLEDGMENT
For information regarding this testimony, please contact
Barbara Bovbjerg at (202) 512-7215 or [email protected].
Individuals making key contributions to this testimony include
Carol Dawn Petersen, Mark Trapani, Gretta L. Goodwin, and
Michael J. Collins.
RELATED GAO PRODUCTS
Social Security Disability: Multiple Factors Affect Return to
Work (GAO/T-HEHS-99-82, Mar. 11, 1999).
Social Security Disability Insurance: Factors Affecting
Beneficiaries' Return to Work (GAO/T-HEHS-98-230, July 29,
1998).
Social Security Disability Insurance: Multiple Factors Affect
Beneficiaries' Ability to Return to Work (GAO/HEHS-98-39, Jan.
12, 1998).
Social Security Disability: Improving Return-to-Work Outcomes
Important, but Trade-Offs and Challenges Exist (GAO/T-HEHS-97-
186, July 23, 1997).
Social Security: Disability Programs Lag in Promoting Return to
Work (GAO/HEHS-97-46, Mar. 17, 1997).
SSA Disability: Return-to-Work Strategies From Other Systems
May Improve Federal Programs (GAO/HEHS-96-133, July 11, 1996).
Social Security: Disability Programs Lag in Promoting Return to
Work (GAO/HEHS-96-62, June 5, 1996).
SSA Disability: Program Redesign Necessary to Encourage Return
to Work (GAO/HEHS-96-62, Apr. 24, 1996).
Chairman Shaw. Ms. Petersen, do you have a statement?
Dr. Petersen. No, I don't.
Chairman Shaw. Mr. Matsui.
Mr. Matsui. Thank you, Mr. Chairman. I want to thank you
for your testimony, Ms. Bovbjerg, for it is very clear and
precise and I think pretty much lays it out.
And I know that you probably don't want to make any
conclusions here, but are you kind of concluding that for us to
really do something, we have to really deal with the fact that
maybe we need a comprehensive solution to the Social Security
problem; otherwise, we make the Social Security problem worse
before we make it better?
Ms. Bovbjerg. Well, I acknowledge that the cost would be
small, but it is going in the wrong direction if you are trying
to deal with this $3 trillion problem.
Mr. Matsui. I am not suggesting the cost is so small we
should just do it, but I am just saying that, frankly, the
way--I think the way we structured our debate--both parties
have structured our debate in terms of not tampering with the
Social Security surplus, and obviously the on-budget surplus
can be used, but we certainly don't intend to move SSI
disability and take from that at this moment, anyway. We are
left in the position of having to deal with this
comprehensively. Is that kind of where we are?
Ms. Bovbjerg. I think that is a good summary, yes.
Mr. Matsui. In terms of the actual increase in employment
for many of the disabled if we do raise the earnings limit, do
we get credit for that at all in terms of the budgetary impacts
and others?
Ms. Bovbjerg. I am not sure that it would score, and I
can't speak to that, you would have to ask my colleagues at the
Congressional Budget Office.
Mr. Matsui. I doubt it would score, that is--
Ms. Bovbjerg. You know that there would be a net effect
that some people would work more if the SGA were higher or
eliminated, who are currently on the rolls, but there are other
people who are not currently on the rolls because they work,
who would work less because they would then get benefits plus
whatever they were earning.
Mr. Matsui. Well, I want to thank you for your testimony.
As I said, I think you have laid it out very well. It is a
decision that we have to make and, obviously, we are kind of
caught in a dilemma right now, all of us are.
Ms. Bovbjerg. If we can provide any help, we will.
Mr. Matsui. I appreciate that. Thank you.
Chairman Shaw. Mr. Collins?
Mr. Collins. No questions.
Chairman Shaw. Mr. McCrery.
Mr. McCrery. Would you pronounce your name for me?
Ms. Bovbjerg. It is a hard one, it is ``Boberg'', like
``iceberg''.
Mr. McCrery. Thank you. I have other questions.
Ms. Bovbjerg. I am glad you asked one I could answer.
Mr. McCrery. You said in your testimony that if we were to
do away with the SGA limit for the blind, that by removing the
connection between eligibility and the inability to work would
fundamentally alter the purpose of the disability program. I
agree with you. But I would like for you to expound on that.
How would it fundamentally alter the purpose of the disability
program?
Ms. Bovbjerg. Well, first, it would sever the linkage
between eligibility and inability to work--that is, to engage
in substantial gainful activity. This is a linkage that is
intrinsic to the current program. Eligibility for benefits at
that point would be determined solely on a medical or
functional basis. Everyone meeting those criteria would receive
benefits, regardless of how much they work and how much they
earn. That removes the concept of disability insurance from the
disability program by doing that, and makes it more of a
payment for physical impairment. That is something the Congress
could decide to do, but as Dr. Daniels stated, I think that is
such a significant policy change that certainly we would want
to know more about the implications of that on finance and
disability policy.
Mr. McCrery. In other words, if we were to do away with any
kind of earnings limitation, it would undermine the original
purpose of the disability program.
Ms. Bovbjerg. Yes, sir.
Mr. McCrery. Can you state for us your impression of what
the original purpose of the disability program was?
Ms. Bovbjerg. Well, I can, and I hope that Carol will chime
in if I don't get everything here, but the Disability program
is to insure people who become disabled--who have been in the
workforce, who become disabled-against an inability to--and I
hate to keep using these words--to engage in substantial
gainful activity or an inability to support themselves in some
way that we have defined.
Mr. McCrery. So, in other words, it was not the Disability
program under Social Security--was not intended to simply
provide a payment to somebody who becomes disabled, it was to
provide a safety net, if you will, for income that if a person
is so disabled that he can't work or that his work is very
limited, then we want to provide some income so that person can
provide food and shelter and so forth, is that correct?
Ms. Bovbjerg. That is right, and I think that there are
statements made by members of Congress at the time that the
Disability law was passed that say that very explicitly, that
we understand that this means that only people with impairments
who cannot work will get benefits. That was made very clear.
Mr. McCrery. Well, Mr. Chairman, I agree with the
analysis--Ms. Bovbjerg--and I think it would fundamentally
alter the definition and the purpose of the Disability program
if we were to simply do away with any earnings limitation at
all, and to do that for the blind disabled may not cost that
much to the Federal fisc, but again we get to this question of
what would be the rationale, the policy rationale, for not
doing the same thing for other categories of disabled, and if
we do it for all then it is going to be a huge cost and it
would not serve the same purpose that was originally intended
by the Congress when this program was created.
So, I think that is a fundamental question that the GAO at
least has answered correctly, and I think this Subcommittee and
full Committee and full Congress ought to answer the same way.
Thank you.
Chairman Shaw. Ms. Bovbjerg, did you touch on the effect
that his question would have on the trust fund?
Ms. Bovbjerg. Well, I can tell you that we have received
from the actuary information that eliminating the SGA for the
blind would reduce--would have an impact, an actuarial impact,
the 75-year impact of .03 percent of taxable payroll, which is
about $40 billion over 75 years. $40 billion even in the
context of $3 trillion is still significant.
Chairman Shaw. If you could address that same question as
to what effect it would have on the date that the trust fund
runs negative. Now I think it is 2006 on the disability side.
Ms. Bovbjerg. We can get that.
Chairman. Shaw. If you could supply that for the Committee,
that is something that I think is a concern of everyone on the
Committee. Mr. Hulshof.
Mr. Hulshof. Thanks, Mr. Chairman. Ms. Bovbjerg, on page 4
of your written testimony and in your oral statement, you talk
about the disadvantages that blind people face according to the
proponents, and you mentioned that there are really few
empirical studies that rigorously compare the experiences of
blind individuals as compared with the experience of others.
And I have read your synopsis of the 1997 Disability Statistics
Report. I know Mississippi State also has a published report.
Are there empirical studies currently being conducted that
could rigorously take a look at this to determine, that you are
aware of?
Dr. Petersen. In the short period of time we had to prepare
for this testimony, these were the studies that we could
identify, and we could not find any systematic studies looking
at costs that exist to date.
Mr. Hulshof. Could you just briefly--I know your time was
limited in your five minutes, but could you maybe expound on
what the studies--I mean, I have read this--but could you just
summarize for me what at least these studies indicate regarding
the blind versus nonblind?
Ms. Bovbjerg. Well, we have three pieces that we have
brought into the testimony, and some of this is from work that
we did in 1996 on some of these same issues--one involved labor
participation rates, another is employment rates and wages, and
another piece is on work-related costs. And what you see there
is there are differences among impairments, but that really it
seemed to us that the point was that different impairments have
tremendously adverse employment circumstances. This is not
something that is unique to the blind.
And we want to emphasize that we are not saying it is easy
to be disabled and get a job, that is not what we are saying,
but we are saying that we have not found evidence that the
blind are unique in this regard.
Mr. Hulshof. Regarding those work-related costs, whether
for the blind or for those individuals with other disabilities,
are they most often borne by the worker? Are they borne by the
employer? I mean, how are those costs actually--who bears the
brunt of those costs?
Dr. Petersen. It varies. Some can be borne by the employer,
other costs are borne by the individuals themselves.
Mr. Hulshof. I think that is all I have. Thank you, Mr.
Chairman.
Chairman Shaw. Thank you very much. We appreciate your
being with us. If you could supply us with the information I
asked you about the trust fund, I would greatly appreciate it.
It would add a lot to the discussion. Thank you.
[Questions submitted by Chairman Shaw, and Ms. Bovbjerg's
answers, follow:]
Barbara Bovbjerg, General Accounting Office, Response to Questions for
the Record
1. Could you elaborate on the types of adverse
circumstances faced in today's society by individuals with
disabilities?
Research has shown that many disabled individuals-blind and
nonblind-face a number of adverse employment circumstances when
attempting to return to work. First, employers may be reluctant
to hire individuals with disabilities. Although the Americans
with Disabilities Act prohibits employment discrimination
against the disabled, there is still a stigma associated with
disability that may influence employers. This stigma may be
related to the misconception that a disabling impairment always
adversely affects the individual's productivity. Another cause
of employment discrimination may arise from the fact that a
disabled employee may require workplace accommodations, which
the employer may be unwilling to provide.
Second, for those individuals who do seek employment, the
number and type of jobs available may be limited due to the
disabling condition. Sometimes a disabling condition will lower
a worker's productivity when he or she is unable to perform the
same essential tasks of the job as before the disability. This
decreased productivity may limit the pool of available jobs to
those that require less skill and thus provide lower wages.
Finally, disabled workers incur costs that a non-disabled
worker does not incur for supportive devices, equipment, and
other work-related services necessary for employment. Examples
of these costs include readers and mobility aids for the blind,
mental health services for people with severe mental illness,
and interpreter services and hearing dogs for the deaf. Most of
this assistance requires significant initial and continuing
investment.
2. What proportion of beneficiaries work and, among those,
what proportion approach substantial gainful activity (SGA)
limits?
The Social Security Administration (SSA) has estimated that
one half of one percent of all beneficiaries leave the program
each year because of work, but this figure does not include
beneficiaries who work but do not earn enough to be terminated
from the program. According to agency officials we interviewed,
SSA is unable to accurately determine the total number of
disabled beneficiaries who work. Furthermore, SSA does not have
the capability to generate a reliable and valid estimate of the
number of disabled beneficiaries who work because the agency
data systems cannot distinguish a beneficiary terminated due to
a medical improvement from one who is terminated because of
work. In addition, an agency official told us that SSA's data
systems cannot distinguish work-related earnings from other
disability-related payments.
In addition to being unable to accurately determine the
number of disabled beneficiaries who work, SSA is unable to
accurately determine how many working beneficiaries have
earnings that approach the SGA limit. Because an individual can
earn any amount in a month without losing benefits when he or
she is in a trial work period, SSA does not track the
individual's earnings during this period. Once the individual
finishes the trial work period, SSA verifies earnings and if
the individual is earning above SGA then benefits continue for
a three-month grace period and then cease. If an individual has
monthly earnings below SGA at the end of the trial work period,
then SSA assumes his or her earnings remain below SGA until the
individual reports this information or if the agency's data
systems identify earnings above the SGA limit.
Although the agency's data systems can identify earnings
above the SGA level, there are some limitations associated with
this process. Some income classified as earnings may not be
from work. In addition, earnings are only reported on a yearly
basis, so SSA's data systems will only catch those individuals
who earn 12 times the SGA level, which is stated in monthly
terms. Therefore, beyond the trial work period, it is possible
for an individual to earn above the SGA level for some months,
but still retain benefits as long as yearly earnings are less
than 12 times the SGA level. An agency official told us that
there is no computerized method to identify earnings on a
monthly basis.
3. Is raising the SGA limits the right public policy?
Raising the SGA limits for disabled beneficiaries would
reduce disincentives to work and could result in greater work
effort by beneficiaries. However, as we mentioned in our
testimony of March 23, 2000, by making the program more
generous, this change would also increase the number of
beneficiaries through the effects of both increased entry to
and decreased exit from the program. Some working individuals
not currently on the Disability Insurance (DI) rolls would be
newly eligible to enter the program, and those already on the
rolls would be able to increase their work and earnings without
losing their eligibility and thus would not exit the program.
The extent to which these increased entry and decreased
exit effects occur will affect DI benefit costs and Social
Security trust fund balances. SSA's Office of the Actuary has
estimated that raising the SGA limit for the blind to the
current-law earnings limit for retirees is estimated to
increase DI benefit payments by $2.7 billion over a ten-year
period. Since relatively few DI beneficiaries are blind, the DI
benefit cost of raising the SGA limit for nonblind
beneficiaries would be even higher. Raising the SGA limit for
all DI beneficiaries would lead to significantly higher program
costs and adverse effects on trust fund solvency.
Whether raising the SGA limit represents good policy goes
beyond the financial considerations. Fundamental policy
weaknesses in the DI program continue to persist. As we have
reported in the past, these weaknesses include an eligibility
determination process that concentrates on applicants'
incapacities, an ``all-or-nothing'' benefits structure, and
return-to-work services offered only after a lengthy
determination process. To address these policy weaknesses, we
continue to believe--as we recommended in 1996--that SSA should
place greater priority on helping disabled beneficiaries return
to work. We also recommended that the agency develop a
comprehensive strategy to achieve this goal. While SSA has
taken actions that place a greater emphasis on return to work,
it has yet to adopt an overall strategy for implementing a new
approach.
In developing a return-to-work strategy, SSA can draw upon
the experiences of other systems to identify elements of a new
federal disability system that could help each individual
realize his or her productive potential without jeopardizing
the availability of benefits for people who cannot work. Having
identified these elements, SSA would then be in a position to
determine the legislative and regulatory changes needed to test
and evaluate the effectiveness of these practices in the
federal disability system. After obtaining this information,
policymakers will be in a position to determine whether raising
the SGA is good public policy.
Chairman Shaw. The next panel we have, includes Ms. Brenda
Gillis, a Social Security Beneficiary, and she is from Stuart,
Florida, which is just a few miles north of my district; Joanne
Wilson, who is the Director of the Louisiana Center for the
Blind; Dr. Brenda Cavanaugh, Research Director for the
Rehabilitation Research and Training Center on Blindness and
Low Vision, of Mississippi State University; James Gashel,
Director of Governmental Affairs, National Federation of the
Blind, from Baltimore, Maryland.
Mr. McCrery. Mr. Chairman, while our panelists are begin
seated, if I might take just a minute to introduce Joanne
Wilson, from Louisiana. Ms. Wilson has been very active with
the Association for the Blind in Louisiana for a number of
years, and has constantly worked on behalf of the blind in our
state. She has met with me on a number of occasions since I
have been in Congress, and has always been extremely helpful in
providing good information and, I will say, as much as any
other advocate that I have come in contact with over the last
12 years, she has been honest, straightforward, and tried to do
her best to not only represent those that she is advocating
for, but to be forthright and up-front with the facts and
policy rationale, and for that I appreciate it very much. And
we are, I think, honored to have somebody of her stature in the
blind community here to testify today, and I hope the
Subcommittee will pay attention to what Ms. Wilson has to say.
Chairman Shaw. Indeed, we will, and thank you very much.
Again, I will repeat, we have everyone's full statement to be
made part of the record, and we invite the witnesses to
summarize as they see fit, and we will start with Ms. Gillis.
STATEMENT OF BRENDA-ANN GILLIS, SOCIAL SECURITY BENEFICIARY,
STUART, FLORIDA
Ms. Gillis. Good morning. I would like to thank the
Committee for inviting me here to testify today. This is a very
nerve-wracking experience, but I am honored to be here.
My father always told me that when you need to consider
things in life, especially difficult decisions, you should
first try to walk in that person's moccasins. So, I suppose my
role here today is to try to express to you what my moccasins
feel like and encourage you to try to walk in them with me for
a few moments.
I am relatively new to blindness. I was declared legally
blind in 1994 when my son was two years old. It was a very
difficult transition for me, and to this day I still need some
blindness skills that I haven't quite mastered yet. Braille is
one of them. Otherwise, I would have note cards and be much
more organized.
I worked my whole life. I was encouraged to do so from the
time I was 15. I picked corn and tomatoes in south Jersey, and
I knew that by doing that I was contributing to my government,
to my community, and to my future retirement benefits.
When I was declared legally blind, I had held a job that I
had enjoyed for 11 years, as the Parish Administrator for the
Episcopal Church. In that job, I earned a $30,000-a-year wage
and was provided with $5700 a year in medical benefits, and I
had $4900 a year contributed into a retirement pension by my
parish.
As my sight diminished through the retinitis pigmentosa,
which is a degenerative disease of my retina which has slowly
robbed my vision and tunneled it down to the point where one
day I will have no vision left, I began to realize that it was
unfair to my parish for me to continue in my employment as I
did not have all the skills I needed, the equipment I needed,
and I was rapidly approaching a point in my life where I would
no longer be able to drive. After almost having an accident
with my three-month-old son in the car, I decided to give up my
driving privilege.
As time wore on, my job became more and more difficult for
me to do effectively, so I resigned that position. At that
point, I applied for Social Security Disability benefits. While
I awaited a determination from Social Security as to my
eligibility, my family faced the foreclosure of our home. It
was a very scary time, having such a young child in the home,
and I really didn't know where to turn.
It was shortly thereafter that I became associated with the
National Federation of the Blind, and I have since touted this
relationship as the best career move I have ever made. I
finally found a group of professionals who treated me as an
equal and didn't judge me on the basis of my inability to see.
I struggled quite often with my family and friends, not
knowing how to handle me under my new set of circumstances.
And, finally, the disability benefits arrived. I began my own
business. I own Letter Perfect in Stuart, Florida, and do
secretarial duties on the side. However, because of the
earnings limit imposed upon me as a recipient of SSDI, I have
to be very careful as to the types of jobs that I accept and
the duration of those jobs and how they affect that income at
the end of the month.
The reason for this is, if I earn $14,000 a year, I lose
$20,000 of benefits. The loss of that income would then once
again place me in the position of facing foreclosure on my
home. It is very difficult to juggle in one's mind how to
manage a business under these circumstances.
I very much want to work. I do not view my vision loss and
my blindness as a reason not to be employed. So, with my
benefits at $1715 a month, I encourage you to raise the
earnings limit so that I could go back to work and augment my
retirement and be made whole with the middle class. I guess
that's all. I just heard my tone back here.
My retirement benefit is important to me, and at the
current rate I cannot augment that in any way. So, I implore
you to consider raising the earnings limit for the blind so
that I can compete with the other members of the middle class.
I thank you for the time to speak.
[The prepared statement follows:]
Statement of Brenda-Ann Gillis, Stuart, Florida (Social Security
Beneficiary)
My name is Brenda-Ann Gillis. I am a 35 year-old wife,
mother, business owner and advocate for the blind community of
Martin County, Florida. I have lived in my single family home
since June of 1986.
First, I would like to thank the committee members for
allowing me to share my story. The earnings limit has a direct
negative impact on my life and that of my family. I hope that
my testimony will illustrate the difficult economic choices
blind individuals must face when contemplating work.
Background
I was born with retinitus pigmantosa (RP). My condition was
not diagnosed until I entered college in the fall of 1982.
Because of the degenerative nature of the disease, my vision
was not noticeably affected for some time after the initial
diagnosis. As a result, I was able to graduate from college and
begin my working career without using any of the adaptive
techniques that a blind individual uses. After college a local
print shop employed me as their office manager. Eventually I
accepted a position as a parish administrator for the Episcopal
Church and worked there from 1985 to 1996. As time went on, I
found my vision getting worse and worse. Finally I was declared
to be ``legally blind.'' It was difficult to do my job without
knowing how to ``function'' as a blind person. As a result, I
had to leave my job.
After leaving my job I applied for Social Security
Disability Insurance (SSDI) benefits to which I was entitled.
Unfortunately an eligibility determination did not come soon
enough. My loss of income resulted in a possible foreclosure on
our home. While awaiting a determination by the Social Security
Administration, I sought service from the Division of Blind
Services in West Palm Beach. I was able to locate an employer
who was willing to employ me as a ``work at home'' sub-
contractor and began to operate my own business. Eventually I
was awarded disability benefits. My disability benefit coupled
with my part-time job, however, does not compensate for the
loss of the previous income.
I was frustrated with my new circumstances. I had never
noted as a sighted member of society, that the stereotypes
associated with blind persons were a large and seemingly unfair
invisible barrier that could not be moved or altered with any
measure of ease. For me, I had been a visible and active member
of my community, but on that day when I was presented with a
white cane all my accomplishments of my past seemed to
disappear and even my closest friends were struggling with how
to handle the person I had become. It was at that point that
the decision was made to either give up or start fighting and
this is when I came to learn of the National Federation of the
Blind. The relationship I have developed with this organization
since that time is in my opinion the best career move I ever
made. I had finally found a group of professionals who
acknowledged the skills and intelligence that I had always
possessed but were no longer recognized by my sighted
colleagues. So, I set to work at the business of ``Changing
What it Means to be Blind'' everywhere I turned. In the
furniture store when the sales woman inquired as to why my
friend would bring a blind person to shop for furniture, my
friend replied, ``. . I bring her along to evaluate comfort and
texture.'' In a restaurant when the hostess literally grabbed
my head and proceeded to demonstrate the proximity of the
sconce on the wall to ensure that I would not injure myself. I
made a point of contacting the management and requesting the
opportunity to come back and place his staff under occlusion
and allow them to experience a meal without sight. My resume to
employers does not begin with the line ``I am a blind
applicant,'' but when I arrive for interviews the position has
undoubtedly been filled in the time it took me to travel to
their office. Why then do we always seem to seek new and
innovative ways to oppress blind individuals? Is there not
enough in the way of daily challenges for our lawmakers to feel
it necessary to exclude the blind when they discuss our ability
to work and earn a decent living? Please do not take these
comments to infer that you are not sensitive, as I am sure you
are, but quite frankly, even I did not contemplate the impact
being blind has on one's life until I myself became blind.
Earnings Limit Work Disincentive
The reality for me is that I simply do not view myself as
less employable now than I was in 1985 when I was considered to
be a ``sighted'' member of society. The loss of my eyesight did
not affect my ability to reason, manage, perform or
communicate. My brain did not die. I truly wish to work. I
truly am concerned about the need for me to provide for my
retirement, my son's education and actively participate in my
community. Unfortunately, because I happen to be blind, some of
these goals are not prudent given the current restrictions
posed upon my family and myself. The reality is that given the
present earnings limits for blind individuals, it is not
practical for me to seek employment. Presently I receive
monthly checks in the amount of $933.00 for myself, $498.00 for
my dependent son and a disability pension from church insurance
in the amount of $292.00. This totals $1,715 in monthly
benefits of which I pay federal taxes on only one half of the
$933.00 and 100% on the $292.00 of 1099-R income. By not
working I additionally save the expense of childcare,
transportation and insurance, together with all the other
routine incidentals associated with leaving my home to work in
an office environment. Under this present set of circumstances,
I would have to secure a job that paid $35,500 per year to
simply break even. At that rate of pay, which would require
employment that a blind individual would have to maneuver to
secure, I would have no extra money to save for retirement. By
not working, the prospect of retirement becomes even dimmer
since I am not continuing to contribute to the system which
will eventually be charged with providing my only source of
income. It has come to my attention that upon reaching the age
of 65 my disability pension will be reduced from $292 to $63
per month. When my son turns sixteen I will lose $498 per
month. While I am bright enough to comprehend the economic
impact of my present circumstances on my eventual retirement,
there is simply no way in my mind to prevent the inevitable. If
I were to take a job for the average wage of approximately
$23,000 per year in our area, I would not only lose my monthly
benefits, but I would further be asked to pay taxes of 100% on
this earned income. The bottom line is at that rate I would
once again face the foreclosure of the mortgage on my home and
still have no free dollars to invest in the augmentation of my
retirement income. Work at this point would force me to
significantly decrease my monthly cash flow.
In closing, I wish to share a bit of reality with those of
you who enjoy the privilege of being sighted and all that goes
with it. In addition to the inconceivable notion that you would
no longer be able to ``see'' the beauty of all that God has
created for our enjoyment, you would also lose the respect you
have earned from your peers despite your accomplishments. You
would lose the self-esteem that comes with the pride of being
employed and rewarded for a job well done. You would lose the
privilege of driving and subsequently the loss of your personal
freedom to travel when and where you wish to go. And you would
face on a daily basis the uninformed and sorely uneducated
general public who would view you as a person who deserves
their pity and constant assistance. If you were blind, I am
certain that you would evaluate your situation and do as I have
done, pick yourself up and start fighting for the truth to be
revealed. You would realize without a doubt that the only way
to effect change under such circumstances is to teach by your
example, to earn respect through your accomplishments; and you
would be forever transformed into the mind set that the
democratic process requires your personal involvement.
Conclusion
Therefore, I ask that you thoughtfully consider what your
life would be like if you woke one day to find yourself in my
moccasins. Would you view your circumstances as a really good
reason to continue in the status quo and never consider the
possibility of obtaining a job? Would you view the work
disincentives imposed upon you by your government as fair and
just? Would you be content to live in this manner when you know
the best way to change public perceptions is by doing precisely
what others may think is simply not possible for you to do?
If it is your intention to provide an environment that
fosters the pursuit of life, liberty, and happiness, then you
have no choice than to find a way for blind persons to earn a
comfortable way of life. Solutions must be found to make it
feasible for us to contribute to our communities and our self-
esteem. As the population of the blind and visually impaired
grows across our nation we must find ways to ensure that they
are accepted as functional members of society and not simply
brushed aside or ignored as a dirty little secret. It is
inconceivable to me to imagine that here in the land of
freedom, the home of the brave, we find ourselves too fearful
of the consequences to do what we know in our hearts to be the
right thing. If we are to tout the virtues of independence then
we need to ensure that every citizen is afforded the
independence necessary to succeed and prosper here and now in
the United States. This is precisely why I traveled here today.
I truly appreciate the opportunity to express to each of you
why it is imperative that you increase the earnings limits of
the blind to the extent that the blind of our nation can be
made whole. If provided a limit of earnings that will afford me
the opportunity to actually seek employment that would place me
in a position of equality with the middle-class citizens who
are considered to be ``able-bodied,'' then I promise to each of
you I would happily welcome the chance to avail myself to being
the responsible citizen who works hard to earn all the benefits
and privileges associated with living in our free country. It
has truly been an honor to address you today, and I will leave
our Capitol now with the knowledge that you have carefully
listened to my personal story and will seriously consider the
impact the choices you make today will have on at least one
blind person from the state of Florida who stood before you
praying that you will listen to your hearts and do that which
is only right and just. Thank you.
Chairman Shaw. Thank you, Ms. Gillis. Ms. Wilson.
STATEMENT OF JOANNE WILSON, DIRECTOR, LOUISIANA CENTER FOR THE
BLIND, RUSTON, LOUISIANA
Ms. Wilson. Thank you, Congressman McCrery, for your kind
words. I want to talk to you today about fleas and about blind
people. Scientists have taken fleas and they have put them in a
jar and put a lid on that jar, and the fleas would try and jump
out of the jar. And after hitting their heads on the lid
several times, they would realize they could only jump just so
high, right under where that lid would be.
Now, if the scientists take the lid off the jar, the fleas
will continue to jump just so high, just right below where that
lid was, and never realize that if they made one more jump they
would be set free.
This is very much like what happens to blind people. I run
the Louisiana Center for the Blind. I have been doing that for
15 years now. We bring in students from all over Louisiana and
all over the country, who say they want to go back to work,
that they are coming there for training so they can go back to
work. We have had 521 students now enrolled at our Center.
I recently did statistics that said that 41 percent of
those students came in on Social Security Disability, and out
of that 41 percent, unfortunately, only 15 percent ultimately
left the Social Security rolls and went back to full-time
competitive employment. Some of the others went to work, but
just under the earnings limit.
Now, I thought, 15 percent, we are doing something wrong,
until I found figures that in the general disability population
it is less than 5 percent that ultimately leave the Social
Security disability rolls and go back to work.
We are thought of as one of the best agencies in this
country for rehabilitation, but yet we are not getting to some
of these folks. The Ticket to Work program has some good things
in it, but it is not hitting the real problem that is faced by
blind people. In most polls and anybody that you ask, cancer,
AIDS and blindness are the three most dreaded things that could
happen to you.
The real problem with getting blind people off of Social
Security disability is a psychological one. It is a fear of
risk. The real problem of blindness is not the loss of
eyesight, it is the misconceptions and stereotype notions that
exist about blindness, and these stereotype notions exist with
the sighted public, but they also exist with the blind. Blind
people themselves really don't believe in what they can do.
When they leave our center, they know what they should do, but
they don't really know in their hearts what they could do.
Just last Tuesday, I met with our students and I told them
I was coming for this testimony, and I said to them, ``I want
to speak to you, you that are getting Social Security
Disability. Tell me how you are thinking''.
Jack immediately piped up and said, ``Well, you know, I am
kind of old, and I don't want to go back to work, and it is
time for the younger folks to take my place, and I don't need
all that pressure''. And another student said, ``Wait a minute,
Jack, how old are you?`` And he said, ``Well, I am 40''. And
they all started laughing, and they said, ``Jack, what is the
real problem?'' The real problem, after we prodded a little
bit, was Jack didn't really believe that he could go back to
work, that he could take the risk and become competitive again.
Brenda, one of our students, said, ``Well, it is really
hard for me to give up the certainty of a check when I have two
children, and rent to pay, and food to put on the table. I just
can't take the risk when I know I am going to get probably a
minimum wage job''.
Janice spoke up and said, ``I can't afford to go back to
work. By the time the taxes are taken off and the huge cost of
transportation and accessible means of working as a blind
person, I can't afford to go back to work. It doesn't pay for
me to work''.
The stories went on and on, but what is happening is that
we are denying people that have paid into the system, that have
paid into the system and that have talents and experiences and
things to give back. We are denying society the opportunity for
those talents to be utilized and for them to become taxpaying
citizens.
I ask for all of you--I know we have the votes, if we could
just get it up for a vote--to help us take off the lid, take
off the lid for blind people so we really don't have these
psychological and emotional barriers caused by Social Security
work incentives, and we could really get back to work. Thank
you.
[The prepared statement follows:]
Statement of Joanne Wilson, Director, Louisiana Center for the Blind,
Ruston, Louisiana
My name is Joanne Wilson. I am director of the Louisiana
Center for the Blind in Ruston, Louisiana. My address at the
Louisiana Center is 101 South Trenton, Ruston, Louisiana 71270.
The telephone number at the Center is (318) 251-2891.
I want to thank the distinguished members of this Committee
for an opportunity to testify regarding the issue of Social
Security earnings limitations for the blind.
Approximately 15 years ago we opened the Louisiana Center
for the Blind as a private, non-profit rehabilitation training
facility for blind and visually impaired adults. With support
from the membership of the National Federation of the Blind of
Louisiana, we willingly undertook the imposing task of opening
a facility that would provide training for blind and visually
impaired individuals. Foremost in our thought was that if we
were to ever gain the acceptance of a society which for
centuries had regarded blind people as severely limited and
unable to lead full lives which include productive work and
full participation in the affairs of their communities, then we
needed to establish ourselves within those communities as
respectable citizens, with the same hopes and expectations as
our sighted peers. We knew that with proper training and
opportunity a blind person could become a contributing member
of our complex society, but such achievement had to begin with
instilling a positive philosophy about blindness in blind
people themselves.
What is of paramount importance for your deliberations
today is understanding that for a blind person, the real
problem of blindness is not the loss of sight, although this is
significant. Rather, it is the attitudes which exist, both
among the sighted public and among the blind themselves
concerning blindness and the ability of the blind to compete
with their sighted counterparts.
Certainly, it is well documented that historically blind
individuals have always been last in line when they must
compete with the general public for services, and more often
than not they are denied access to employment and full societal
access. While training facilities like the Louisiana Center for
the Blind and others across the country can address societal
attitudes, employment is a persistent problem. Many members of
the public have long assumed that blind people could not engage
in productive work, at least not at a level that would allow
them to be economically self-sufficient. To many in our
society, a legally blind person is presumed to be unemployed,
if not unemployable. Imagine, if you will, being a blind person
growing up in a society that has embraced this notion
wholeheartedly, with its formidable misconceptions about who
you are and what you are able to do. Every fiber of your being
would long for the opportunity to compete for a job and succeed
or fail on your abilities--not on preconceived notions about
your blindness.
Emerging from a long history of dependence and lack of
opportunity to escape from it, with its stifling of the human
spirit and its degrading effect on self-esteem, has presented a
tremendous challenge to individuals who are blind. They know
that most employers can see and cannot imagine even being able
to get to the job (let alone doing the job) without their
sight. In this respect, blindness is unlike most other
disabilities in that the effects of not seeing are believed to
be all-pervasive. We as blind people have struggled mightily
for the small advances we have made, yet clearly individuals
who are blind are not yet realizing the ``American Dream'' even
in the best of economic times.
The nation's policy is to promote opportunity. In the
Rehabilitation Act of 1973, for example, Congress defined the
purpose and mission of the rehabilitation program as follows:
``Sec. 2. (B)(1) to empower individuals with disabilities to
maximize employment, economic self-sufficiency, independence,
and inclusion and integration into society. . . ``(2) to ensure
that the Federal Government plays a leadership role in
promoting the employment of individuals with disabilities,
especially individuals with significant disabilities. . .''
Inclusion of the Rehabilitation program in the Workforce
Investment Act of 1998 reinforces the intent of Congress that
persons with disabilities can and should participate fully in
the American labor force. However, according to a study
published in Americans with Disabilities: 1991-1992 U.S. Bureau
of the Census, Current population Reports (870-33), Washington,
DC: U.S. Government Printing Office, the employment rate among
those with visual disabilities is approximately 26%, with the
remaining 74% either ``out of the labor force'' or
``unemployed.'' Since clearly Congress has provided a system to
promote inclusion of persons with disabilities in meaningful
employment, why then does such an alarming rate of unemployment
among the blind persist?
It is well documented that a major disincentive to the
blind considering work is the loss of cash benefits under
Social Security Disability Insurance. This program provides
support to meet subsistence-level needs, and eligibility for
this assistance is virtually automatic for a blind person.
Although the benefit payments are modest compared to earnings
from most (even entry-level) employment, the security it
provides is highly valued. The fear of losing those benefits is
great, due primarily to uncertainty about the impact of working
on benefits and the belief that future assistance may not be
available if work stops. Blind people are aware that, under the
current limitations, one dollar over the earnings limit for the
blind will result in complete loss of cash benefits. Think, if
you will, about your own work here. Clearly if work defines us,
as many contend, blind and visually impaired persons do not
find it easy under the current limitations to resist becoming
``underachievers'' or ``second-class'' participants in
America's workforce.
In my position as director of a training facility, I have
personally counseled with hundreds of individuals who are
convinced that they must remain dependents of, rather than
contributors to, the system. Examples which immediately come to
mind are two individuals who became blind in mid-career. In
both instances, their blindness was sudden because of medical
conditions which did not affect them in any other way-only
their vision was affected. Both were professionals with
established careers, who realized that in order to regain their
confidence and possess the ability to travel and care for
themselves independently, they needed to learn alternative
techniques of doing so as blind persons. Incidentally, not only
did they need to learn skills, but they also needed desperately
to re-gain their self-esteem. After completing training, they
fully expected to return to their respective fields, James as a
construction engineer with 25 years' experience building major
highways across the country and Robert as an claims adjuster
with a national insurance corporation. However, when job
placement efforts began near the end of their training, it
became apparent that their respective companies were not
interested in their knowledge and experience but rather were
consumed with imagined barriers and false misconceptions about
the abilities of these two formerly valued employees who were
now blind.
At that point they faced a dilemma: Should they return to
work for mediocre wages which wouldn't cover their mortgages,
or should they become dependent upon Social Security benefits,
which would at least provide some reliable income for their
families? Senior citizens in similar situations do not have to
make this choice. Why then, should a blind person? Had these
individuals been given an opportunity to work, even at modest
wages, and to keep their earnings without loss of Social
Security benefits, I could tell you today that they are
contributing to and not drawing support from the system. Sadly,
I cannot do that. They returned home with their hopes and
careers dashed, facing uncertainty about their ability to care
for their families.
When I think of James and Robert, I am reminded on the
other hand of two elderly individuals I know-both of them quite
financially secure, who decided because of boredom to return to
work when they were well into their 70's. An attorney and a
rancher, respectively, they have generously endowed
universities and institutions with their gifts, yet they still
earn Social Security benefits, earn wages which are never
questioned, and complain when Medicare doesn't cover the cost
of a medical procedure. No earnings limitations are imposed on
the elderly. The system did not encourage these two to stay
dependent and to remain idle from fear of losing everything.
Nor did it strip them of their dignity as it did James and
Robert. My question then, is why earnings limitations are
imposed on the blind. Is it because our aspirations and our
sense of personal responsibility are those of such a relatively
small number that they go unnoticed? If that is the case, I ask
you to consider these two facts: Blind individuals do compose
only a very small segment of our society. If 74% of that small
number are either ``out of the labor force'' or ``unemployed,''
then the current system with its disincentives to work has
failed.
Removing attitudinal barriers, raising expectations on the
part of employers and individuals who are blind, and instilling
the work ethic in those who have experienced little opportunity
for meaningful work-these are the needs and challenges which we
address today. Eliminating the earnings limit for blind
individuals will ensure that more blind Americans have the
opportunity to participate in the workforce, express their
strong work ethic, and exercise personal responsibility as they
long to do. We ask that you help us achieve our goal to be
recognized as contributing members of society and to gain
respect for our abilities by giving them free rein to help
build a more productive nation. Thank you.
Chairman Shaw. Thank you, Ms. Wilson. Dr. Cavenaugh.
STATEMENT OF BRENDA S. CAVENAUGH, PH.D., RESEARCH DIRECTOR,
REHABILITATION RESEARCH AND TRAINING CENTER ON BLINDNESS AND
LOW VISION, MISSISSIPPI STATE UNIVERSITY
Ms. Cavenaugh. Good morning, Mr. Chairman, Members of the
Subcommittee. Thank you for the opportunity to testify. I have
worked in blindness rehabilitation since 1972. Today, my
testimony is based upon findings from research conducted at the
Rehabilitation Research and Training Center on Blindness and
Low Vision at Mississippi State University. The RRTC, was
established in 1981, through the support of the National
Institute on Disability and Rehabilitation Research. We are the
only NIDRR-funded center studying blindness and low vision. Our
mission is to conduct research activities focused on improving
the employment and independent living outcomes of consumers who
are blind.
I would like to present findings on the costs and
employment experiences of blind individuals. First, findings
from an analysis of data on consumers served in the State-
Federal Vocational Rehabilitation Program, will be presented,
followed by findings a national survey of blind consumers.
The Rehabilitation Act of 1973, as amended, authorizes the
allocation of federal funds on a formula basis to the states
and territories for the administration of a vocational
rehabilitation VR program to assist individuals with
disabilities in preparing for and engaging in gainful
employment. State VR agencies provide a wide variety of
services. The following findings are based on data from the
1998 Rehabilitation Services Administration, RSA, 911 National
database of all clients/consumers exiting the VR program from
the 50 states and from the District of Columbia.
The number of persons who had been accepted for and
received services who exited the program in 1998 was around
360,000. Four percent of those 360,000 consumers were legally
blind, and about 96% or 345,000 had other disabilities.
When comparing competitive closure rates of consumers--and
I am using RSA's definition of competitive employment which
includes those consumers with competitive employment closures,
self-employment closures, or business enterprise program
closures--35 percent of blind people were closed in competitive
employment, 60 percent of other people with other disabilities
were closed in competitive employment.
In comparing costs, the mean cost of services of blind
persons with competitive employment outcomes was approximately
$8,200. The mean cost of services for consumers with other
disabilities was approximately around $3500. The average mean
number of services for blind persons was approximately 6; the
mean number of services for other persons with disabilities was
around 4.5. The mean length of services of legally blind
consumers was about 4 years; for people with other
disabilities, the length of services was approximately 3 years.
Included in my written testimony is a list of 17 services
that people can receive through the State-Federal VR program. I
have included the percentage of legally blind people receiving
each service, and the percentage of people with other
disabilities receiving each service.
This information indicates that blind people are five times
more likely to receive rehabilitation engineering services.
They are three to four times more likely to receive assistive
technology devices and assistive technology services--services
that are critical to maintaining employment.
To further investigate differences in cost of services, I
categorized people with disabilities into 16 sub-groups. Again,
the cost for legally blind people was $8200. Cost of services
was highest for people who are deaf-blind--approximately,
$8600. Cost of services was least expensive for people with
nervous system disorders--approximately $2700.
To summarize, the mean cost for serving blind people is
double the cost for serving other persons with disabilities. In
addition to services noted above, blind people are twice as
likely to need adjustment training, twice as likely to need
personal assistance, and unlike other impairment-related
services such as occupational or physical therapy, blindness-
specific services and equipment--critical to acquiring and
maintaining employment--are rarely, if ever, reimbursable
through Medicare or other health plans. Additionally, these are
generally not one-time expenses. For example, blind persons
must purchase new--or upgrade, if it is an option--speech,
Braille, and large-print computer access technology when new
versions of mainstream computer operating systems and software
are released. Orientation and mobility services may be required
when employment settings change.
Finally, with respect to findings from the national
telephone survey. Legally blind persons were asked if
specialized technology assistive technology was needed to
perform their job effectively, eightly nine percent of the
participants said yes. When asked if they would like a regular
job, 92 percent of those participants who were unemployed said
yes, they wanted a job.
In conclusion, blind people want to work. Blind people
require specialized skills, services, technology, and equipment
not covered by insurance. Many blind people can pay for these
expenses because this higher SGA level. Thank you.
[The prepared statement follows:]
Statement of Brenda S. Cavenaugh, Ph.D., Research Director,
Rehabilitation Research and Training Center on Blindness and Low
Vision, Mississippi State University
Good morning, Mr. Chairman and Members of the Subcommittee.
Thank you for inviting me to testify on issues related to work
incentives for blind and disabled Social Security
beneficiaries. I have worked in vocational rehabilitation since
1972 and am currently the Research Director at the
Rehabilitation Research and Training Center (RRTC) on Blindness
and Low Vision at Mississippi State University. The RRTC was
established in October, 1981, through support from the National
Institute on Disability and Rehabilitation Research (NIDRR) of
the U. S. Department of Education. As the only NIDRR-funded
RRTC studying blindness and low vision, our primary mission is
to conduct research, training, and dissemination activities
focused on improving the employment and independent living
outcomes of consumers who are blind or severely visually
impaired. Dr. J. Elton Moore serves as our Executive Director.
Today, I will be reporting findings on the costs and
employment experiences of individuals who are blind or severely
visually impaired (hereafter referred to as blind persons).
First, results of analysis of national data on consumers served
in the state-federal vocational rehabilitation (VR) program
will be presented. These findings indicate that although the
substantial gainful activity (SGA) level for blind
beneficiaries is higher than the SGA level of other disabled
persons ($1170 vs. $700 per month), blind persons must purchase
specialized blindness-related services and equipment which are
not reimbursable through Medicare or other health plans.
Further, these are critical to their achieving and sustaining
employment. Second, preliminary results from a national survey
on the employment status of working-age persons who are blind
will be presented. These findings provide more detailed
information on the relationship of work disincentives and
employment.
Analysis of State-Federal Vocational Rehabilitation Data
The Rehabilitation Act of 1973, as amended, authorizes the
allocation of federal funds on a formula basis to the states
and territories for the administration and operation of a
vocational rehabilitation (VR) program to assist individuals
with disabilities in preparing for and engaging in gainful
employment. State VR agencies provide a wide range of services
(e.g., physical restoration, counseling and guidance,
vocational training, maintenance, job referral, job placement,
rehabilitation engineering, assistive technology) to assist
people with disabilities in becoming employed. VR program data
were derived from the 1998 Rehabilitation Services
Administration (RSA) 911 National data base. All cases exiting
from the VR program from the 50 states and the District of
Columbia were used in the analysis.
Consumers Exiting VR program after ``Individualized Plan for
Employment'' Initiated (Includes both ``rehabilitated'' and
``not rehabilitated'' closures)
Total Served....................... n = 359,913
Legally blind consumers............ n = 14,732 (4%)
Consumers with other disabilities.. n = 345,181 (96%)
Consumers Exiting VR program ``Rehabilitated'' with Competitive
Employment Outcomes includes competitive, self-employment, or
state-agency-managed business enterprise work statuses
Competitive Outcomes............... n = 212,082
Legally blind consumers............ n = 5,201 (35% of 14,732)
Consumers with other disabilities.. n = 206,881 (60% of 345,181)
Service Intensity Variables (computed only for consumers with
competitive employment outcomes)
Mean Cost of Services..............
Legally blind consumers............ $8,184
Consumers with other disabilities.. $3,488
Mean Number of Services............
Legally blind consumers............ 6.0 services
Consumers with other disabilities.. 4.5 services
Mean Duration of Services..........
Legally blind consumers............ 4.0 years
Consumers with other disabilities.. 3.0 years
The Rehabilitation Services Administration defines cost of
services as the total amount of money spent by the State VR
agency in providing or arranging for services on behalf of the
consumer. Expenditures are ``life-of-the-case'' costs and do
not refer to any particular year. In addition, the RSA requires
the VR agency to include information on whether the client did,
or did not, receive a specific service sometime during the VR
process. To further explore possible reasons for differences in
costs and numbers of services between blind consumers and those
with other disabilities, percentages from cross-tabulations
were computed. Results from this analysis are reported in Table
1.
Table 1: Percent Receiving Services by Disability
----------------------------------------------------------------------------------------------------------------
Types of Services Legally Blind Other Disability
----------------------------------------------------------------------------------------------------------------
Assessment............................ 84% 82%
Physical Restoration.................. 39% 29%
University Training................... 10% 16%
Business or Vocational Training....... 7% 14%
Adjustment Training................... 50% 20%
On-the-job Training................... 5% 7%
Miscellaneous Training................ 24% 16%
Counseling and Guidance............... 79% 76%
Job Referral.......................... 18% 38%
Job Placement......................... 15% 29%
Transportation........................ 30% 30%
Maintenance........................... 14% 16%
Personal Assistance (includes reader). 12% 2%
Rehabilitation Engineering............ 12% 2%
Assistive Technology Devices.......... 42% 8%
Assistive Technology Services......... 45% 12%
Other Services........................ 42% 23%
----------------------------------------------------------------------------------------------------------------
Comparisons among ``other disability'' group. To explore
differences within the ``other disability'' group, those
consumers with competitive sector outcomes ((n = 206,881) were
further categorized into disability sub-groups. Sample size,
cost of services and percent competitively closed (i.e.
competitive, self-employed, and BE closures) are reported in
Table 2.
Table 2: Disability by Cost of Services and Percent Competitive Employment
----------------------------------------------------------------------------------------------------------------
Disabling Condition Mean Cost of Services Competitive Closure
----------------------------------------------------------------------------------------------------------------
Deaf-blind (n=166).................... $8,602 45%
Legally blind (n = 5,201)............. 8,230 35%
Orthopedic conditions (n = 44,229).... 4,608 62%
Genitourinary system (n = 2,249)...... 4,557 70%
Visual impairments, but not legally 4,418 57%
blind (n = 5,242)....................
Neoplasms (n = 846)................... 4,404 65%
Traumatic brain injuries (n = 3,990).. 4,393 55%
Allergic endocrine, nutritional 4,112 62%
diseases (n = 3,557).................
Hearing impairments (n = 15,458)...... 3,761 72%
Speech impairments (n = 591).......... 3,682 68%
Respiratory conditions (n = 787)...... 3,492 56%
Diseases of the blood (n = 4,524)..... 3,204 67%
Mental and emotional conditions (n = 3,155 56%
85,265)..............................
Digestive system conditions (n = 3,111 83%
3,345)...............................
Cardiac and circulatory conditions (n 2,920 64%
= 3,537).............................
Nervous system disorders (n = 23,961). 2,688 63%
----------------------------------------------------------------------------------------------------------------
Conclusions
Mean cost of VR services for legally blind
consumers reaching competitive employment outcomes is more than
twice the cost of services for consumers with other
disabilities ($8,184 vs. $3,488).
When consumers with other disabilities are grouped
into smaller categories of disability-specific conditions, only
deaf-blind consumers (n = 166) have a higher mean cost of VR
services when compared with legally blind consumers $8,602 vs.
$8,230). Consumers with orthopedic conditions have the third
highest cost of services ($4,608).
Legally blind consumers are more than twice as
likely than consumers with other disabilities to receive
adjustment training and approximately four times more likely to
receive personal assistance (includes reader services),
rehabilitation engineering, assistive technology devices, and
assistive technology services. (Adjustment training includes
training in blindness-specific skills, such as Braille,
orientation and mobility, and activities of daily living.
Rehabilitation technology devices and training includes
purchase of and training to use blindness-specific technology,
such as computer speech, Braille, and large print plus low
vision optical and non-optical devices.)
Unlike other impairment-related services such as
occupational or physical therapy, blindness-specialized
services and equipment--critical to acquiring and maintaining
employment--are rarely, if ever, reimbursable through Medicare
or other health plans. Additionally, they are generally not
``one-time'' expenses. For example, blind persons must purchase
new (or upgrade if an option) speech, Braille, and large print
computer access technology when new versions of mainstream
computer operating systems and software are released;
orientation and mobility services may be required when
employment settings change.
Factors Affecting Employment Status of Persons who are Blind:
Preliminary Analysis of National Telephone Survey
Research Question:
What employment-related factors have the most impact on
employment status and occupations of working age adults with
blindness or visual impairment?
Participants:
Working-age adults who are legally blind (N = 279)
Sampling Frame
National Library Service (NLS) subscribers designated as
blind or visually impaired
Sampling Design:
Systematic sampling with random start -every kth element in
the total list chosen (first chosen at random). Sample size
chosen to ensure findings are accurate within plus or minus
five percentage points of the population parameters (95 percent
confidence level). Sampling tolerances (intervals) range from
3-5 points, depending upon percentage result (worst case
scenario 50% would be 5 points; best case 10% or 90% would be 3
points.
Selected Findings related to SSDI ``Income Cliff'':
When asked if ``risk of losing benefits or insurance
payments'' was a employment barrier that they had personally
encountered in trying to find a job, 27% of participants
answered affirmatively.
When asked if ``risk of losing benefits or insurance
payments'' was an important reason they were not working full-
time, 34% of participants working part-time or unemployed
answered affirmatively.
When asked if ``risk of losing benefits or insurance
payments'' was an important reason they were not working full-
time, 39% of participants working part-time answered
affirmatively.
When asked if specialized assistive technology was needed
to perform job effectively, 89% of participants answered
affirmatively.
When asked if they would like a regular job, 92% of those
participants who were unemployed, but not currently looking for
employment, answered affirmatively.
References
Cavenaugh, B. S. (2000). [Analysis of Rehabilitation
Services Administration R-911 National Data, Fiscal Year 1998].
Unpublished raw data.
Cavenaugh, B. S. (2000). [Analysis of National Telephone
Survey on the Employment Status of Blind Persons]. Unpublished
raw data.
The Rehabilitation Research and Training Center (RRTC) on
Blindness and Low Vision at Mississippi State University was
established in October, 1981, through support from the National
Institute on Disability and Rehabilitation Research (NIDRR) of
the U. S. Department of Education. As the nation's only RRTC
studying blindness and low vision, our purpose is to enhance
employment and independent living outcomes of consumers who are
blind or severely visually impaired through the conduct of
research, training, and dissemination activities.
Chairman Shaw. Thank you. Mr. Gashel.
STATEMENT OF JAMES GASHEL, DIRECTOR, GOVERNMENTAL AFFAIRS,
NATIONAL FEDERATION OF THE BLIND, BALTIMORE, MARYLAND
Mr. Gashel. Thank you, Mr. Chairman. I am appearing today
on behalf of the National Federation of the Blind, and I
appreciate the opportunity to testify.
It is no secret that the NFB has sought removal of the
earnings limit just like seniors. We hold this view because the
work and beneficiary status of the vast majority of blind
people is just like seniors.
We had a policy in this country until yesterday, telling
seniors not to work and paying them not to. Congress was right
to end that policy. The earnings limit stifles initiative and
kills the spirit.
It is one thing when this happens to someone at age 65, who
has worked a lifetime and had opportunities throughout that
lifetime. It is a different thing all together, and it is very
sad, when this happens to a person who is blind at age 25, told
not to expect very much of themselves for the future, and then
to have that confirmed by the earnings limit.
I have witnessed this throughout my 30-year career in
counseling blind people about going to work and helping them
struggle with the earnings limit.
You should see the letters they receive from Social
Security, from Susan Daniels over here. They don't thank you
for going back to work. What do you think it says to a person
when you get a letter from Social Security that goes like this:
``We are writing to give you new information about the benefits
you receive on this record, and the rest of this letter will
tell you how we overpaid you $45,000''--or pick some other
number, it is usually real high--``too much in benefits, and
how you can pay us back.''
People are devastated by this. They are trapped in a system
that doesn't help them go to work and doesn't really seem to
want them to. It penalizes them if they do. Our country can do
better. We are going to do better for seniors, and I think that
reflects a great deal of credit on you.
I have been around this issue for many, many years, and I
think that it is right--no person at age 65 will ever get an
overpayment notice like that anymore, regardless of how much
they earn.
I was present when Mr. Archer created the concept of the
equivalent status through the identical earnings limit for
seniors and the blind. He told me that he wanted to remove the
limit all together, but he knew it wouldn't pass right then.
His alternative was five mandated adjustments followed by
automatic indexing applied to seniors and the blind. This did
pass.
With removal of the earnings limit for seniors, a choice
was made to exclude the blind, so what should the policy be? We
have been fighting for years just like seniors, to have
meaningful work incentives just like seniors, so blind people
could go to work and not have any reason not to do so just like
seniors. Is that wrong? Was Mr. Archer wrong when he thought
that linkage up in 1977? Why isn't it right now if it was right
then?
Frankly, I don't know what to say to blind people who are
caught in the earnings limit trap. If Congress has really
adopted a ``just say no'' stance, then I don't know how to
answer that issue. I don't think people can accept the fact
that it is right to pay benefits for someone who earns, let's
say, as much as a member of Congress, over $140,000 a year, and
then just say ``no'' to members of a group who are otherwise
eligible, if they earn $14,000.
On the matter of disability and blindness, I am troubled by
the fact that disability still means the inability to work. I
honestly don't know another definition, but I worry that no
progress will really be made on the earnings limit as long as
there isn't a different definition.
With blindness, SGA is applied as a pure earnings limit,
which could be changed without changing or redefining
disability. I think Congress should look at doing it that way.
Mr. Chairman, the economics of the circumstances of the
blind--low income, intermittent employment, and lots of
unemployment--clearly justify removing limits and providing
resources to members of this population. Our country would be
richly rewarded if you would use your leadership to do this.
There will be no reward if the blind are simply held back
and told that we have to wait again. This is not to say that
something else should not be done apart from blindness relating
to disability because that, too, should be done.
On behalf of the National Federation of the Blind, I thank
you.
[The prepared statement follows:]
Statement of James Gashel, Director, Government Affairs, National
Federation of the Blind, Baltimore, Maryland
Good morning, Mr. Chairman. My name is James Gashel. I am
the Director of Governmental Affairs for the National
Federation of the Blind.
The National Federation of the Blind (NFB) has a membership
in excess of 50,000, representing all states, the District of
Columbia, and Puerto Rico. All of our officers and the vast
majority of our members are blind. Local chapters of the
Federation can be found in most sizable population areas in the
United States. In the words of our monthly publication, the
Braille Monitor, ``We are not an organization speaking for the
blind; we are the blind speaking for themselves.''
This hearing is being held in the wake of legislation
passed to remove the earnings limit altogether for people who
reach age 65. The NFB has sought identical treatment for blind
people. In this statement I will explain how the blind person's
earnings limit presently works and why we think it should be
changed.
How the Blind Person's Earnings Limit Works:
At least two provisions of the Social Security Act work
together to form what I have called ``the blind person's
earnings limit.'' These are section 216(i) (in which blindness
is defined) and the second sentence of section 223(d)(4) (which
specifies that earnings not exceeding the exempt amount for
age-65 retirees are not considered to be substantial gainful
activity (SGA) for someone who is blind). This latter provision
has been amended to exclude the changes in the exempt amount
made in 1996 and the removal of the earnings limit altogether.
This means that the blind person's earnings limit (or
exempt amount--whichever term you like) is now set at $1,170.00
per month. This is $14,040.00 annually, indexed to coincide
with average wage growth determined from year to year. As with
seniors, only Congress can change this limit.
I have used the term ``earnings limit,'' because this is
the best way to describe the situation for the blind. The
technical term formerly used for seniors was the ``retirement
test,'' but members of Congress and the public called it the
earnings limit. With blindness, the technical term is the
``substantial gainful activity test,'' but this too is just an
earnings limit.
SGA is an earnings limit for the blind but an entirely
different concept when used in determining disability. An SGA
determination in disability cases is intertwined with the
decision as to whether or not the person is disabled. The
person found able to perform SGA is not disabled according to
the law.
This is not how it works with blindness. I say this because
of the plain language of section 216(i) of the Act:
``. . .the term 'disability' means (A) inability to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or has lasted or can be expected to
last for a continuous period of not less than 12 months, or (B)
blindness; and the term ``blindness'' means.....''
This language is certainly not new. It has been in the law
this way for at least 35 years. If blindness is established,
the only remaining question is, do earnings (if any) exceed (or
not exceed) SGA? If earnings exceed SGA, no benefit can be
paid. Conversely, benefits are payable when earnings are below
SGA. So--technical term or not--SGA is really an earnings limit
imposed on the blind.
How the Earnings Limit Works as a Disincentive:
I have already said that only Congress can change the blind
person's earnings limit, but why do so? In my mind, the
foremost reason is that only 26 percent of blind adults age 18
to 65 are working to any extent at all. According to a
November, 1999, report of the American Association of Retired
Persons, 12 percent of persons age 65 and older work. So the
vast majority of blind adults, 74 percent, are just like
seniors in regard to work and beneficiary status.
There are many reasons why so few blind people work. Lack
of self-confidence and lack of employers willing to hire them
are two reasons. The imposition of the earnings limit is by far
the reason most often given, however. I say this from 30 years'
experience in counseling blind people to go to work.
Consider the economics in a fairly simple but typical case.
Assume annual cash benefits of $9,000.00 or $750.00 per month.
At this rate for a single person with no other income, the
benefits are tax-free. Taking this into account, plus the
expenses that also go with working (such as commuting and
buying clothing appropriate to the workplace) $15,000.00 in
gross pay would be needed to replace $9,000 in benefits.
Annual pay of $15,000.00 is $7.20 an hour. At $16,000.00 or
$7.70 an hour, the average net gain for working full-time for
an entire year would be about $1,000.00. Earnings below
$15,000.00 will mean a loss. Some will do this, but most won't
because they can't afford to lose income. If the beneficiary
has dependents, the situation is even more troublesome.
With two dependents, the total benefits are likely to
average $18,000.00 annually. Therefore, earnings of $15,000.00
or $16,000.00 (just above the limit) will not replace benefits.
Using conservative assumptions, such as taxes figured at 25
percent of gross pay and child care for two children at $300.00
per month, I conclude that replacement of $18,000.00 in
benefits would require about $33,000.00 in gross pay. When
dependents are involved, the choice to work or not to work is
far more constrained, and the amount needed to replace
everyone's benefit far exceeds the blind person's earnings
limit.
From this it is clear that a typical blind person is apt to
face a severe income penalty with earnings at the entry level.
Most people will not lose with gross pay above $33,000.00, but
most blind people are not being offered that much money to
start or return to work. So most blind people accept their
benefits and often do intermittent work to supplement them.
This way, with benefits of $9,000.00 and earnings of $13,000.00
(just under the earnings limit), the beneficiary can have
$22,000.00 and often do better financially than accepting a
full-time entry-level job.
This is the sad reality that most blind people face day
after day: not getting ahead, just getting by. It would be one
thing if employers were opening their arms to accept us, but
that is not happening. For most blind people, just getting a
chance to have a job is a job itself. This condition, combined
with the earnings limit, leads to lost opportunities and lost
potential for far too many blind people.
Creating Incentives:
Congress is very good at using laws--especially tax laws
and Social Security--to create incentives. There are many
examples of subsidies paid to certain groups or industries to
achieve desirable national goals. The removal of the earnings
limit to subsidize working seniors' wages is a relevant
example. In this instance, one goal is to help employers
maintain an experienced workforce. This responds to current
needs, but many years ago when economic and employment
conditions were different, the earnings limit was a means of
encouraging seniors to vacate their jobs for younger workers.
This brings me to the earnings limit policy for the blind.
What should the policy be? Frankly, the removal of the earnings
limit at age 65 looks like a choice has been made to pay
benefits to seniors who work and pay blind people on the
condition that they don't work. Since both ``retirement age''
and ``blindness'' are defined--so establishing basic
eligibility is really not the question--the policy of no limit
for seniors compared to $14,040.00 for the blind is unjust.
That point is not lost on blind people.
People have asked, ``Would you really pay benefits to blind
people who earn as much as a member of Congress?'' My answer
would be ``yes.'' If benefits are paid to members of Congress
(or others who earn as much as a member of Congress), then I
would not exclude the blind. With the removal of the earnings
limit, benefits will now be paid to thousands of seniors who
will continue to work and earn as much as $141,300.00 and more.
The goal achieved by this policy is valid, but continuing an
earnings limit of $14,040.00 on work performed by the blind is
not.
CONCLUSION:
Mr. Chairman, the economic circumstances of blindness--low
incomes, intermittent work, and lots of unemployment--clearly
justify removing limits and providing resources to members of
this population. This is not to say that issues relating to
disability apart from blindness don't deserve attention--they
do. So, on behalf of the National Federation of the Blind, I
urge you to examine the impact of the earnings limit with the
wisdom, caring, and foresight shown in removing the limit for
seniors. If you do that, I am confident that new opportunities
will result from new incentives. I thank you.
Chairman Shaw. Thank you. Mr. Matsui.
Mr. Matsui. Thank you, Mr. Chairman. I would like to thank
all four of the panelists for their testimony, it was very
precise and very moving.
Dr. Cavenaugh, you indicated that there was a difference in
terms of expenses for those that are blind and other disabled,
and you related a number of numbers. Could you perhaps--and not
go into a lot of detail because it would probably take a long
time--explain where the difference is and why the blind have a
larger expense than the other disabled?
Dr. Cavenaugh. The Rehabilitation Services Administration
requires the state agencies to report ``yes'' or ``no'' if a
person received a specific service during the VR process. RSA
also requires data on total cost of services. So, we know the
total cost of services and which services a consumer received.
There are about 17 different types of services.
Using cross-tabulations, percentages, frequencies, I looked
at the types of services different disability sub-groups
actually received. First, I compared legally blind consumers
with all other consumers. Then I grouped consumers with other
disabilities into 16 sub-groups. I again looked at the services
received by consumers in these subgroups.
I found that blind people were receiving many more of those
services which we would expect to be more expensive. Why is it
two times more expensive for a legally blind person to go
through the VR system? Well, I think it is to some extent
because of the huge cost for rehabilitation engineering. For
example, among legally blind people, 12 percent receive
rehabilitation engineering; in the other disability group,
about 2 percent receive rehabilitation engineering. Forty-two
percent of legally blind people receive assistive technology
devices; 8 percent of other disability groups receive
technology devices. Forty-five percent of blind people receive
assistive technology services; 12 percent of other people do.
So, from this data, that blind people are receiving those
services that are more expensive and, unfortunately, these are
services, as I earlier indicated that are necessary for finding
employment and are also necessary for maintaining employment.
Legally blind consumers are twice as likely to receive
adjustment services. Adjustment services include training in
blindness-specific alternative techniques critial to living
independently. So, I think cost of services is higher because
blind clients receive these services more frequently than other
VR consumers.
With respect to job placement services, other disability
groups are twice as likely to receive job placement services.
When I was a VR counselor, job placement services were provided
by the rehabilitation counselor and were not included in cost
of services. So, I think differences in costs can be explained
by the types of services received.
Mr. Matsui. Thank you, I appreciate that response. Mr.
Gashel, how is your building coming along?
Mr. Gashel. We are making good progress. We have raised
about $3.5 million, but we have got to raise $18 before we--
Mr. Matsui. You are moving along, anyway. It is coming
along.
Mr. Gashel. Yes, we are.
Mr. Matsui. Congratulations.
Mr. Gashel. Thanks for asking.
Mr. Matsui. The unemployment rate among the blind is, what,
75 percent?
Mr. Gashel. Seventy-four percent.
Mr. Matsui. I want to ask a two-part question. If you raise
the earnings limit and eliminate it completely, do you have any
estimates what the unemployment rate would be for the blind?
And, secondly, if you raised it to $17,000, do you have an
estimate or studies that would indicate what the unemployment
rate for the blind would be? Maybe you don't.
Mr. Gashel. I think it would be a guess, but we are talking
about 100,000 beneficiaries who would be the target group, and
all of them are receiving benefits now, very few of them are
working, as we have heard today. So, what you are trying to do
is attract as many of them as possible into the workforce.
There are probably only about 30,000 blind people who are
earning above the earnings limit, according to the information
that we have assembled, so you are not going to add that many
beneficiaries to the rolls, and it would be a great trade-off
to attract, you know, 50,000 of these people, or even 30-40,000
of these people into the workforce who are not now paying in.
Now, if you figure--we could do the math sometime--but if
you figure that those people are going to earn, say, average
incomes of $25,000, they are going to pay taxes when they earn
that money. Right now, they are just drawing benefits.
So, I think this is a great way for the program--just like
seniors--to pay for itself.
Mr. Matsui. Thank you, all of you.
Chairman Shaw. Mr. Collins.
Mr. Collins. You heard Dr. Daniels talk about a
demonstration project. My question is going to be aimed at her
comment, and the question is, what change would be better, a
higher SGA or no ``cliff``, and that is open to all.
Mr. Gashel. I would like to try first. I will go for it,
Mr. Collins. Well, probably both. I think this is really an
analogous situation to seniors, I hope that comes through. With
seniors, you know, there was no cliff for a long time, and even
a 2-for-1 offset wasn't considered enough of a work incentive,
and so then they went to a 3-for-1 offset and that wasn't
considered enough of a work incentive, and so now it is no
limit.
I don't know why it would be any different for blind
people, but some people have talked about a 2-for-1 offset.
Well, that would be one way to look at it, or maybe a 3-for-1
as was done for seniors.
I certainly think that the threshold has to be higher.
$11,000 wasn't a good enough threshold for seniors, and so now
it is $17, and it will be nothing. So the threshold clearly has
to be a lot higher than it is to help people get into the
workforce. Average incomes are about $25,000, entry level
incomes. Now, different jobs, of course, have different entry
level incomes, but I think you have got to get above $25,000
for an entry level job to encourage people to enter the
workforce.
Mr. Collins. Anyone else want to tackle that one?
Ms. Wilson. I wanted to make a comment on that, if I could.
In my roomful of students last Tuesday, they all unanimously
agreed that they were afraid to go off of Social Security
Disability because they basically do not trust the system.
Don said, ``I would be afraid to go off of it even though
there are some of these incentives because I don't want to face
Mrs. King, my Social Security worker again, she was just awful,
and I don't want to get entrenched--have to deal with that
system anymore than I do''.
Fifteen years ago when we started the Louisiana Center for
the Blind, we got a Social Security demonstration grant to
prove some of the things that I think are, again, going to be
coming around to be proven, and some of those demonstration
grants have been going around for 15 years that I know of
straight up from Social Security. Nothing much is changing, I
think, because we are missing the point. We are going all
around it, but we are not hitting the real basics, and that is
the emotional thing.
I would love to see what blind people could really do and
really work if they really had the real incentives to do it. I
think we could change the whole way people view blindness.
Mr. Collins. If I understood you right then, you are kind
of from the old school--a bird in the hand is worth two in the
bush--stay on Social Security to keep from wrestling with the
system itself, and the fear of losing income totally. Is that
the way I interpret it? Ms. Gillis?
Ms. Gillis. For me, in order to replace my benefit, I would
have to secure a job for $35,500 a year. Those jobs are few and
far between in Martin County. The entry level jobs there start
at $23,000 a year, and I would need to work at a $35,500 a year
level just to break even with where I am presently at. So that,
to me, is scary. At that level, even if I broke even, I am
still in the position I am in now where there are no extra
dollars to augment my eventual retirement. And the scariest
part of this, in my mind, is when I turn the magic age of 65
and my benefits all convert over, my benefits will be so
reduced, my pension with the church which is $292 now will be
reduced to $63. I don't know what Social Security will do with
the $933 a month benefit, but I bet you it will be at least
half of that, and that is a scary thing. And then what is my
employment outlook when I am 65 and blind, when I get to that
age, even though there is no limit, I will have been out of the
workforce for almost 30 years. So that concerns me.
Mr. Collins. Thank you very much.
Chairman Shaw. Mr. McCrery.
Mr. McCrery. Ms. Gillis, would you explain to us why it
would take a $35,000 a year job to replace what you are getting
from Social Security?
Ms. Gillis. With the additional expenses that I incur to go
back to work--well, first of all, the taxability of the income.
Presently, I pay tax on one-half of the $933 a month I receive
for myself, and pay no income tax on the $498 I receive for my
dependent son, and I pay tax on 100 percent of the $292 of
1099-R income on my tax return. When you factor in the
difference of the taxability of the income, in itself, when I
go back to work and my income is all earned income, that is all
subject to taxes. So that is part of the problem.
I would have additional expenses that I would need to incur
to secure the adaptive technology, the equipment, the
maintenance thereof, the transportation, child care, the list
goes on and on, all the incidentals associated with leaving my
home and going back into the workforce.
Mr. McCrery. Anything else? You are not counting loss of
medical benefits, are you?
Ms. Gillis. Yes, the medical benefits, as well, Medicare. I
am sorry.
Mr. McCrery. But you know you would continue to receive
Medicare for nine years after you broach the earnings limit.
Ms. Gillis. Right, and I would have to get additional
medical insurance as well, yes.
Mr. McCrery. Within that nine-year period, yes, you would
have to obtain other medical insurance, but your medical
benefits would continue even after you lost your cash benefits
under current law, do you know that?
Ms. Gillis. I do now, sir. I am not an expert.
Mr. McCrery. I thought you might have been counting that in
your estimate, and it doesn't exactly fit as neatly as that.
Ms. Wilson came to my office about a month ago and brought
with her a group of about 15 blind individuals, and we talked
for about an hour about this subject, and Ms. Wilson knows that
I disagree with Mr. Gashel and Ms. Wilson on severing--I mean,
on doing away with any earnings limitation for the disability
program under Social Security. So, I am over that hurdle with
Ms. Wilson. I haven't talked with Mr. Gashel about it.
I really believe, in brief, that the disability program
under Social Security is completely different from the earned
retirement benefits under Social Security, and I really think
it is apples and oranges.
The incentives are the same, yes, I agree with that, and
certainly, as Ms. Gillis has pointed out, if we keep this very
low limit as a cliff, it serves definitely as a disincentive
for people to work, no doubt about that. And I, and I think
other members of this Subcommittee, would like to do something
about that. I don't think the right thing to do, though, is
just to say there is no earnings limit. That, as GAO testified,
just fundamentally changes the purpose of a disability program
under Social Security.
For example, if you have a blind individual who makes
$100,000 a year, it doesn't make sense for him to receive
disability benefits from the government, from the taxpayers.
And you say, okay, $100,000--well, $80,000--$50,000--you know,
where do you stop? I don't know. But I do think there is a need
for an earnings limit when somebody has demonstrated an ability
to earn enough clearly to take care of his needs, his family's
needs, then the taxpayers don't need to supplement that.
But I think this issue of a cliff is something that we need
to look at. I think that is the most detrimental part of this
whole system. Ms. Gillis already testified, gosh, she has got
to be very careful to not make just over that limit because, if
she does, boom, she loses everything except her medical
benefits.
So, I think one of the most important things we could do,
Mr. Chairman, is to smooth out that cliff, to provide a slope
so that Ms. Gillis doesn't have to watch everything so closely
for fear of losing everything. She can smoothly transition into
that slope and not have to be so precise about counting every
penny, and I think that would be a big help.
I would like to raise the earnings limit and I think Dr.
Cavenaugh has done this Subcommittee some service in pointing
out some of the underlying rationale for the difference in
treatment between blind disabled and nonblind disabled and, Dr.
Cavenaugh, I appreciate your giving us those statistics which I
think bolster the argument for separation of the two.
So, with that, Mr. Chairman, I see my time has expired. I
appreciate your giving me the time, and thank all the witnesses
for your testimony.
Chairman Shaw. Mr. Hulshof.
Mr. Hulshof. Thank you, Mr. Chairman. Dr. Cavenaugh, in the
interest of full disclosure, I have a degree from the
University of Mississippi and, as you know, there is the
intense rivalry between Ole Miss and Mississippi State. So, if
you promise not to hold it against me, I promise not to hold it
against you.
Dr. Cavenaugh. You know what we do when we say the prayer
at Mississippi State, do you know how we respond?
Mr. Hulshof. How is that?
Dr. Cavenaugh. Go to hell Ole Miss. We really don't mean
it.
Mr. Hulshof. I will resist the urge to respond in kind.
Dr. Cavenaugh. Well, actually, we have stopped saying the
prayer, so it doesn't happen anymore.
Mr. McCrery. We do the same thing at LSU, for that matter,
so, Hulshof, you are in bad company here.
Mr. Hulshof. I feel outnumbered by other SEC teams, but I
do want to ask you just quickly, because we are also being
called for a vote, in looking over your study, you mention
that, or your conclusions that the cost of VR services for
those legally blind are more than twice that of VR services for
people with other disabilities, and I want to ask, does that
category of other disabilities include people that are not on
the Disability rolls?
Dr. Cavenaugh. Yes, it does. There are people who are
served in the State-Federal program who are not on the
Disability rolls.
Mr. Hulshof. Is that a fair comparison, because wouldn't
you expect VR costs--and you have worked in VR, as you
mentioned--wouldn't you expect VR costs to be lower for people
who are not disabled enough to qualify for Disability benefits?
Dr. Cavenaugh. Absolutely.
Mr. Hulshof. We talked about, with the previous panel, that
the SGA limit for those who are blind is about 67 percent
higher for those with other disabilities. I assume your
research findings justify that disparity?
Dr. Cavenaugh. The disparity that--I am sorry, I didn't
hear.
Mr. Hulshof. Does your research--do you agree that is an
appropriate--
Dr. Cavenaugh. What is an appropriate?
Mr. Hulshof.--that there is a 67 percent higher SGA limit
for the blind as opposed to those that are other individuals
with disabilities?
Dr. Cavenaugh. Do I agree with the higher SGA level for
blind people?
Mr. Hulshof. Yes, ma'am.
Dr. Cavenaugh. The data seem to indicate yes.
Mr. Hulshof. What about, as Dr. Daniels mentioned for us,
that any individual who is disabled can actually earn more than
the SGA limits and still stay eligible because they can
subtract work expenses that are related to their disability in
determining the earnings subject to the limit. I mean, the fact
that we are trying to help provide a deduction or subtraction
of work-related expenses. Including that, does that also
continue then to justify this disparity between individuals who
are blind and those disabled who are not blind?
Dr. Cavenaugh. Yes, I would think so. And I think my
reasoning is, are we talking about those work-related expenses
through Schedule A? You are talking about the IRS deductions?
Mr. Hulshof. Yes.
Dr. Cavenaugh. You have to make it first, and using
Schedule A precludes people from taking the Standard Deduction,
so I think there continues to be real problems. In response to
your question regarding non-recipients, I could select out
those VR clients receiving SSI or SSDI and I compare cost of
services for blind persons versus consumers with other
disabilities. I would expect similiar results to those I have
reported.
Mr. Hulshof. Mr. Chairman, I know we have got this vote on,
so I yield back my time.
Chairman Shaw. Mr. Gashel, are you aware of a proposal that
was in the President's budget to exempt the disabled employees
and the sheltered workshops from receiving Social Security
credits to withholding of FICA? I would like you to comment on
that because I think it is important that everybody who is
working continue to build up Social Security credits that will
help them when they reach retirement.
Mr. Gashel. Well, I agree with that, Mr. Chairman, and I
think it is an outrageous proposal. I honestly don't know where
it came from, but I can see some of the workshops that employ
the disabled might want to exempt themselves from coverage
under the--with FICA, paying into Social Security, because a
lot of the people might be getting Supplemental Security Income
anyway, but it is outrageous to end up denying people Social
Security coverage.
It is kind of like, in our case, we get paid the sub-
minimum wage in these workshops, too, which again is
outrageous. So, I think that what we have got to do is look at
blind and disabled people more along the lines of the way we
look at other workers in this country, including seniors. We
want people to work and we want them to earn as much as they
possibly can, and we want them to earn Social Security credits.
I think this proposal might end up having to come to this
Subcommittee--I am glad you brought it up because I hope you
don't approve anything like this.
Chairman Shaw. I am also concerned about the fact that so
many of these sheltered workshops do not pay minimum wage. It
is something that has come up in my office in talking with some
of the blind representatives. Chris Cox brought it up to me. I
see she is in the audience today. She brought it up to me in
the office sometime ago. And it is something I would like to
look into.
Do we have any data--and I address this to any of the
witnesses at the table here--do we have any data as to what
effect that would have on the employment of the blind within
the workshops, if we were to do away with that exemption and
provide that the workshops pay minimum wage just like everybody
else?
Mr. Gashel. You are going to have trouble believing this,
but according to the people that pay the sub-minimum wages,
there are only 150 blind people, nationwide, that are paid less
than the minimum wage. So, really, we are talking almost
academics here. It is close enough for government work to pay
everybody at least the minimum wage.
Chairman Shaw. Yes, but I think it is insulting. I think it
is insulting.
Mr. Gashel. It is absolutely insulting. And so the impact
would be 150 people. The guy who runs the workshop umbrella
called National Industries for the Blind, is paid $200,000 a
year, which is as much as the President. And I have said, you
know, at a salary like that, he ought to be able to figure out
a way to bring 150 blind people up to at least the minimum
wage.
Chairman Shaw. I think you just figured out a way to do it.
Mr. Gashel. I hope so.
Chairman Shaw. Well, we do have two votes on the Floor,
which is going to take us away, so I am going to recess until
1:00 o'clock. It is now a quarter after 12:00. We will come
back at 1:00 o'clock. That will give everyone a chance to take
a little break and have lunch and be back here. This panel is
excused, we have completed, and we are down now to the final
panel. Thank you. And I want to thank all you witnesses. Ms.
Gillis, I was particularly impressed with your comment that to
walk in your shoes. I think that we should pay heed to that and
do that.
Ms. Gillis. Thank you.
Chairman Shaw. Thank you for being here.
[Recess.]
[Questions submitted by Chairman Shaw to Ms. Cavenaugh, Mr.
Gashel, Ms. Gillis, and Ms Wilson, and their respective
answers, follow:]
Brenda Cavenaugh, Ph.D.
Rehabilitation Research and Training Center on Blindness and Low Vision
P.O. Box 6189
Mississippi State University, MS 39762
Dear Dr. Cavenaugh:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following questions:
1. Individuals who are disabled, including those who are blind, can
actually earn more than the SGA limits and stay eligible for benefits.
The reason is they can subtract work expenses related to their
disability in determining earnings subject to the limit. (For example,
if a person who is blind earns $1,500 per month but has $500 in work
expenses, their SGA is $1,000--below the $1,170 limit.) Are you
familiar with the provision? Is it being used? How many individuals who
are blind take advantage of these deductions? Is it effective? Should
it be changed?
2. Your analysis of the costs of vocational rehabilitation services
compares the costs of blind individuals with the costs of individuals
with other disabilities. Do all of these blind individuals meet the
definition of statutory blindness used by Social Security? Do all of
the individuals with other disabilities have impairments that are
severe enough to qualify for Social Security disability benefits? If
you compared the costs of only those blind individuals who qualify for
Social Security with those individuals with other disabilities who
qualify for Social Security disability benefits, what would be the
difference in these costs?
I thank you for taking the time to answer these questions for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
Honorable E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
House of Representatives
Washington, DC 20515
Dear Congressman Shaw:
Thank you for the opportunity to further respond to your questions
regarding work incentives for Social Security Disability Insurance
(SSDI) beneficiaries who are blind.
In response to questions regarding my analysis of the costs of
vocational rehabilitation (VR) services:
Legally Blind consumers are those with ``center visual
acuity 20/200 or less in the better eye with best correction or widest
diameter of visual field subtending an angle of no greater than 20
degrees.'' All blind individuals used in this analysis as reported in
my March 23, 2000 testimony meet the definition of statutory blindness
used by Social Security.
Although the Rehabilitation Services Administration
database used in this analysis does not include direct data indicating
if VR consumers have impairments severe enough to qualify for SSDI, it
does include information indicating if individuals received SSDI at
application, at closure, or at any time during the VR process. With the
expectation that an analysis of this specific population of SSDI
beneficiaries would be helpful in answering your questions, I am
attaching findings from this analysis.
Based on an extensive search, I have not found any
research that has shown that costs of VR services for those who qualify
for SSDI are significantly different from those reported in my
testimony of March 23, 2000 or in the enclosed attachment.
With respect to your other questions regarding work-related
expenses:
Although SSDI and Supplemental Security Income (SSI)
beneficiaries can deduct Impairment Related Work Expenses (IRWEs) in
determining earnings subject to SGA limits, an extensive review of the
literature revealed no empirical data on the use of IRWE's by blind
recipients. My personal experience has been that blind individuals are
generally unaware of work-incentive provisions, such as IRWE, the Trial
Work Period (TWP), and the Extended Period of Eligibility (EPE).
Dr. John Hennessey, Office of Research and Statistics,
Social Security Administration, has authored several publications
focusing on factors (e.g., work incentives, job accommodations, VR,
age, sex, race, and marital status) that Honorable E. Clay Shaw, Jr.
affect the ability of SSDI recipients to sustain their work effort. In
addition, researchers at the Rehabilitation Research and Training
Center (RRTC) for Economic Policy for People with Disabilities, Cornell
University, have investigated earnings and program participation rates
of SSI recipients. You may want to contact Dr. Suzanne Bruyère,
RRTC Director, at (607)255-7727 for information on related ongoing
studies. My review indicated that neither of these sources reported
findings on utilization of IRWE's across disability groups.
Please, do not hesitate to contact me it you have further
questions. My telephone number is 662-325-2001. I can also be contacted
by e-mail at [email protected].
Sincerely,
Brenda S. Cavenaugh, Ph.D., CRC
Research Director
Analysis of State-Federal Vocational Rehabilitation Data
The Rehabilitation Act of 1973, as amended, authorizes the
allocation of federal funds on a formula basis to the states
and territories for the administration and operation of a
vocational rehabilitation (VR) program to assist individuals
with disabilities in preparing for and engaging in gainful
employment. State VR agencies provide a wide range of services
(e.g., physical restoration, counseling and guidance,
vocational training, maintenance, job referral, job placement,
rehabilitation engineering, assistive technology) to assist
people with disabilities in becoming employed. VR program data
were derived from the 1998 Rehabilitation Services
Administration (RSA) 911 National data base. All cases exiting
from the VR program from the 50 states and the District of
Columbia were used in the analysis.
Consumers Accepted for Service and Exiting VR program after
Individualized Plan for Employment Initiated (Includes both
``rehabilitated'' and ``not rehabilitated'' closures)
----------------------------------------------------------------------------------------------------------------
All Consumers SSDI Recipients*
----------------------------------------------------------------------------------------------------------------
Total Served.......................... 359,913 53,416
Legally blind consumers............... 14,732 4,229
Consumers with other disabilities..... 345,181 49,187
----------------------------------------------------------------------------------------------------------------
Consumers Exiting VR program ``Rehabilitated'' with Competitive
Employment Outcomes--includes competitive, self-employment, or
state-agency-managed business enterprise (BE) work statuses
----------------------------------------------------------------------------------------------------------------
All Consumers SSDI Recipients
----------------------------------------------------------------------------------------------------------------
Competitive Employment Outcomes....... 212,082 25,123
Legally blind consumers............... 5,201 1,774
Consumers with other disabilities..... 206,881 23,349
----------------------------------------------------------------------------------------------------------------
Service Intensity Variables (computed for consumers with
competitive employment outcomes)
----------------------------------------------------------------------------------------------------------------
All Consumers SSDI Recipients
----------------------------------------------------------------------------------------------------------------
Mean Cost of Services.................
Legally blind consumers............... $8,184 $9,052
Consumers with other disabilities..... $3,486 $4,767
Mean Number of Services...............
Legally blind consumers............... 6.0 6.7
Consumers with other disabilities..... 4.5 4.7
Mean Duration of Services (Yrs.)......
Legally blind consumers............... 4.0 3.8
Consumers with other disabilities..... 3.0 3.1
----------------------------------------------------------------------------------------------------------------
Disability by Mean Cost of Services
----------------------------------------------------------------------------------------------------------------
All Consumers SSDI Recipients
----------------------------------------------------------------------------------------------------------------
Deaf-blind (n = 166).................. $8,602 $10,179
Legally blind (n = 5,201)............. 8,230 9,076
Orthopedic conditions (n = 44,229).... 4,608 7,212
Genitourinary system (n = 2,249)...... 4,557 4,300
Visual impairments, not legally blind 4,418 6,970
(n = 5,242)..........................
Neoplasms (n = 846)................... 4,404 4,278
Traumatic brain injuries (n = 3,990).. 4,393 5,877
Allergic endocrine, nutritional 4,112 4,315
diseases (n = 3,557).................
Hearing impairments (n = 15,458)...... 3,761 5,216
Speech impairments (n = 591).......... 3,682 5,999
Respiratory conditions (n = 787)...... 3,492 3,264
Diseases of the blood (n = 4,524)..... 3,204 3,252
Mental and emotional conditions (n = 3,155 3,833
85,265)..............................
Digestive system conditions (n = 3,111 3,483
3,345)...............................
Cardiac and circulatory conditions (n 2,920 4,043
= 3,537).............................
Nervous system disorders (n = 23,961). 2,688 3,933
----------------------------------------------------------------------------------------------------------------
References
Cavenaugh, B. S. (2000). [Analysis of Rehabilitation
Services Administration R-911 National Data, Fiscal Year 1998].
Unpublished raw data.
Cavenaugh, B. S. (2000). [Analysis of National Telephone
Survey on the Employment Status of Blind Persons]. Unpublished
raw data.
Mr. James Gashel
Director of Government Affairs
National Federation of the Blind
1800 Johnson Street
Baltimore, MD 21230
Dear Mr. Gashel:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following question:
Individuals who are disabled, including those who are blind, can
actually earn more than the SGA limits and stay eligible for benefits.
The reason is they can subtract work expenses related to their
disability in determining earnings subject to the limit. (For example,
if a person who is blind earns $1,500 per month but has $500 in work
expenses, their SGA is $1,000--below the $1,170 limit.) Are you
familiar with the provision? Is it being used? How many individuals who
are blind take advantage of these deductions? Is it effective? Should
it be changed?
In your testimony, you indicate that one reason to increase the SGA
limit is because of work-related expenses which make it less profitable
to work. However, aren't work-related expenses excluded from the SGA
limit?
I thank you for taking the time to answer this question for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 18, 2000
The Honorable E. Clay Shaw, Jr., Chairman
Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
Thank you for your letter of April 26, 2000, including questions
resulting from our recent hearing. I certainly appreciate you
continuing interest in this matter as well as the opportunity to
respond to the additional questions.
You ask if I am aware of allowed deductions for disability-related
work expenses, how many blind people take advantage of these
deductions, and whether the law should be changed. To answer the last
question first, I certainly think the law should be changed. In the
rest of this letter I will explain why.
According to the Social Security Administration, 120,000 blind
persons receive disability insurance benefits. I saw an official
estimate several years ago that about eleven percent of beneficiaries
who are blind have earnings. This means that approximately 13,200 blind
people work while continuing to receive benefits. Based on my
experience, I would estimate that about 40 percent, or 5,300, claim
impairment-related work expenses.
This means that 89 percent of blind beneficiaries don't work. Of
those who do, the majority still don't claim impairment-related work
expenses. Therefore, this is not a significant work incentive. At best,
it only serves to compensate a few people for some of their work-
related costs.
For the blind, I think there are several reasons why this deduction
is not effective as a work incentive. Most work expenses cannot be
counted. For example, the cost of transportation to and work does not
count, since the Social Security Administration does not consider
taking the public bust to be blindness-related. Costs that may relate
to impairments, other than blindness, don't count if eligibility is
based on blindness. Costs that are paid by an employer don't count
either. So, the result is that most work-related expenses really don't
count.
Also, the application of this deduction is very discretionary with
the Social Security Administration. Therefore, beneficiaries are left
with considerable uncertainly as to whether a particular deduction will
be allowed or disallowed. No process for reliable and consistent
advance determination exists.
Work incentives are only effective if they as seen as clearly
addressing and favorably resolving perceived penalties. It is a
fundamental principle that beneficiaries will not use what they cannot
understand or do not trust. This-in addition to the narrow scope of the
allowed deduction itself-is the primary reason why only a small
minority of blind beneficiaries claim deduction for impairment-related
work expenses.
I believe these comments provide answers to you questions about
impairment-related work expenses, although no necessarily in the order
of the questions themselves. The following comments will address you
final question, which is: ``Aren't work-related expenses excluded from
the SGA limit?'' The answer is ``no.'' Only impairment-related work
work expenses are excluded.
In one of her responses to a question during the hearing, Deputy
Commissioner Susan Daniels said that all ordinary work expenses can be
deducted from gross earnings for blind people. However, Dr. Daniels
either misspoke or was confused. In either case her information was
factually incorrect. This demonstrates the problem. If officials of the
Social Security Administration cannot accurately explain the deductions
that all allowed and not allowed, how can claimants be expected to know
where they stand?
This is really the underlying problem which why work incentives are
not used. They are just too complex for beneficiaries or their
advocates to understand and for Social Security personnel to
administer. As long as there are penalties to working and there is no
certainty as to whether they will or will not be applied, beneficiaries
will choose security over work.
I hope this information will be useful to you in your further
deliberations on this issue. Please not that a letter (copy attached)
which I sent to you after the hearing provides further information to
consider. Essentially this letter explains that extra expenses were not
used to justify the higher SGA level for the blind. In view of your
questions, I though it might be helpful to include this explanation
with this response.
Very truly yours,
James Gashel
Director of Governmental Affairs
NATIONAL FEDERATION OF THE BLIND
JG/mrb
Attachments
March 27, 2000
The Honorable E. Clay Shaw, Chairman
Subcommittee on Social Security
Committee on Ways and Means
House of Representative
Washington, D.C. 20515
Dear Mr. Chairman:
I am writing to provide additional information for the Subcommittee
in light of testimony given at the March 23, 2000, hearing on work
incentives for blind and disabled persons.
(1) There appears to be an assumption that the blind SGA law
enacted in 1977, was based anticipated higher costs resulting from
blindness. This is an important issue. Extra costs were not the basis
for the higher SGA. I know this. I was present when Mr. Archer first
expressed the idea that the earnings exemption threshold should be the
same for the blind as it was for seniors, and I heard every word he
said to explain this position.
The blind SGA law was an Archer amendment offered in conference in
lieu of a Senate amendment which called for a complete removal of the
earnings limit for the blind. The legislative history on this amendment
consists solely of the discussion which occurred among the conferees
who were meeting to reconcile the differences in the Senate- and House-
passed versions of the 1977 Social Security financing bill.
Mr Archer propounded the provision which became law when the House
confesses refused to go along with the Senate position. He was asked
directly for the rationale of treating blind people differently from
persons with other disabilities. His explanation did not include extra
costs as the basis. He relied instead on the fact that blindness has
its own definition apart from disability.
Mr. Archer said that determining the inability to work was not at
issue in applying the definition of blindness. As he explained it, he
viewed the legal status of the blind as similar to reaching age-65 in
that both conditions are clearly defined. He contrasted this with
disability and explained that the inability to perform SGA was at the
heart of the definition, unlike blindness.
I was presented in Mr. Archer's office in January, 1995, when the
subject of blindness, disability, and the earnings limit again arose.
Valerie Nixon of the Subcommittee staff was also present. When Ms Nixon
presented the view that blindness and disability are essentially
equivalent, Mr. Archer returned to the same explanation he gave in
1977--that blindness is defined apart form disability, and the ability
to work is not at issue.
I am not suggesting that Mr. Archer currently believes in removing
the earnings limit for the blind. Apparently he does not, even though
he expressed the desire to do so in 1977. My point is that Mr. Archer's
reasoning for the blind SGA law had nothing to do with an excess cost
justification. It was solely based on the view that--with blindness
being defined--the payment or denial of benefits is really a pure
earnings limit question.
The GAO questions the extra cost justification, but extra costs
were not the justification. The assumption that they were seems to come
from statements made by Senators on the floor when the amendment to
remove the earnings limit for the blind was passed. I acknowledged that
Senators may have attempted to cite extra costs, but their position did
not prevail in the end. Mr. Archer's position that blindness and
retirement age are defined, and an identical exemption of earnings
would be appropriate, did prevail. This is an important distinction to
make in giving further consideration to the blind person's earnings
limit.
(2) The GAO has failed to acknowledge that major costs relating to
disability, such as supported employment and extra medical expenses,
are often covered by federal or state programs. The record should be
clear on this in the interest of accuracy, even though ``whose costs
are higher'' was really not Mr. Archer's rationale in the first place.
(3) Dr. Daniels testified that expense deductions used to reduce
gross earnings and determine SGA are different for the blind as
compared to the disabled. She said that all reasonable work expenses
can be deducted for the blind and only impairment-related work expenses
can be deducted for the disabled.
This statement is incorrect. The work expense deducted for the
blind and disabled is identical in the Disability Insurance program.
Only impairment-related work expenses (more common for disability than
for blindness) can be deducted. There is a difference in the deduction
of expenses in the SSI, title XVI program, but that would not be
relevant to SGA evaluation under title II.
(4) Concern was expressed that raising or eliminating the earnings
limit altogether would change the nature of the Disability Insurance
program. There is no question that the program would be changed, but
the change would be essentially the same as removing the earnings limit
at retirement age. With the removal of the earnings limit at age 65,
the original purpose of the retirement program has now been changed.
Before this change (and particularly before other changes made more
gradually over the years), benefits were paid if a person actually
retired-that is, stopped working.
The earnings limit was called the ``retirement test.'' Anyone who
continued to work beyond certain limits applied to earnings and amount
of services performed was not ``retired'' and not eligible for
benefits. The purpose of Social Security was partially to replace
earnings lost due to retirement.
The concept has been changed altogether in the current program with
no earnings limit. Benefits are not paid to anyone who reaches
retirement age, regardless of whether or not the person retires. The
same thing could be done in the case of blindness, since blindness is
already defined as an eligibility condition. It is only the earnings
limit that prevents actual payment of cash benefits and results in a
severe work disincentive.
Thank you for the opportunity to present this additional
information. The NFB is anxious to assist you on legislation to reduce
the disincentive of the earnings limit.
Very truly yours,
James Gashel
Director of Governmental Affairs
NATIONAL FEDERATION OF THE BLIND
April 26, 2000
Ms. Brenda Gillis
c/o Kristen Cox
National Federation of the Blind
1800 Johnson Street
Baltimore, MD 21230
Dear Ms. Gillis:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following questions:
1. In your opinion, what is the role and purpose of the Disability
Insurance program? Do you believe it is successful in achieving its
purpose? What changes would you make?
2.Individuals who are disabled, including those who are blind, can
actually earn more than the SGA limits and stay eligible for benefits.
The reason is they can subtract work expenses related to their
disability in determining earnings subject to the limit. (For example,
if a person who is blind earns $1,500 per month but has $500 in work
expenses, their SGA is $1,000--below the $1,170 limit.) Are you
familiar with the provision? Is it being used? How many individuals who
are blind take advantage of these deductions? Is it effective? Should
it be changed?
I thank you for taking the time to answer these questions for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 17, 2000
The Honorable E. Clay Shaw
Committee on ways and Means
United States House of Representatives
Washington, DC 20515
RE: Re: SSDI Program Inquiry
Dear Congressman Shaw:
In the words of Social Security's own publication, ``Understanding
the Benefits,'' the agency states, ``. . .the disability is one of the
most complicated of all Social Security programs.'' We can certainly
agree on this point. Throughout this publication an SSDI recipient is
instructed to request publication after publication from their local
office for additional information. However, the ``bible'' for disabled
persons who wish to work is publication 05-10095, ``Working While
Disabled . . . How We Can Help.'' The best part is that it only takes
several months, countless phone calls and four to six weeks for mailing
to obtain this ``additional information,'' only to discover that if you
are disabled due to blindness you require an additional booklet. These
are the moccasins I told you about on March 23, 2000.
You have asked in your letter for me to tell you if I understand
the purpose of the SSDI program and if I believe it is presently
meeting its intended purpose. It is my opinion that the ultimate
purpose is to provide financial security for individuals faced with
life changing circumstances who are looking for a hand up, not a hand
out. However, because of the reasons I have outlined below I do not
believe the program is meeting it's intended purpose. Allow me to ask
you to once again place yourself in my moccasins. Unlike the SSI
program, SSDI is an insurance program for which I am eligible because I
had worked in the past, paid into the system, and have qualified to
have my contributions repaid to me in an amount determined by the
credits earned. SSDI is not a gift of the Federal Government bestowed
upon a disabled person because you want to help out; it is something I
have earned.
Social Security representatives at a local level have demonstrated,
in my opinion, that they know less about this program and how it
pertains to blind workers than do I, the lay person. As a matter of
fact, when I first applied for benefits they were denied because SSA
failed to read the entire definition of ``legal blindness'' and this
oversight delayed the start of my benefits by more than three months.
Furthermore, I feel that our panel efficiently demonstrated to the sub-
committee that blindness in and of itself is a unique condition that is
easily defined.
When I was declared legally blind and began to receive my benefits,
I was finally in a position where I could learn the new skills required
to re-enter the workplace without fear of financial hardship. The first
step was to obtain these new skills and the adaptive equipment and
software that would make my ``rehabilitation'' possible. The Division
of Blind Services (DBS), the Florida state agency in place to assist
blind persons to this end, was my sole source of information and
assistance. Because I desired to operate my own business, DBS was able
to provide me with the adaptive technologies I would require to achieve
this goal. Once I demonstrated that I was earning money, my case was
closed and I was left to my own devices to become self-sufficient.
After doing a little homework, I learned about earnings limits,
reporting requirements and how they would affect my benefits. One of
the requirements is to report to SSA my earnings during the ``trial
work period.'' At the end of the first month I called the local Social
Security office and no one seemed to know what it was I was attempting
to do nor did they seem to have a clue as to what form should be
utilized. I was told they would make a note of my comments and there
was no need for me to contact them again citing that the forms I needed
would be sent to me in the mail. When my first year of operation had
concluded and still no forms had arrived, I contacted Social Security
again to report my work activity. Again I was simply told they would
make a note in my file and they refused my offer to fax over my balance
sheet and profit & loss statement for the year. This did not agree with
what I had read in the SSA publication. Not knowing where to turn (if
the supervisor was instructing me in this manner) I determined to
follow the local office's instructions. This situation has not changed
at any point during the past five years my business has been in
operation. At this point I have assumed that when SSA finally gets
around to reviewing my status in seven years, I will at that time be
expected to produce my shoebox full of receipts and paperwork.
Therefore, I look at the whole program and its requirements as being
far too burdensome for the beneficiary. There is no systematic and easy
method to report qualifying deductions, changes in income, and
impairment related work expenses.
The reality for most blind individuals is that they will be worse
off financially by working as compared to receiving SSDI benefits. The
financial loss creates a persuasive work disincentive. Let's say for
the purpose of discussion that instead of operating my own business, I
had opted to go to work for ABC Distributors making $24,000 per year.
The Division of Blind Services would provide to me the adaptive
technology I required, supply a personal employment consultant to
integrate the adaptive technology into my work situation and coach me
on how to improve my productivity. The agency then closes my case and
deems me rehabilitated. However, the time and energy that has gone into
securing my employment, (paid for by the tax payers) it is likely that
I would be worse off financially. This is true because the minute I
earn over $1,170 per month gross I will lose all of my SSDI benefits.
Not only do I lose my benefits, but also I now will incur additional
expenses such as childcare and transportation specifically related to
my employment.
Furthermore, by working at ABC Distributors 100% of my income would
be taxable. Using a conservative tax rate of 25%, my net monthly income
would be approximately $1,500 per month. My SSDI benefits totaled
$1,715 per month. As you can see, I would net nearly 200 dollars less
by working than staying at home and collecting benefits. This is true
without considering the negative impact that work related expenses
would have on my net earnings (not to be confused with impairment
related work expenses). Let me also add here that it was pointed out to
me that the costs associated with medical insurance should not be part
of this equation as Medicare would still be available for nine years
after benefits are discontinued. What the Congressman failed to point
out is that an employed individual in this situation would have to pay
a premium for those benefits. So while they may be an option, there is
a definite cost associated to it. To complicate things further a blind
worker still endures lack of ``job security'' in the workplace. But
still we are grateful to have our jobs.
Now three years down the road the ABC Distributors Company decided
to change accounting software. I come to work one day to discover that
the screen reading software will not work with the new accounting
package and a major incompatibility has cropped up overnight. This is
not an uncommon scenario. I call the screen reader software
manufacturer and they send someone out to see if their product can be
adapted to function properly. In the best case I find myself unemployed
for two or three weeks while the problem is resolved and I have a
receipt of a hefty bill for their ``on site'' services. In the worst
case, a solution cannot be found and I am now on the unemployment line
again with that hefty bill still in hand. Under this latter situation,
I am by myself reapplying for SSDI benefits and the process would start
over again. A vicious cycle, wouldn't you agree?
As to your second question about ``impairment related work
expenses'' and whether I believe that blind persons take advantage of
them. Well, in my opinion based on my interpretation of the ``rules''
in this game, I truly believe that Ms. Daniels should read some of her
Administration's publications and clear things up in her own mind
before making blanket statements like those she made on March 23, 2000.
It is my opinion that Ms. Daniels, like many of the SSA employees, do
not fully understand the differences between the SSI and SSDI programs
offered to disabled persons. While many of the expenses she referred to
are ``deductible'' from the SGA under the SSI program, those same
deductions do not always pass the test for SSDI. As I understand it,
one can only deduct impairment related work expenses. If Mrs. Daniels
does not fully understand work incentive under the SSDI program, you
can imagine the confusion that exists among beneficiaries, like myself.
For blind individuals, there are so few impairment related work
expenses that one can legitimately deduct that they do not
significantly impact one's income. This may be a different scenario for
people who need full time attendant care or have other substantial
costs related to work and impairment. As I mentioned above there
doesn't seem to be an adequate way for the SSDI recipient to report
them even if they do exist. Do blind persons take advantage of the
``work incentive,'' as you like to call it? Well, the best answer I can
give you is we sure try like hell.
The confusing and abundant policies surrounding SSDI often result
in beneficiaries fearing the system itself. Blind people know that it
is not a matter of ``if'' SSA will send a letter outlining how we can
repay what they believe to be an ``overpayment'' of benefits--it's a
matter of ``when'' we will receive it. And, let me assure you that if
you opened your mailbox to find that you owe the federal government
tens of thousands of dollars, you would carefully consider if the
personal rewards and satisfaction you get from being employed is worth
the financial risk. In fact, I have heard from many of my blind friends
that even though they write and call SSA over and over to discontinue
benefits, should they land a really good job, the checks keep coming
month after month until that one day when the strong arm of SSA marches
in to collect it all back.
In closing, think about your many blessings. You are sighted, able
bodied and have a good job. Your life is not filled daily with the
challenges of living with blindness and the stereotypes associated with
your ``condition'' that you would experience each day you ventured out
into the general public. You enjoy the privilege of driving where and
when you want. You open your mailbox and go inside to read it, tossing
the junk out without even opening the envelope. There is no need for
you to invest thousands of dollars and countless hours learning new
skills simply to find the important items or wait until Saturday when
your neighbor has time to come over and read it all to you. What needs
to be done with SSDI and what it will cost, I leave to you the expert.
But I would make these two suggestions. First, create a system in which
blind beneficiaries are not worse off financially for working. This
primarily could be done by increasing the earnings limit to such an
extent that you demonstrate a genuine effort to afford the blind
community with a hand up not a hand out. Second, the SSDI system must
be simple and easy for the lay person to understand. I ask that you
stop the vicious circle of revolving through an endless stream of
employed, unemployed, in this agency and then out to another. The blind
community needs to have the opportunity to show the world blindness is
not something to be feared and that it ultimately, in this day and age,
has little impact on our ability to be productive and responsible
citizens. There is far too much to do in this country to ``Change What
it Means to be Blind'' and worrying about our financial security should
not be one of the battles we must fight. I sincerely hope we can count
on you to seek an appropriate solution and provide the blind citizens
of our Nation a real incentive to work.
Faithfully,
Brenda-Ann Gillis
Stuart, FL 34997
April 26, 2000
Ms. Joanne Wilson
Director
Louisiana Center for the Blind
101 South Trenton St.
Ruston, LA 71270
Dear Ms. Wilson:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following questions:
1. Individuals who are disabled, including those who are blind, can
actually earn more than the SGA limits and stay eligible for benefits.
The reason is they can subtract work expenses related to their
disability in determining earnings subject to the limit. (For example,
if a person who is blind earns $1,500 per month but has $500 in work
expenses, their SGA is $1,000--below the $1,170 limit.) Are you
familiar with the provision? Is it being used? How many individuals who
are blind take advantage of these deductions? Is it effective? Should
it be changed?
2. In your testimony, you ask why should a person who is blind have
to make the choice between work or becoming dependent on Social
Security benefits. You add that had these individuals been given an
opportunity to work, even at modest wages, and to keep their earnings
without loss of benefits, they would be contributing to and not drawing
support from the system. Are you saying that individuals should be
allowed to work and earn as much as they want, and still draw full
benefits for a certain time limit? Or are you saying there should be no
time limit, but individuals will choose to leave the rolls at some
point?
I thank you for taking the time to answer these questions for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 18, 2000
The Honorable E. Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Washington, D.C. 20515
Dear Chairman Shaw:
Thank you for your letter of April 26, 2000, concerning work
efforts of blind persons in the Social Security Disability Insurance
program. The information below is provided in response to your specific
questions:
1. You describe the policy of deducting disability-related work
expenses and ask several questions. I am, of course, familiar with this
policy. While the example you provide is plausible, it is far from
typical for blind persons. This is because the deduction is limited to
``impairment-related work expenses,'' excluding most costs that blind
people will pay when they work. For example, transportation to and from
work is often not deductible for blind persons because a specialized,
disability-related service is not needed.
I don't have access to statistics. However, I doubt that this
deduction is used very much. I say this because the ``if's,''
``and's,'' and ``but's,'' of the deduction are far too complex for most
people to understand or apply. When a person could be working with
gross earnings marginally above the SGA limit, there is usually a fear
of taking a chance. Beneficiaries have good reasons for not relying
upon what someone in the Social Security office might tell them.
Therefore, they have no way of knowing whether or not a particular
work-related expense deduction will be allowed or counted against them.
For this reason the law should be changed. If deductions are part of
the law, they should be straightforward, easy to understand, and not
discretionary with the Social Security Administration.
2. You ask if blind persons should be able to work and retain
benefits under a time limit, or whether they will leave the rolls on
their own without a time limit. My answer is that work should not be
penalized at any point. In other words, a policy that encourages work
should not be withdrawn or time-limited. If a beneficiary works, the
contributions made to the system are savings to the trust funds. The
continued payment of benefits for people who work has been adopted as a
policy for seniors. Frankly, I don't think the policy should really be
any different for the blind. If Congress does adopt a different policy,
however, it should clearly include a guarantee of not losing by
working.
I hope this information helps. Please contact me if I can respond
to any other questions.
Sincerely,
Joanne Wilson, Director
Louisiana Center for the Blind, Inc.
Chairman Shaw. This will be our final panel of the day. We
have David Gallagher, Social Security Beneficiary, from
Eastpointe, Michigan; William VanOoteghem, Father of Social
Security Beneficiary, from Essexville, Michigan, on behalf of
The Arc of the United States, and he is accompanied by Wendy
VanOoteghem, who is a Social Security Beneficiary. We have Dr.
Pamela Hanes, Associate Professor, Public Health and Preventive
Medicine, Oregon Health Sciences University, and Tony Young,
who is Co-Chair, Social Security Task Force, Consortium for
Citizens with Disabilities.
As with the other witnesses, we have your full statements
which will be placed in the record, and we would invite you to
proceed and summarize as you see fit. Mr. Gallagher.
STATEMENT OF DAVID E. GALLAGHER, SOCIAL SECURITY BENEFICIARY,
AND CONSULTANT, LIFE IN TIME CONSULTATION SERVICES, INC.,
EASTPOINTE, MICHIGAN
Mr. Gallagher. Thank you. Mr. Chairman and Members of the
Subcommittee, thank you for the opportunity to share my
testimony. This testimony is not just about me, but it is about
many people who are consumers of mental health services.
I was diagnosed as having manic depressive disorder in
February 1978. I have been hospitalized over 20 times since
that time. I have a Master's Degree in social work from Wayne
State University in Michigan, and I am currently working as a
peer counselor at Northeast Drop-In Center, a place for mental
health consumers to meet and receive services.
I am currently on Social Security Disability Insurance and
Medicare, but I also pay for Blue Cross/Blue Shield
Supplemental to pay for the things that Medicare does not pay
for. The cost of mental illness is staggering.
My medications alone cost over $1,000 a month for the
psychotropic medications, and another $49 a month for high
blood pressure medication. These costs are pretty typical for a
person with severe mental illness. I could not work without
these medications. In addition, I have chronic renal failure,
chronic bronchitis, I have had lymph nodes removed from my
larynx twice, I have had a history of seizure disorder, I have
had two mini-strokes, I am in need of extensive dental work, I
have glaucoma which affects my night vision.
Although I have worked from the time I was 15, because of
my mental illness I have not been able to work continuously at
full-time employment. In spite of my illness, I have had
periods where I have worked years at a time, but not always at
the same job. In between, I have been hospitalized because of
my illness. My current job as peer counselor is my longest
history of employment, but currently it is only part-time.
However, I could work more if I knew my benefits would not end
right away, and I could work at an income level above poverty
with full health benefits.
To be able to work full-time, I need full Blue Cross/Blue
Shield insurance. Managed care coverage is not adequate due to
the cost of medications and the need for mental health services
both of which are costly and extremely limited by almost all
health plans. Most importantly, medications are not covered by
Medicare or my Blue Cross/Blue Shield Supplemental insurance.
Another factor is because of our pre-existing conditions, most
health insurance providers will not extend us coverage.
Consequently, due to the lack of parity, we are forced into
continual dependency on Disability rolls. A key point I need to
stress is that I was taken off Social Security Disability
benefits after being on Disability for three years because
Social Security said I was gainfully employed. I was making
just $560 a month as a direct care staff person. This is not
gainful employment for a person who has a thousand dollar
prescription drug cost that no health plan pays for. Worse,
because I am currently paying back Social Security Disability
benefits because of the cost of my medication and because of
the cost of my medication I have to continue to be on Social
Security Disability. I am currently paying $100 a month to
Social Security Administration because they said I was overpaid
back when I was making $560 a month. I reported my earnings to
Social Security Administration, so I don't know why I have an
overpayment, but Social Security says I do.
These two issues, the restrictions on my earnings that keep
a person from earning above what they need to make in order to
live and the fact that consumers always feel that Social
Security is out to get them when we try to do work is enough to
keep people from doing the best they can do.
I do want to work, and so do many mental health consumers,
but we are unable to work above the poverty level without
losing our insurance benefits, then we have little choice but
to stay on the rolls. I hope, and all consumers hope, that
Congress fixes this program.
Honorable Chairperson, thank you for allowing me to speak.
Have a wonderful day.
[The prepared statement and attachment follow:]
Statement of David E. Gallagher, Social Security Beneficiary, and
Consultant Life in Time Consultation Services, Inc., Eastpointe,
Michigan (Social Security Beneficiary)
Thank you for the opportunity to allow me to share my
story. This testimony is not just about me, but it's about many
people who are consumers of mental health services. I started
out my journey with mental health when I was diagnosed as
having manic-depression in February 1978. I have been
hospitalized over twenty times since that time. My last
hospitalization was in 1995. I spent over 13 months in Clinton
Valley Center, a state hospital in Michigan. I was put in
Clinton Valley when my Blue Cross/Blue Shield ran out. My last
hospitalization was due to the fact that I had a blood clot in
my leg and I had to have a DVT. Also, I had neuroleptic
malignant syndrome, which caused my liver functions to fail and
my kidneys to go toxic. I was pronounced dead twice. I am
fortunate to be alive.
I have a family history of mental illness. My parents dealt
with the suicide of my maternal grandfather when I was an
infant. They were raised with a strong work ethic, they were a
byproduct of an agrarian agricultural life style and then
thrust into an industrial revolution. My father raised us as
practicing Roman Catholics. My parents' struggle to give their
three boys the best material things in life robbed them of
their serenity and ultimately produced a family of
overachievers. Throughout their heartache and pain they have
tried to understand and cope to the best of their ability. And
I love them for that.
By the time I graduated from high school, I was searching
and seeking hope. My life had no plan. I wanted to marry my
first love, but I was being prompted to ``go to college and
make something of myself.'' So off I went to Michigan State
University with absolutely no idea what the college experience
was all about. I had a three-hour orientation, and I was left
to figure out the rest. Being alone with complete freedom,
sometimes one makes bad choices. At the end of the year I was
on social probation, academic probation, and was asked to leave
the University. I left Michigan State University with a 1.9
grade point average.
That summer I worked for Ford Motor Company, a lifestyle I
did not enjoy, so I enrolled in Eastern Michigan University.
Again, I had a three-hour orientation and was off to school. I
knew that I liked money so I thought I'd take business
administration. I joined a social fraternity and soon I was
active in everything. I was hypermanic, enjoying the attention,
the prestige. I was out of balance. By the end of 1977 I was
like a runaway locomotive. My grade point average at Eastern
dropped to a 2.39. My need to be important and accepted by
others drove a wedge between my girlfriend. Other people close
to me were fearful of me.
There were many precipitating psychosocial stressors
leading to my first hospitalization, in February 1978. I lost
my part-time job, my funding sources dried up, my finals went
poorly, and my parents decided that this would be an opportune
time to practice tough love, which is a good concept when
alternate supports are in place. I went to unemployment, I was
turned down. I went to social services, I was turned down. I
was physically, emotionally, socially, and spiritually
bankrupt. And, in psychosis, I collapsed emotionally
From 1978 to 1980, I worked part-time at Kroger's and then
I worked in the field of collections at a bank. I struggled to
get back to school. I was fortunate that in 1980, Vocational
Rehabilitations offered to sponsor me to go back to school if I
could complete two semesters at Schoolcraft Community College,
then they would re-evaluate the possibility of me finishing up
my Bachelor's in Business Administration Degree. I was doing
well; I had a good support system. I felt so good that I
decided, against medical advice, that I did not need my Lithium
or other neuroleptics. Within three months of discontinuation
of my medication, I was hospitalized in a state institution for
one of my longest periods ever. The years 1980 through 1985
involved a rapid succession of hospitalizations. I was put on
Social Security Disability for approximately three years. I
worked part-time at a Clark Gas station. When I felt strong
enough, I worked in a flower delivery business full-time. Then
Social Security Disability was discontinued.
In 1985 I started to play guitar at a mission in Detroit.
Working with individuals who were homeless, I decided to be an
advocate by becoming a social worker. The people I met that
year had touched my heart. I formulated a plan, and started the
process of getting admitted to Wayne State University School of
Social Work. I filed for financial aid and applied for
guaranteed student loans. In my personal statement to Wayne
State's University School of Social Work, I stated the reason
for my desire to become a social worker was that I am a
consumer and I wanted to help other consumers. I had two
entrance interviews for admission to the Bachelor of Social
Work program. I felt discriminated against in the verbal
questions asked of me. I really wanted to be a social worker,
so I accepted the situation and the decision made. I was to go
through the College of Life Long Learning process of admission,
and take the Introduction to Social Work class as well as
getting a recommendation from the professor. I took the class
and received a 4.0 grade point average and the instructor
sponsored my entrance into the program.
The university experience can be frustrating to the average
person, let alone to a person who is perceived as different. I
found in my personal situation that when I was open about my
emotional recovery, many persons in academia were guarded,
apprehensive, and at times obtrusive when it came to evaluating
my ability to function as a student. It may be noted that
during 1985 to 1990, when I attended Wayne State University, I
was completely medically stabilized; I was not hospitalized
during that period. I did find some supportive faculty at
Wayne. One professor taught me the prevention model of social
work. His teachings were in part responsible for the substance
abuse prevention program I later designed and implemented at
William Dickerson Detention Facility through People's Community
Services of Metropolitan Detroit.
I graduated from Wayne State University in 1989 with a
Bachelor's Degree in Social Work, and a grade point average of
3.18. The next year in the advanced standing program was like
being in boot camp. I did not work, I lived off guaranteed
student loans. I was totally immersed in social work, day in
and day out. I knew that a failure at this level would
devastate me.
Graduating from the Master's Program in 1990 was one of the
highlights of my life. I graduated with a 3.54 grade point
average. I had a new girlfriend. My family showed complete
acceptance for the first time in my life. I was interviewing
all around the state for jobs. I was doing consultant work.
Once again, I tried being captain of my own ship, but I lacked
humility. I concealed my feelings from my psychiatrist, because
I truly enjoyed having / I the illusion of complete control.
I was hired as coordinator of an assertive community
treatment team at a community mental health agency. They were
looking for someone who had control capabilities. In the
interview process, I told the director I was I being treated
for manic-depressive disorder when he asked me, `` Is there
anything you want to share about your personal life?'' He hired
me anyway. Life was great; I had a good job, a company car,
good benefits. Boom, I started not sleeping! I did not tell my
doctor. Eight business days after starting to work, I totaled
out the company car. I broke my collarbone and was in full-
blown mania.
While I was in the psychiatric hospital, I received notice
that I was fired. After recovering from the broken collarbone
and thirty days in the hospital, I was hired by another
community mental health agency. The clinical supervisor was
truly happy to have me on staff because of my background at
Sinai, which was also her orientation towards therapy.
Soon after being hired, I confided in one of my coworkers
that I was being treated for a bi-polar condition. It got back
to my clinical supervisor. She called me into her office and
told me that she had heard that I was a consumer of mental
health and asked me if it was true. I said yes. She told me
that due to the nature of my illness, it would be important
that all the staff in our department know. She asked me to
announce this at the next staff meeting. I told her no problem.
So at the next staff meting, I explained the nature of my
illness to approximately ten people, all professionals. Soon
there were rumors that I was not doing my job. I was called
into the clinical supervisor's office and told that someone had
been listening in and documenting my sessions. I was never late
for work, I never took time off from work, all my paperwork was
up to date. Six weeks after being hired, I was fired without
cause.
I was hospitalized for depression. When I got out of the
hospital, I was broke, depressed and socially isolated. No one
wanted to hire me, so I went to the Clark gas station, handed
the manager my resume, told him that I could learn his computer
cash register system and he hired me that day. It was a very
humbling experience, but it paid some of the bills, brought up
my self-esteem and got me out of the apartment. I sent out over
200 resumes. Finally, I was hired part-time contractually at a
private practice doing individual and family counseling. I
continued to work at the Clark gas station. With both jobs, I
was able to pay the rent, but I was having a difficult time
paying my health insurance and medical bills. This continued
for 8 months.
I was hired at People's Community Services of metropolitan
Detroit in 1991, to be a social group worker. Soon after, I
became the supervisor for the Hamtramck programs. I was able to
develop a social adjustment group at the consumer-run Northeast
Drop-In Organization Center (NEDO). It was my pride and joy.
Using the concepts of self-help, affirmation and empowerment
from NEDO, I then developed the program and directed it at the
detention facility.
When I was taken off social security benefits after being
on disability for three years it was because they said it was
because I gainfully employed. At the time I making just $560 a
month as a direct care staff person. My main need was insurance
benefits. I was a melarill and lithium patient for 20 years.
Fortunately, the community mental health system was able to
help me with my benefits.
Due to the fact that I am currently paying back social
security benefits and the cost of medication, I have to
continue to be on social security disability. I am currently
paying back social security benefits of $100 a month to SSA
because they said I was overpaid back when I was making $560 a
month. I reported my earnings so I don't understand why I have
an overpayment, but Social Security says I do.
The costs faced by consumers who want to work are enormous.
Medications make it possible for me to work, but Medicare
doesn't pay for them. So I have to pay for them. The cost of my
current medication is as follows: Closeral is $800.00 a month,
Depokote is $150.00 a month, Cogentine is $49.00 a month. My
hypertension medication is $49.00 a month. My blood is drawn
twice a month, I see a Psychiatrist twice a month, a case
manager every three months and a Medical Doctor every three
months.
I have chronic renal failure, chronic bronchitis, and I
have had lymph nodes removed from my larynx twice. I have a
history of a seizure disorder. I have had two mini-strokes. I
am in need of extensive dental work. I have glaucoma that
affects my night vision.
I currently have Medicare and Blue Cross/Blue Shield
supplemental insurances. Without which I could not function. I
do want to work but like many consumers who also want to work,
we are unable to secure gainful employment above the poverty
level with insurance benefits. Another factor is because of our
pre-existing conditions most insurance providers will not
extend us coverage. Consequentially, due to the lack of parity,
we are forced into continual dependency on Medicare rolls.
My goal one day is to be an advocate for all consumers of
mental health services. I no longer look at my illness as a
debilitating situation, but rather a medical condition. It has
become the motivation and catalyst for my desire to help others
to understand themselves. I have found that by helping others,
I help myself.
Many understanding and compassionate people have helped and
inspired me along the way. Many medical doctors and the mental
health professionals have contributed to the stabilization of
my condition. These professionals went beyond the call of duty
and I am truly grateful to them for their compassion to myself
and others. My brother, Greg, has dedicated the last twenty
years to being a mental health professional. He has reached
countless thousands, directly and indirectly. His insight into
the human psyche as well as his understanding of the need for
advocacy has influenced the availability of least restrictive
environments for consumers of mental health services. His faith
in me gave me hope when I lacked all faith in myself I love him
for that; I love him for his strength and his courage. My
younger brother, Leonard has also been an encouragement to me.
His past role as a consumer advocate combined with his doctoral
training in neuropsychology has given him a unique perspective
on recovery issues. I love him and I am encouraged to see him
work through the trials and tribulations of his own life. Above
everyone else, I would like to thank God, who has allowed me
choices in life; He does not make junk. I have learned that He
loves us all.
Additional Testimony of David Gallagher
Community Mental Health Organizations, and Client Centered
planning, are at risk due to the current policies of our HMO's,
PPO's, and EAP's. As an at risk agency, CMH's will be forced to
reduce, restrict, and in some cases deny services to many who
can not afford traditional treatment. Managed care will be
devastating to many of the neediest clientele. Client centered
planning is supposed to put the consumer in control of his/her
treatment plan. Unfortunately client centered planning is not
being followed in most cases. What is needed is more Consumer
Advocates, especially, professionals who are themselves
mentally ill.
As both a Consumer and a professional certified social
worker I can afford the luxury of being an advocate no matter
where I go or to whom I speak. I have learned to walk in other
people's moccasins and have empathy for those who suffer the
disease called mental illness. What will be needed is
psychosocial rehabilitation combined with self-help
initiatives. We need to aid and assist consumers of mental
health through self help alternatives, consumer initiatives
counseling and education. Our goal is to promote a better
understanding of the potential of all persons who suffer from
the condition called mental illness. Organizations are in place
such as Manic Depressive Depressive Association (MDDA),
International Association of Psychosocial Rehabilitation
Services (IAPSRS), Schizophrenics Anonymous (S.A.), and
Michigan Supported Education Program, (MSEP). They are just a
few of the many support groups available.
The objective for the year 2002 will be to lower recidivism
rates and optimize resources. The stigmatization that causes
the Not In My Backyard (NIMBY) syndrome is going to have to be
overcome. Revolving door hospitalization is going have to end.
What we are finding is that our jails and prisons are being
filled due to homelessness and valid medical needs.
Misdemeanors are being committed just to get three squares and
a cot. By the year 2002 each CMH should be required to have a
Consumer run drop-in center. Utilizing the Fountain House
Model, these outreaches fill in the gap where the CMH's
currently are lacking. It may be noted that I am affiliated
with North East Drop In Center (NEDO), and I also circulate
with the Odyssey House Drop IN, and the Liberty Drop IN Center.
While education and counseling play a major role for the
struggling consumer, it is imperative that pharmacology not be
disregarded. The newer medications like Closeral, Depokote and
Respitol work wonders with little side effects. With proper
medication mental illness can be arrested and treated as any
other physical disability. With the new millennium we must
empower our consumers; they are a valuable resource. The
American work ethic is very important to all. It gives a person
a sense of accountability. In order for Workfare to work
though, a living wage and a national insurance program will be
needed. The programs will have to be innovative. Unlike Social
Security Insurance, which is over three trillion dollars in
debt, these programs will have to be self-sustained. Social
Security was never set up to be lived on but to supplement ones
income.
Our greatest resource is our intelligence and ability to
learn. You can give a person fish for a day and he will eat for
a day but if you teach a person how to fish he can eat for a
life. All colleges must be cost affordable to be utilized by
consumers. The need for tutors will be in demand for this
special population. Drop In Centers should be on campus just as
they are at Wayne County Community College and Henry Ford
Community Colleges. Peer support groups should be available at
all colleges.
By the year 2002 we will need more Occupational Therapists,
Recreational Therapists, and Music Therapists. Lay people and
para-professionals with shared life experiences will be in high
demand. Due to the fact that many Consumers are dual diagnosed
with substance abuse as a secondary diagnosis, self-help groups
such as Narcotics Anonymous (N.A.) and Alcoholics Anonymous
(A.A.) will be in high demand. Group therapy as well as
behavior modification techniques combined with cognitive short-
term therapy will be the standard. Because many of our
consumers are addicted to tobacco, and the cost of 1 pack of
cigarettes will probably be well over $5.00 a pack, the
emphasis will be on prevention as well as the importance of not
smoking in public places due to the hazards of secondary smoke.
As a former smoker myself I recognize how difficult it is to
quit smoking, it was the hardest addiction to overcome.
However, for many clients caffeine and nicotine are the only
pleasure they have in life.
We will be watching and waiting for continued client
recipient rights as well as policies related to the Americans
with Disabilities Act. We must become our own lobbyists and
take responsibility for informing legislatures of our needs. It
is a myth that consumers are not capable of being lobbyists. We
have been doing this at NEDO and have actually been written
back by President Clinton and Governor Engler, as well as
several other elected officials. There is however an element of
stigmatization that prevents many clients from ``coming out of
the closet.'' We will need more mentors, such as MSEP provides,
to be peer counselors.
The family stresses related to being a caregiver, guardian
and/or payee have to be addressed. Mental illness can destroy a
family. Usually there is a trust broken in the relationship and
anger inhibits the relationship. Groups like MDDA and IAPSRS
will be imperative to support the family. With the onset of
HMO's, PPO's, and EAP's traditional treatment will not be
available for family counseling.
Finally spirituality should be addressed. With the dawn of
the new century ones faith is important. Scriptures state that
we need faith, hope, and love. We must never discount a
client's faith, no matter how delusional it may sound, it may
be the only hope they have. This combined with genuine love
will heal.
Chairman Shaw. Thank you, Mr. Gallagher. Mr. VanOoteghem.
STATEMENT OF WILLIAM R. VANOOTEGHEM, FATHER OF SOCIAL SECURITY
BENEFICIARY, AND WENDY VANOOTEGHEM, SOCIAL SECURITY
BENEFICIARY, ESSEXVILLE, MICHIGAN, ON BEHALF OF ARC OF THE
UNITED STATES
Mr. VanOoteghem. Good afternoon, Chairman Shaw and members
of the Subcommittee. My name is William R. VanOoteghem and this
is my daughter, Wendy. Before I get started, I would like to
thank the Arc, and your Committee for the work that you did on
the work incentives bill last year.
Wendy and I are here to talk to you about what will happen
to Wendy if her work increases her wages over the SGA level of
$700 per month--which, by the way, is just about the poverty
level for an individual. We are here to talk to you about SGA
and what it means to all people with disabilities across the
country.
I have been able to observe people with disabilities for
over 25 years. I have seen them grow over the years with the
desire to have a better life, especially in this growing
economy. Last summer, allowable monthly earnings went from the
$500 level to $700 a month. People with disabilities have more
opportunities now to get better paying jobs as the business
community now recognizes that they can do the same jobs as
persons without disabilities.
I have seen my daughter Wendy's life begin to take a real
positive outlook as she did more productive work that paid her
more money and made her look forward to every payday. The more
work skills people with disabilities acquire, the more money
they make, the more part of the community they become. They
have more buying power and also pay taxes, therefore, they
become an asset to their community.
Wendy has mental retardation, and limitations in physical
movement. She functions at the third-grade level in reading,
spelling and arithmetic. She enjoys work and is a dedicated
worker on a production line.
I believe that working is important for Wendy and other
people with disabilities, just as it is for people without
disabilities. But we actually cause a hardship to many people
with disabilities if they are penalized and have to lose basic
supports as a result of work. Now Wendy and her co-workers have
to worry about going over the $700 a month that the Social
Security Administration sets for the SGA level per month. That
means that if they make more than $700 per month, they will
eventually give up all their cash benefits and will eventually
lose Medicare health insurance and have to pay out of their own
pocket to get insurance. If a person with a disability works 40
hours per week, at a minimum wage of $5.15 per hour, they will
earn $824 per month. That is $124 above the current SGA level
of $700 per month. This will cause the loss of benefits that
they need to survive.
Under the work incentives available in the SSI program,
Wendy would have been able to earn more, but because she
receives Title II benefits as a disabled adult child since I
retired, she is limited by the $700 a month amount.
For many like my daughter, their disabilities are lifelong
and severe and they cannot afford to lose the basic safety net
supports of Social Security and Medicare. That is why we are
asking for the same financial advantage that a person who is
blind gets at $1,170 per month, with annual indexing or COLAs.
In doing this, we will never again hold people back from being
productive in the years to come.
STATEMENT OF WENDY VANOOTEGHEM, SOCIAL SECURITY BENEFICIARY,
ESSEXVILLE, MICHIGAN
Ms. VanOoteghem. My name is Wendy VanOoteghem, I am 39
years old. I have been working at Do-All in Bay City, Michigan,
for 13 years. Right now I am working 30 hours a week on a
packaging line, packaging zip-loc bags and doing other
specialty packaging. I believe I could make more than $700 a
month, but I cannot afford to lose Social Security and
Medicare. I have to make sure that I do not make more than $700
each month. It makes me angry. I want to be able to work more.
Mr. VanOoteghem. My wife and I are in our 60s, like a lot
of other families, and if something would happen to us, we want
Wendy to be able to make it on her own. Yet she must depend on
her Social Security and Medicare as a safety net, especially
when we can no longer assist her.
What the SGA level amounts to is a wage ceiling for people
with severe, lifelong disabilities, a ceiling that is created
in federal policy. We need your help to bring the SGA level up
to a reasonable amount and index it for inflation.
Thank you for giving us this opportunity to testify here
today.
[The prepared statement follows:]
Statement of William VanOoteghem, Father of Social Security
Beneficiary, and Wendy VanOoteghm, Social Security Beneficiary, on
behalf of Arc of the United States
A Parent's Perspective on SGA
My name is William R. VanOoteghem and this is my daughter
Wendy. We are here to talk to you about what will happen to
Wendy if her work increases her wages over the SGA level of
$700.00 per month (which, by the way, is just about the poverty
level for an individual). We are here to talk to you about SGA
and what it means to all people with disabilities across the
country.
I have been able to observe people with disabilities like
my daughter for over twenty-five years. I have seen them grow
over the years with the desire to have a better life,
especially in this growing economy. Last summer, allowable
monthly earnings went from $500.00 to $700.00. People with
disabilities have more opportunities now to get better paying
jobs, as the business community now recognizes that they can do
many of the same jobs as a person without disabilities. I have
seen my daughter Wendy's life begin to take a real positive
outlook, as she did more productive work that paid her more
money and made her look forward to every payday. The more work
skills people with disabilities acquire, the more money they
make, the more part of the community they become. They have
more buying power and also pay taxes, therefore, they become an
asset to their community.
Wendy has Down syndrome, mental retardation, and
limitations in physical movement. Her reading, spelling, and
arithmetic are at the third grade level. She enjoys work and is
a dedicated worker on a production line.
I believe that working is important for Wendy and other
people with disabilities, just as it is for people without
disabilities. But we actually cause a hardship to many people
with disabilities if they are penalized and have to lose basic
supports as a result of work. Now Wendy and her co-workers have
to worry about going over the $700.00 a month that the Social
Security Administration sets for the SGA level per month. That
means that if they make more than $700.00 per month, they will
eventually give up all their cash benefits and will eventually
lose Medicare health insurance and have to pay out of their own
pocket to get insurance. If a person with a disability works
forty hours per week, at a minimum wage of $5.15 per hour, they
will earn $824.00 per month. That is $124.00 above the current
SGA level of $700.00 per month. This will cause the loss of
benefits that they need to survive.
Under the work incentives available in the SSI program,
Wendy would have been able to earn more; but because she
receives Title II benefits as a ``disabled adult child'' since
I retired, she is limited by the $700.00/month amount.
For many, like my daughter, their disabilities are lifelong
and severe and they cannot afford to lose the basic safety net
supports of Social Security and Medicare. That is why we are
asking for the same financial advantage that a person who is
blind gets at $1170.00 per month, with annual indexing or COLAs
(cost of living adjustments) for all people with disabilities.
In doing this, we will never again hold people back from being
productive in the years to come.
Wendy's Perspective on SGA
My name is Wendy VanOoteghem; I am thirty-nine years old. I
have been working at Do-All in Bay City, Michigan, for thirteen
years. Right now, I am working about thirty hours a week on a
packaging line, packaging zip-loc bags and doing other
specialty packaging. I believe I could make more that $700.00 a
month, but I cannot afford to lose Social Security and
Medicare. I have to make sure that I do not make more than
$700.00 each month. It makes me angry. I want to be able to
work more.
Preparing for the Future
My wife and I are in our sixties, like a lot of other
families, and if something would happen to us, we want Wendy to
be able to make it on her own. Yet she must depend on her
Social Security and Medicare as a safety net, especially when
we can no longer assist her.
What the SGA level amounts to is a wage ceiling for people
with severe, lifelong disabilities -a ceiling that is created
in federal policy. We need your help to bring the SGA level up
to a reasonable amount and index it for inflation.
Thank you for giving us this opportunity to testify here
today.
The Arc of the United States is a membership organization
made up of people with mental retardation, their families,
friends, interested citizens, and professionals in the
disability field. Together they form approximately 1,000 state
and local chapters of The Arc and the largest voluntary
organization in the United States devoted solely to working on
behalf of people with mental retardation and their families.
The Arc works through education, research, and advocacy to
improve the quality of life for children and adults with mental
retardation and their families and works to prevent both the
causes and effects of mental retardation.
Chairman. Shaw. Thank you, sir. Dr. Hanes.
STATEMENT OF PAMELA HANES, PH.D., ASSOCIATE DIRECTOR FOR
RESEARCH, OREGON HEALTH POLICY INSTITUTE, DEPARTMENT OF PUBLIC
HEALTH AND PREVENTIVE MEDICINE, OREGON HEALTH SCIENCES
UNIVERSITY
Ms. Hanes. Mr. Chairman and Members of the Subcommittee, I
want to thank you for the invitation to present testimony at
your hearing today. I am Research Director at the Oregon Health
Policy Institute, and in this capacity I am currently directing
an evaluation, a three-year evaluation, of a three-state work
incentive initiative demonstration project that is being
conducted in Oregon, Vermont and Wisconsin, and is being funded
by the Robert Wood Johnson Foundation. This research is
attempting to better understand the perceived and real barriers
to employment as experienced by Social Security beneficiaries
who live with a severe disability, and to understand how these
perceptions influence their return to work efforts.
We are confident that this research effort will illuminate
the individual structural factors that contribute to the high
rates of unemployment and under-employment among Social
Security beneficiaries.
I am presenting to you today preliminary findings from our
Employment Barriers Survey. This survey was first developed in
1993 and conducted with a group of severely physically disabled
beneficiaries in Wisconsin, and has more recently been
administered to Social Security beneficiaries not only in
Oregon, Wisconsin and Vermont, but also the State of Alaska.
The survey data reports the collective experiences,
beliefs, attitudes and fears about returning to work, pursuing
gainful employment, and the potential impact of this pursuit on
the preservation of their essential income and health insurance
benefits. We have learned from our participants that SGA is a
major basis for the fears that are experienced by
beneficiaries.
To focus our attention on today's hearing, I would like to
quickly summarize some of the findings from the Alaska survey,
which has been more extensively analyzed than the three-state
evaluation, and then I would like to summarize what the
findings of these surveys are pointing to.
In Alaska, of 354 individuals who returned the survey, 59
percent reported that they would like to return to work if
employment didn't jeopardize their eligibility for needed
benefits.
What we are hoping to learn in the three-state work
incentive evaluation is what happens to thwart these
expectations about employment.
This is the primary finding that we hope to learn from the
participants of the three-state study over the next two and a
half years. When this study is complete, the Institute will
have not only self-reported data from individuals that has been
collected at three points in time, but we will be linking this
information to earnings, public program participation, cost of
disability-related benefits and services, and health care
utilization. These data will be reported on approximately 600
program participants and a comparable group of nonparticipants.
I mention this to tell you that it is a very unique study
in the country in terms of our ability to understand the impact
of employment barriers on the personal lives of a cross-section
of individuals who have severe disabilities.
Fifty-eight percent of the survey respondents in Alaska
reported that they had been employed prior to receiving
Disability benefits. Only 96 of these individuals were employed
at any time after collecting Disability benefits. At the time
the survey was administered, only 39 individuals of the full
354 people were working. Of these 96 individuals who reported
working, we had some very interesting findings about what the
supports were that allowed them to continue to work. Support
from family and friends, as we just heard from the presenters
right before me, was a very important factor in individuals
with severe disabilities to get and keep a job. In addition to
that support from family and friends, having convenient and
accessible transportation, and most especially and somewhat
surprising, is employer and co-workers' attitudes toward people
with disability was reported to be a major support in the
reason that people were able to remain at their job.
Finally, 70 percent of these few people who told us they
had worked since their disability, told us that continuing to
be able to get their SSI checks while working was a very
important factor for getting and keeping a job.
Now, among the majority of people who didn't work, we had
findings about what were the barriers to pursuing gainful
employment, and I am sure this committee has heard these
factors many times as we were hearing testimony for the Ticket
to Work and Work Incentives Improvement Act.
Disability and health problems was the most important
factor to keep people out of the labor market but, after the
disability itself, not having affordable health insurance, not
being able to earn enough money to make up for lost benefits,
not being eligible for Medicare and Medicaid were top vote-
getters in the reasons that people perceive it is not in their
best interest to go back to work.
I would just like to say that it is very instructive when
we looked at the information that came from people who had
worked since collecting Disability benefits and those who had
not, the differences in their perceptions of these barriers.
Twice as many people were likely to report they couldn't work
because of their disability, if they had never worked. Three
times were more likely to say that their inability to get time
off for disability-related benefits was a major reason for not
working, and six times more people were more likely to report
that not having control over the pace and scheduling of work
was a major barrier to working.
I mention these barriers because we are learning from the
research that we are doing that many of these are perceptual
barriers that don't hold up once people have successes in the
workplace. And this is a very powerful message, I think, to
those of us who are interested in looking at policy and system
level modifications that help get folks with severe
disabilities back into the labor market.
And almost every employment barrier measure presented,
individuals who were currently working did not express major
concern about the effect of working public benefits. It is a
powerful and instructive finding.
I would like to complete my comments by just suggesting one
thing that is particularly relevant to the hearing here today,
and that has to do with the challenge facing--the changing face
of disability and the challenge of reshaping and modifying
policy that is disability sensitive.
Individuals with differing types of disabilities have very
differing needs in terms of getting back to work. Individuals
with physical and sensory disabilities depend heavily on
adaptive equipment and devices, durable medical equipment and
personal support. There is no ``one size fits all''
accommodation to overcome the misfit between individuals'
functional limitations and their work environment.
It is incumbent on all of us to acknowledge that employment
barriers are equally disempowering for all individuals who live
with a severe disability, whether it be physical, psychiatric,
sensory, or developmental in nature.
Structural barriers to employment, therefore, must be
resolved based on the unique needs and differences of the
different types of disabilities that present in the Social
Security beneficiary rolls. Thank you, and I would be happy to
answer any questions about the data that are contained in my
written testimony.
[The prepared statement follows:]
Statement of Pamela Hanes, Ph.D., Associate Director for Research,
Oregon Health Policy Institute, Department of Public Health and
Preventive Medicine, Oregon Health Sciences University
Chairman E. Clay Shaw, Honorable Robert Matsui, and
distinguished subcommittee members, thank you for the
invitation to present testimony at today's hearing. My name is
Dr. Pamela Hanes. I am the Associate Director for Research at
the Oregon Health Policy Institute (OHPI) in the Department of
Public Health and Preventive Medicine at the Oregon Health
Sciences University. I am here today to discuss early findings
from an important research project currently underway at the
Institute. This research is attempting to better understand the
barriers to employment experienced by a population of SSA
beneficiaries who live with severe disabilities. Further, the
research will help us learn the extent to which mitigation of
these barriers will lead to increased rates of gainful
employment among severely disabled workers.
I come today with findings from an Employment Barriers
Survey that has been administered to SSA beneficiaries in four
states. These findings are unique in several ways. The data are
derived directly from individuals who live with a severe
disabling condition and represent their collective experiences,
beliefs, attitudes and fears about returning to work, pursuing
gainful employment, and the potential impact of this pursuit on
the preservation of their essential income and health insurance
safety net. This survey was conducted with SSA beneficiaries
who live in Oregon, Vermont and Wisconsin and are participating
in the 3-State Work Incentive Initiative currently underway in
these three states. In addition to the self-reported
experiences of individuals participating in the 3-State
Initiative, comparable data are presented from a representative
sample of 1000 low-income SSDI and SSI beneficiaries on
Medicaid in Alaska who were mailed in an earlier version of the
Employment Barriers Survey in 1998.
These data are unique because they represent a true cross
section of a severely disabled population in terms of geography
and the types of disabilities experienced. The data include a
representative sample of SSDI and SSI beneficiaries living with
psychiatric, physical, sensory, and developmental disabilities.
This information gives voice to over 1000 SSA beneficiaries in
these four states.
When this 3-state study is completed in 2002, we will have
individually reported attitudinal data that is linked to the
earnings, public program participation, and health care
utilization data of approximately 600 program participants and
a comparable group of non-participants. This uniquely linked
data set will provide a comprehensive picture of the
relationship between living with a severe physical, psychiatric
or developmental impairment and the structural factors in the
policy and physical environment that both thwart and facilitate
gainful employment. I look forward to a future date when I can
report these very important research findings to the Social
Security Subcommittee of Ways and Means.
The field of disability policy research has been slowly and
steadily building a body of evidence to support policy and
systems change at the state and federal levels. These changes
can be seen in both the re-structuring of SSA benefits and work
incentives as well as in the new options and protections
available in the Medicare and Medicaid programs. AK, OR, VT,
and WI, along with several other states, have taken a strong
leadership role in these reform efforts. The Robert Wood
Johnson Foundation has provided generous support to the 3-State
Work Incentive Initiative (OR, VT, and WI) currently being
evaluated by OHPI. Additionally, Vermont and Wisconsin are
among ten other states that have cooperative agreements with
the Social Security Administration to further support the
individual states' work incentive efforts.
The Ticket to Work and Work Incentives Improvement (TWWIIA)
Act of 1999 is another vitally important foundation to
facilitate these knowledge-building and policy reform
processes. My research team at OHPI will be closely monitoring
the early impact of TWWIIA on the 3-State Work Incentive
Demonstration programs in Oregon, Vermont, and Wisconsin.
The initial ``pictures'' we have taken of individuals
participating in the 3-State Work Incentive Initiative and
those taken in Alaska have produced somewhat differing images
of living with a severe disability. A primary reason for these
differences can be explained by certain characteristics of the
underlying populations sampled. In Alaska, a randomly selected
sample of SSA beneficiaries who receive Medicaid was drawn from
the state Medicaid files. Therefore, this sampled population
represented a particularly low-income group of individuals.
Although likewise SSA beneficiaries in OR, VT, and WI, the
survey respondents also are current or past clients of their
states' vocational rehabilitation agencies. Thus, this group
represents a population of beneficiaries that has demonstrated
some vocational readiness to enter or re-enter the labor
market.
To set the context for the reported attitudes, beliefs and
fears associated with being gainfully employed, I have provided
a brief description of educational and employment history
characteristics of the population surveyed in AK and also those
found among participants in the 3-State Work Incentive
Initiative.
Alaska Profile
Almost 30% of Alaskan respondents had less than a
high school education;
96% reported an annual income of less than
$15,000;
In spite of full Medicaid coverage among survey
respondents, 46% reported having out-of-pocket medical
expenses; of these, \2/3\ reported spending between $50-100/
month on medical and health-related expenses;
35% of all respondents had been on disability
benefits for over 10 years;
63% of all respondents reported having more than
one diagnosed disability; the group least likely to have a
second disability was those with a primary sensory disability;
58% of all survey respondents reported being
employed prior to receiving disability benefits. Of those with
an employment history, the majority held non-professional
positions and had substantial work histories (53% worked over 5
years and 32% of these over 10 years);
Wages from prior employment were low, in most
cases near the poverty level;
Of the 29% of respondents who reported being
employed at any time since collecting disability benefits
(n=96), 41% were working at the time of the survey.
To summarize this respondent profile, survey responders in
Alaska were an extremely disadvantaged group as noted in their
pre-disability as well as post-disability demographic profiles.
Because the sample was stratified to capture the voices of
rural as well as urban dwellers, a disproportionately high
response from the frontier areas of the state (49%) is
reflected in the prior occupation of beneficiaries, with almost
one-third of formers workers in the manual laborer category
prior to becoming a SSA beneficiary.
Of the individuals who reported having worked since
becoming eligible for SSA benefits:
69% said that having support from family and
friends was an important factor in getting or keeping a job;
71% reported having convenient and accessible
transportation was important;
76% reported that positive employer attitudes
about people with disabilities was important; likewise 74% said
co-workers attitudes were important; and
70% said that continuing to get SSI checks while
working was important to getting or keeping a job.
When the group of respondents who never worked since
collecting SSA benefits was asked about the major barriers that
keep them from working:
77% said their disability was a major barrier to
work;
51% reported not having affordable health
insurance was a major barrier;
57% reported not being able to earn enough money
to make up for lost benefits as a major barrier to work;
65% reported not being eligible for Medicare or
Medicaid as a major barrier to work;
61% said losing eligibility for Medicare or
Medicaid as a major barrier to work;
56% reported that employment would affect their
ability to keep disability-related benefits as a major barrier
to work; and
52% reported employment making it harder to get
disability-related benefits in the future as a major barrier to
work.
To summarize the major barriers to work reported by a
representative sample SSA beneficiaries on Medicaid in Alaska,
it is instructive to note the differences in perception of what
constitutes a barrier to work between respondents who had
worked at some time since collecting benefits and the majority
of respondents who had not returned to work. Respondents who
hadn't worked since collecting disability benefits were:
Twice as likely to report they couldn't work
because of their disability;
Three times more likely to say that their
inability to get time off disability-related reasons was a
major barrier to work;
Three times more likely to say that lack of
convenient transportation was a major barrier to work; and
Almost six times more likely to report that not
having control over the pace and scheduling of work was a major
barrier to working.
Even more dramatic are the differences in perceptions of
barriers between those who were currently working at the time
of the survey and those who had not worked since collecting SSA
benefits. Current workers were:
Six times LESS likely to report that employment
affecting their benefits in the future was a major barrier to
working;
Six times LESS likely to report that employment
affecting their ability to keep disability-related benefits was
a major barrier to working;
Six times LESS likely to report that not having
the ability to receive Medicare and Medicaid was a major
barrier to working; and
Three times LESS likely to report that not being
able to earn enough money to make up for lost benefits was a
major barrier to working.
Current workers reported no major concern about
negative employer or co-worker attitudes as a major barrier to
working.
On almost every employment barrier measure presented,
individuals who were currently working did not express a
significant level of fear about the effect of working on public
benefits compared to those who had not worked since collecting
benefits. This is a powerful and instructive finding about the
support that is needed and the positive impact of successful
employment on dispelling the fear of loss of benefits. This
support will come, in part, through education about the
informed use of existing and the new work incentive programs
that are embodied in TWWIIA. It also will come when
beneficiaries have reason to believe and trust in a solid
safety net that exists should their disability or health worsen
while attempting or engaging in gainful employment.
Oregon, Vermont, Wisconsin Profiles
The data reported today from the 3-State Work Incentive
Initiative is preliminary. We are currently in the process of
tabulating information from the baseline Employment Barriers
Survey that was administered to all individuals who are
participating in the three states' programs and a cohort of
non-participants who are being tracked in the same way as
program participants. The full population of program
participants has not been enrolled in the three states'
programs. Enrollment will continue through the end of April
2000.
A modified version of this survey will be re-administered
two more times during a three-year study period. I am reporting
preliminary baseline data today. The data have been presented
by type of disability to reinforce the fact that type of
disability DOES make a difference in how individuals relate to
their physical environment, therefore impacting their ability
to work, and subsequently affecting their belief in their
ability to work.
Individuals with sensory disabilities have been included
the ``physical disability'' category. We estimate that
approximately 10% of the individuals in this group have a self-
reported primary or secondary sensory disability. In terms of
the preliminary data: 44% of participants reported a physical
disability, 28% a psychiatric disability, 11% a developmental
disability, and 13% reported more than one primary disability.
% Of participants reporting ever being employed before
collecting SSA benefits:
84% Physical
89% Psychiatric
42% Developmental
76% More Than One Primary Disability
% Of participants reporting working full-time prior to
collecting SSA benefits:
81% Physical
67% Psychiatric
41% Developmental
74% More Than One Primary Disability
% Of participants reporting working more than 10 years
prior to collecting SSA benefits:
59% Physical
40% Psychiatric
17% Developmental
53% More Than One Primary Disability
% Of participants reporting being currently employed at the
time of the survey:
58% Physical
50% Psychiatric
35% Developmental
57% More Than One Primary Disability
% Of participants reporting working full-time at the most
recent job lasting 30 days or more:
36% Physical
23% Psychiatric
8% Developmental
27% More Than One Primary Disability
% Of participants reporting their ability to work is
limited because of their disability:
59% Physical
46%% Psychiatric
41% Developmental
63% More Than One Primary Disability
% Of participants reporting strong concern that working
will affect their ability to keep their SSA cash benefits:
52% Physical
54% Psychiatric
41% Developmental
46% More Than One Primary Disability
% Of participants reporting that unless a job offers
prescription drug coverage they can't afford to work:
34% Physical
45% Psychiatric
13% Developmental
42% More Than One Primary Disability
% Of participants reporting that it would be hard to earn
enough money to make up for lost SSA benefits:
45% Physical
51% Psychiatric
34% Developmental
40% More Than One Primary Disability
% Of participants reporting a major concern about not being
eligible for Medicare and Medicaid if they return to work:
19% Physical
29% Psychiatric
16% Developmental
30% More Than One Primary Disability
From these preliminary data we can see that earnings from
return to work does pose a significant threat to beneficiaries
in terms of their fear of loss of essential safety net
benefits. Tracking these beliefs and fears over time, and being
able to link them to participants' back to work efforts will
provide a critical body of information that is currently
missing from our knowledge base. We do know that in Vermont
when policy analysts looked at the successful closures of their
SSA beneficiary clients in 1995 there was a strong tendency to
``park'' earnings right under $500/month which, at the time,
was the level of Substantial Gainful Activity (SGA). This
parking behavior was in stark contrast to their successful
closures of non-SSA beneficiaries--the non-SSA clients
demonstrated a steady upward trend in earnings out to 18 months
after closure.
The take away messages I would like to leave with
subcommittee members today are based on ten years of policy
research in this area.
First, the problem of un-and underemployment among SSA
beneficiaries living with a severe disability represents a
complex web of personal, policy, and environmental factors, and
as such, any potential policy or systems reform solutions must
both recognize and appropriately deal with this complexity.
Second, the severity of an individual's disability, that
is, the degree of functional limitation one experiences in
pursuing normal activities of daily living is ultimately a
function of an individual's fit with his or her physical
environment. Disability describes a misfit between an
individual and his physical environment. As such, much of what
we call disability can be ameliorated through accommodation,
modification of the built and policy environment, and changing
societal attitudes from those that use the label of disability
to those that put the focus on individuals with differing
abilities.
Third, the face of work disability has changed dramatically
since the disability insurance (DI) amendments were added to
the Social Security Act in 1958. In the late 1950s, a DI
beneficiary characteristically would be described as a 50-
something ``worn out worker'' -a male with a life expectancy of
60 (+/-a few years), laboring in a production-oriented, heavy
industrial position who exits the labor force with a physical
disability. In the 1990s a younger worker in his 30s or 40s who
is increasingly exiting from an information-based, high
technology or service-based labor market with a severe mental
disorder is more characteristic of a DI beneficiary. The
profile of the 1990s beneficiary is supplementing, if not
replacing, the earlier profiled disabled worker, this is
especially true in the northern tier states of the U.S. The
largest single category of disability in the DI and SSI
population is mental disorders followed by muscular-skeletal
disorders. In the past 10 years alone, the number of disabled
beneficiaries under age 30 has more than doubled from 116,000
to 275,000. With this growth in the younger disabled population
is a projected lifetime stay on SSI disability benefits of 25
years for recipients between the ages of 0-17 and 16 years for
those between the ages of 18-34. The primary reasons
individuals leave the SSDI rolls are death (55%), followed by
reaching retirement age (34%), disability cessation (8%) and
Other (2%). The ``other'' category includes return to work.
These sobering statistics require a re-thinking and subsequent
re-engineering of the disability safety net.
Fourth, with the changing face of disability comes the
challenge of re-shaping and modifying policy that is
disability-sensitive. Work patterns, earnings, and employment
barriers differ on the basis of the underlying disabling
condition. Individuals with psychiatric disabilities are the
most vulnerable to starts and stops in employment because
disability management is so heavily dependent on professional
involvement and strict adherence to drug regimens that often
outlive their usefulness. On the other hand, individuals with
physical and sensory disabilities depend heavily on adaptive
equipment and devices, durable medical equipment, and personal
support services. There is no one-size-fits-all accommodation
to overcome the misfit between an individual's functional
limitations and his or her work environment. Each individual's
experience of functional impairment is unique and yet we know
that what facilitates employment for individuals with spinal
cord injuries or blindness will not necessarily lead to gainful
work activity for individuals with bipolar disorder or
schizophrenia.
It is incumbent on all of us to acknowledge that employment
barriers are equally disempowering for all individuals who live
with a severe disability, whether it be physical, psychiatric,
sensory, or developmental in nature. Structural barriers to
employment for individuals with severe disabilities are no
respecter of person based on their particular type of
disability. Policy solutions that promote access to the world
of work therefore must be equally and equitably available to
all SSA beneficiaries regardless of their underlying
disability. Only when this happens will the full legislative
intent of the ADA become realized and the potential for fuller
employment of individuals with severe disabilities embodied in
the TWWIA be fully utilized.
Chairman Shaw. Thank you, Dr. Hanes. Mr. Young.
STATEMENT OF TONY YOUNG, DIRECTOR OF GOVERNMENT ACTIVITIES,
NISH, VIENNA, VIRGINIA, AND CO-CHAIR, SOCIAL SECURITY TASK
FORCE, AND VICE CHAIR, CONSORTIUM FOR CITIZENS WITH
DISABILITIES
Mr. Young. Thank you. Good afternoon. I would like to start
this afternoon by thanking the Subcommittee and the staff for
the time and energy that went into passing the Ticket to Work
and Work Incentives Improvement Act. The leadership of this
Subcommittee was crucial to ensuring this legislation became
law.
As you well know, the Social Security Disability Insurance
was established to protect workers against the loss of income
due to a disability that prevented them from working. When SSDI
was established 50 years ago, it was reasonable to expect that
people with the most severe disabilities would almost certainly
never work. The technologies, services, supports, and
medications that exist today would seem like science fiction to
those who wrote the original SSDI law.
Let me put this in some perspective. A popular comic of the
1950s portrayed a character whose car had a telephone in it.
Another had a car that could display maps on a television in
the dashboard. Today, this is no longer science fiction, this
is reality.
The reality for people with disabilities has changed also.
Work, a job, a career, things that were not possible 50 years
ago today can be an expectation for people with even the most
severe disabilities. These expectations can be a reality when
we have access to new technologies, new services, supports, and
medications, yet we struggle to work under SSA rules that were
created when things were quite different. The automobile
industry has kept up with the times, and so, too, should
disability policy.
On many occasions CCD has testified about the difficulties
posed by the SSDI earnings limit. The earnings limit, also know
as the ``cash cliff'', creates an all-or-nothing situation that
forces beneficiaries to forego all cash benefits after only a
meager level of earnings. This earnings limit is now $700 per
month, $8400 per years. Earning just one dollar over this limit
can cause an SSDA beneficiary to be determined no longer
eligible for cash benefits. Oftentimes, the benefit amount lost
is nearly equal to the earnings limit, subjecting the
beneficiary to a whopping 50 percent drop in net income.
Further, all individuals with severe disabilities incur
substantial costs in attempting to work. In my case, I pay over
$10,000 a year just for personal assistance services. The
wheelchair that I use to get around and go everyplace and go to
work, cost $20,000. I spent another $20,000 buying a van to
transport me and my wheelchair, and then had to spend another
$15,000 to make it accessible. Assistive technology, hearing
aids, animal companions, medical equipment and supplies,
deductibles and co-payments, communications devices and the
maintenance of all this equipment all increase costs faced by
individuals with severe disabilities who work.
As a result, far fewer beneficiaries attempt work than
would under a more rational policy. Many never work above the
earnings limit, even if they can. This policy creates financial
costs for the government because beneficiaries who could work
and pay taxes aren't. It costs the government because people
fear they can't jump the cash cliff to achieve a level of
earnings that allow them to live above poverty, so they remain
on full benefits.
It took ten years for SSA to raise the earnings limit to
$700 from $500. It took just as long to go to $500 from $300.
And those increases weren't even enough to keep up with the low
rate of inflation our economy experienced during that time.
For more than 20 years, the disability community has
advocated for changes in the SSDI program, particularly about
the SSDI cash cliff. Legislative addressing the earnings limit
could take many forms. However, certain key principles should
form the foundation for any congressional action addressing the
earnings limit. These principles are: (1) Do No Harm. Changes
made by Congress to earning limit, or to the Social Security
Disability programs as a whole, should ensure that no
disability group is negatively affected. Whatever Congress
does, it must not enact policy detrimental to any category of
DI beneficiaries; (2) Equity. Should Congress take favorable
action on legislation that addresses earnings limits, Congress
must ensure equity among all DI beneficiaries.
There are a variety of options available to Congress that
would eliminate the cash cliff. We would welcome the
opportunity to work with you and your Subcommittee staff in
developing a proposal that eliminates the cash cliff.
We urge Congress to finish the work begun with the
enactment of the Ticket to Work and Work Incentives Improvement
Act by removing the cash cliff barrier to work.
Again, I thank the Subcommittee for this opportunity. I
will be glad to answer any questions you might have.
[The prepared statement follows:]
Statement of Tony Young, Director of Government Activities, NISH,
Vienna, Virginia, and Co-Chair, Social Security Task Force, and Vice
Chair, Consortium for Citizens with Disabilities
Thank you Chairman Shaw, Mr. Matsui and members of the
subcommittee, for the opportunity to testify today on the SSDI
earnings limit. I am Tony Young, the Director of Government
Activities for NISH and Vice Chair of the Consortium for
Citizens with Disabilities. CCD is a coalition of nearly 100
national organizations advocating on behalf of people with all
types of physical and mental disabilities. I am testifying
today in my role as a Co-Chair of the CCD Task Force on Social
Security.
Mr. Chairman, I want to begin this morning by thanking you
and Mr. Matsui, the subcommittee, and your staff, for the hard
work and commitment that went into passing the Ticket-to-Work
and Work Incentives Improvement Act. Your leadership and that
of the subcommittee were crucial to ensuring that legislation
became law. We especially appreciate your decision to hold this
hearing so quickly after the recent approval of H.R. 5,
legislation that completely eliminates the earnings test for
people over age 65.
As you know, the Social Security Disability Insurance
Program was established to protect workers against the loss of
income due to a disability that prevented them from working.
When SSDI was established some fifty years ago, it was
reasonable to expect that people with the most severe
disabilities would almost certainly never work. The
technologies, services, and medications that exist today would
seem like science fiction to those who wrote the SSDI law in
the 1950s. Let me explain by putting this in some perspective.
A popular comic of the 1950's portrayed a main character whose
car had a phone in it, and a wristband that had a television
screen. Another had a car that could produce maps on a
television in the dashboard.
Today, this is not science fiction, it's reality. We have
cell phones that can call anywhere in the world, and cars can
be equipped with a map system that uses satellites to find your
location and give you directions. You can even watch your
favorite 1950's cartoon show via satellite broadcast to the on-
board television.
The reality for people with disabilities has changed too.
Work, a job, a career, things that were not possible fifty
years ago are today an expectation for people with even the
most severe disabilities. New technologies, new services,
evolving employment supports, and better medications have made
those expectations a reality. Yet we struggle to work under
rules created when things were quite different. The automobile
industry has kept up with the times, and so too, should
disability policy.
On many occasions in the past CCD has testified about the
difficulties posed by the SSDI earnings limit on the ability of
people with disabilities to achieve meaningful employment
before losing all cash benefits. The earnings limit, known as
the ``cash cliff'' creates an all-or-nothing situation that
causes people with disabilities to forgo all cash benefits
after only a meager amount of earnings are achieved. Currently,
the earnings limit is at $700 per month, or $8,400 per year.
This amount is at just about the federal poverty level for a
single individual. Earning just one dollar over this amount,
can cause an SSDI beneficiary to be determined no longer
eligible for cash benefits. Often times, the benefit amount
lost is nearly equal to the earnings limit, thus subjecting the
beneficiary to a whopping 50% marginal tax.
Further, workers with disabilities incur substantial
expenses in attempting to work. The cost of personal
assistance, of a wheelchair, an accessible van or hand
controlled car; assistive technology, hearing aids, animal
companions, computers, communications devices and the repair
and maintenance costs of the equipment all increase the costs
faced by individuals with severe disabilities who want to work.
As a result, far fewer beneficiaries attempt work than
would under a more reasonable, rationale policy. Many never
work above the earnings limit, even if they could. This policy
is just plain wrong. Worse, this policy creates financial costs
for the government, and the SSDI program. It costs the
government because people who could be working and paying taxes
aren't, and people who are working might be working more, but
aren't. It costs the SSDI program because people fear they
can't jump the cash cliff to achieve a level of earnings that
allow them to live above poverty, so they remain on full
benefits.
Further, although the earnings limit was recently raised to
seven hundred dollars from five hundred dollars, it took ten
years for the Social Security Administration to act on that
increase. And it took just as long to raise the earnings limit
to five hundred dollars from three hundred dollars in the mid-
1980's. These increases weren't even enough to keep up with the
low rate of inflation our economy has experienced these past 15
years.
For more than twenty years, the disability community has
advocated for changes in the SSDI program, and particularly
about the SSDI earnings cliff. Legislative advocacy concerning
the earnings limit has often taken many forms. However, certain
key principles should form the foundation for any congressional
action addressing the earnings limit. Those principles are:
1) Do No Harm--Changes made by Congress to earning limit,
or to the Social Security disability programs as a whole,
should ensure that no disability group is negatively affected.
Whatever Congress does, it must not enact policy detrimental to
any particular category of DI beneficiaries.
2) Equity--Should Congress take favorable action on
legislation that addresses earnings limits, Congress must
ensure equity among all DI beneficiaries.
There are a variety of options available to Congress that
would deal with the ``earnings cliff'' that beneficiaries face
if they try to work. We would welcome the opportunity work with
you, and subcommittee staff in developing a proposal that
eliminates the earnings cliff.
In this time of profound fiscal growth and economic
prosperity, Congress should ``fix'' the SSDI earnings limit to
allow all people with disabilities the opportunity to
contribute to this unprecedented economic expansion. We urge
Congress to finish the work substantially started with the
enactment of the Ticket-to-Work and Work Incentives Improvement
Act by removing the ``earnings cliff'' barrier to work.
Finally, while not directly on point regarding SGA, several
issues have come to the attention of the CCD Social Security
Task Force that we believe merit further attention. It is our
understanding that, for a ``disabled adult child,'' leaving the
Title II program as a result of earning above SGA after the EPE
has expired means the loss of ``disabled adult child'' status
for life. Many people do not understand that the benefits that
the parent has earned for the disabled adult child (severely
disabled since childhood) are permanently lost, and there is no
re-entry under SSA's current interpretation. We believe that
this must be fixed; otherwise, the purpose of the Ticket-to-
Work & Work Incentives Improvement Act will be thwarted for
those who qualify as disabled adult children. We believe that
the TTWWIIA clearly contemplated the ability of disabled adult
children to move on and off the program to the same extent that
other people with disabilities will be allowed to do so. The
statutory language establishing the eligibility category for
disabled adult children was clearly cited in every case that
eligibility for the SSDI program was cited.
In addition, we understand that SSA's interpretation
regarding the value to be placed on a worker's work effort
(regarding whether it exceeds SGA or not) is different for
people in supported employment depending upon whether the
individual is supported directly by an employer or whether the
individual is supported by services from an outside source,
such as a state-funded supported employment agency. Due to this
distinction, an individual's work effort could be found to
exceed SGA when the support is from a third party while that
same work effort could be found not to exceed SGA when the
support is from the employer. From the perspective of the
individual, this is an arbitrary distinction. Further, there
may be additional complications in that the nature and scope of
the support provided to the individual may be misunderstood
when making the valuation of work effort. For instance, while
the individual may be performing the actual task (bagging
groceries, assembling a package, etc.), it may be that the
individual would be unable to perform the task without the help
of the job coach in ensuring that the individual arrives at
work on time properly attired, that he/she interacts
appropriately with customers and co-workers, and that he/she
remains focused on the assigned job tasks, among other things.
We believe that this is an area that also needs further
examination if work incentives are to work as intended by
TTWWIIA.
Again, I thank the subcommittee for this opportunity to
testify. I will be glad to answer any questions you may have.
Tony Young
NISH
Director of Governmental Activities
Chairman Shaw. Thank you. Mr. Matsui
Mr. Matsui. Thank you, Mr. Chairman. I want to thank all
five of the panelists for their testimony today. I just have
one series of questions of Dr. Hanes.
Dr. Hanes, it is my understanding that in your written
testimony you talk about the profile of a disabled individual
when the program was first established, and then you have a
profile today of that same disabled individual. The original
profile was somebody who was in the workforce for years and
became disabled perhaps at the age of 50 or thereabouts, and
then received some benefits. Today's disabled individual is
somebody that perhaps has mental problems, emotional problems,
is much younger. Is that a correct representation of your
findings?
Dr. Hanes. Yes. I would like to just clarify that. If you
look at the prevalence of disability across the country, there
is a very interesting difference between the prevalence of
mental disorders as the primary disabling condition in both the
SSI and the DI beneficiary population. It appears to be much
more linked to the kind of industrial base that workers are
coming from.
We still see a lot of the musculoskeletal, the bodies that
are breaking down under manual labor in the southern areas of
the country, and it is very interesting, and it is an area that
I think merits further research. But I do think it is correct
to say that the face of disability has changed since the
Disability Insurance program was first enacted, and the most
single prevalent category of disability is mental impairment,
mental condition.
Mr. Matsui. And I guess the conclusion I am reaching from
your findings there is that the earnings limit years ago is
probably in need of significant adjustment for the nonblind
disabled today because they are younger and they still have a
lot of work years left, perhaps unlike those that were defined
as disabled 30 years ago, is that correct?
Dr. Hanes. I think that is an appropriate conclusion to
make, and some of the data that have actually been analyzed by
Social Security Office of Statistics and Evaluation have
projected the lifetime of benefits for this younger disabled
population, and it is very true that the younger--obviously,
the younger someone goes on the Disability rolls, the longer
the projection is that individual will be on the rolls.
The other piece of my testimony that is written, that I
would like to reinforce with you, is the primary reason for
leaving Disability Insurance is death. Fifty-five percent of
the people exit the program because of death. The next largest
category, I believe around 35 percent, is retiring or moving
from Disability Insurance to retirement benefits. And I think
there is fairly persuasive evidence that less than 1 percent of
people leave the Disability rolls permanently because of
employment, and the impact of a younger disabled population it
doesn't take heavy mathematics to understand the impact on the
trust fund, in particular, of having people on the Disability
rolls for much longer periods of time.
Mr. Matsui. Well, I want to thank you and the other four
panelists as well for their testimony. Thank you.
Chairman Shaw. Mr. McCrery.
Mr. McCrery. I am sorry I missed the first two witnesses'
testimony. Mr. VanOoteghem, could you expound a little on the
work-related expenses associated with your daughter's work?
Mr. VanOoteghem. Right now, she rides the bus to work, they
supply it, and she pays for the fare which is $2.87 per trip.
She doesn't really have any other expenses. We don't claim any
other expenses for her.
Mr. McCrery. How about Mr. Young?
Mr. Young. Yes, I would be happy to talk about my expenses.
Mr. McCrery. Well, the work-related expenses that would be
deductible from your income for purposes of staying under the
limit.
Mr. Young. Under impairment-related work expenses for
nonblind people, it has to be an expense that is incurred at
work. The majority of the expenses aren't incurred at work, it
is getting ready for work and getting to and from work. The
personal assistance that I use to get dressed in the morning,
people that need cuing and supervision to get ready, the
transportation to and from. If you have an employer, especially
one of the nonprofit employers, that provides transportation
for you, it is not a problem. If you don't, then you are stuck
with a huge bill every month trying just to get to and from
work.
Under the ADA, the employer can provide reasonable
accommodations that takes care of some of the work expenses,
and the other things are deductible. But by that time, you have
already incurred 75 percent of the work-related expenses that
you are going to get to in a situation.
Mr. McCrery. But those expenses you cannot deduct from--
Mr. Young. Those we cannot deduct, not from earnings to
bring it down below $700, nor are they available for deduction
on Schedule A of the 1040 Form.
Mr. McCrery. If you were here earlier today when we had
other panels, there was a lot of discussion about the
difference in the earnings limit for the blind disabled and the
nonblind disabled. Would any of you like to comment on that? Do
you agree or disagree that there is a rationale for the
disparity?
Mr. Young. I would certainly like to say that there is no
rationale that I can think of for treating one disability group
differently from another disability group int he types of
expenses that we incur. The level of expense is much more
related to the severity of disability and, frankly, the
geographic location in which one lives than it is to whether
you are of one type of disability or another. I can cite any
number of examples of people with various kinds of disabilities
that are going to have huge costs--a person with very high
technological needs, no matter what type of disability, is
going to have huge costs. A person on DI who is going to be
much more severely disabled is going to have higher costs than
a person not on DI, whether they are served by the VR program
or not. Persons who are not on DI are not going to be that
disabled and are not going to have the kind of work-related
costs that somebody who is on DI who, by definition, is more
severely disabled will have.
Mr. McCrery. Anybody else? Yes?
Mr. VanOoteghem. We watched in 1977 when people who are
blind received the retiree's earning limits. We didn't say much
then and there was no change until 1990 when the SGA level was
raised to $500 per month. I know our folks had to fight to make
this happen. In 1999, SGA went to $700, but with the raises in
minimum wage within the next three years, that is going to out
of our league again. We need some help, and we need indexing
for future increases in the SGA level. Even if it is not
retroactive, we need to be brought up to what people who are
blind have for their SGA level.
Dr. Hanes. I would like to comment just for a moment on
that.
Mr. McCrery. If you don't mind, comment on that, and also
comment on the cliff situation, would it be more helpful for us
to smooth out the cliff, or more helpful to just raise the
earnings limit and still have a cliff.
Dr. Hanes. Well, I wanted to comment on the cost because
some of the previous testimony talked about the cost in the
Vocational Rehabilitation Program, for example, and I think it
is very important that we consider the total cost of living
with a severe disability. And when we think about the total
cost and the costs that are incurred to the individual, and
also the costs that are incurred in the Medicaid program--for
example, I can speak with some knowledge about people with
psychiatric disabilities are incurring tremendous costs through
prescription drugs and intensive case management and
psychotherapy.
When you look at costs across type of disability, I think
it is very easy to make a persuasive argument how all people
with severe disabilities incur a tremendous amount of cost,
both personal and to the system, in order to be able to be job
ready.
And so, although I would not make a statement that one type
of disability is more deserving than the other, I think that it
is incumbent on all of us to factor in the total cost of living
with a disability.
And in terms of the cliff, I think anything to mitigate the
cliff is going to get people back to work. In my own research--
and now I have heard from probably 1700 people across the
country--the fear factor that someone spoke about earlier is so
strong that until you can deal with that fear in ways that
people trust, that they know there is a safety net there that
they can trust, I don't think we are going to see large numbers
of people going back to work no matter how you deal with SGA.
Mr. McCrery. Thank you. Anybody else?
Mr. Gallagher. I was director of a program for five years,
earning over $35,000 a year with full Blue Cross, and when I
had my last esposode due to neuroleptic malignant syndrome, I
had a ventricular drillout, which means I had a blood clot, I
had to change my medications to Closeral and Depokote. These
medications, while the technology is new, are very expensive.
It is close to $1,000 a month, which I don't have the insurance
to pay for. Blood is drawn when you first start out, you get
your blood drawn every day, then it is every week, and after
three years now I have been taking it, it is every two weeks.
The cost factor of the medications alone, the factors of going
back to seeing the psychiatrist, your medical doctor, and all
the medical problems that come because of the medications, it
is keeping me on Disability. It makes no sense at all. I am
capable of working. I do want to work. It is just it is very
frustrating. Right now, I owe the Social Security
Administration I don't know how many thousand dollars. My dad
is my payee. I am 42 years old, and I have a Master's Degree. I
have been successful over the last ten years. I don't know. I
don't have the answers, that is why I am here today, because I
am looking for you all to help find the answer. I don't know
what the answer is. I do know that I am sure you will figure it
out.
Mr. Young. If I might, just briefly, obviously, I think we
need to take care of this earnings cash cliff because it is a
huge barrier. But the SGA level, because it is the first
determiner of disability, work disability, if you don't index
it to wage inflation, every year the wages go up, the
definition of disability changes for the worse for people. It
is like nonlegislative clamping down on the definition because
it just keeps crashing down on people. And if it goes ten
years, then you have got a substantial change in the
definition.
So, I would very much urge you guys to look at the
possibility of indexing that SGA.
Chairman Shaw. Mr. Gallagher, I am interested. You said
that you earned more. How far over the limit does the Social
Security Administration claim you went?
Mr. Gallagher. I don't know. This is back when I was the
direct care staff. I was three years on Disability back in the
1980s, and I was earning over $560 a month at the time. My dad
has been taking care of my finances, and my dad and I are not
on the the best of relationship we have a business
relationship, we don't have a very emotional relationship. I do
not know the financial parameters. I do know that he is paying
back out of my Social Security check $100 a month back to SSA
because of the overpayment. I do know that much.
Chairman Shaw. As I understand the law you may have just
stepped over the line slightly and now are incurring a huge
debt.
Mr. Gallagher. That was back in the 1980s, I believe it
was. Correct.
Chairman Shaw. Who is your congressman?
Mr. Gallagher. I am from Detroit, Michigan area.
Chairman Shaw. That could be any number of people. You
might want to contact their office and ask them to take a look
at it for you. If you don't know the figures, you are certainly
entitled to know them.
Mr. Gallagher. The problem is, my dad is so private about
things. He is paranoid that I am going to lose all my benefits,
so he doesn't disclose anything to me about my finances. I live
in his house. I pay him $400 rent. It is a $150,000 house. I
could not live there without the support you know, it is just
very frustrating. I don't have the answers. I am estranged with
my father. He is my payee, but I do work part-time currently.
Chairman Shaw. Well, this hearing is held for a definite
purpose, it is not just to allow people to vent their anger. I
know Wendy told us that she was very angry, and I think that
certainly adds to the intensity of the testimony that we have
gotten today, and I think it has been very open and forthright,
and I think all the witnesses have been great.
We are taking a look at the figures and what we can do, and
we recognize the problem. I think the abruptness of the cutoff
is very troublesome to me. Mr. Matsui and I--you wonder
sometimes, when we start whispering to each other up here, what
we are talking about--we weren't talking about the ballgame, we
were talking about the subject at hand and what we might be
able to do.
Mr. McCrery has talked about putting up some type of
gradual tapering of benefits after you reach the limit. I am
very troubled by your situation, Mr. Gallagher, where you
stepped over the line and now you have got all hell to pay for
it. That is a big problem, and the law should not be that way
and we need to take a close look at it. On the other hand, we
also have to be careful that these programs don't get out of
hand and that we are concerned about the solvency of the
system, and that is something we have to constantly work on.
And we are not going to stop with this hearing, we are going to
continue to work and see what we can do to change things.
I want to thank this panel and all the panels and the
people who stayed with us all afternoon. Thank you very much
for being here, and this hearing is adjourned.
[Questions submitted by Chairman Shaw to Mr. Gallagher, Dr.
Hanes, Mr. VanOoteghem, and Mr. Young, and their respective
answers, follow:]
Mr. David Gallagher
c/o Paul Seifert
International Association of Psychosocial
Rehabilitation Services
10025 Governor Warfield Parkway, #301
Columbia, MD. 21044-3357
Dear Mr. Gallagher:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following questions:
1. Individuals with disabilities can actually earn more than the
SGA limits and stay eligible for benefits. The reason is they can
subtract work expenses related to their disability in determining
earnings subject to the limit. (For example, if an individual who is
disabled earns $900 per month but has $300 in work expenses, their SGA
is $600 -below the $700 limit.) Are you familiar with the provision? Is
it being used? How many individuals with disabilities take advantage of
these deductions? Is it effective? Should it be changed?
2. Does working help your medical condition? Would you work more if
you weren't afraid of losing your disability benefits?
I thank you for taking the time to answer these questions for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 19, 2000
The Honorable Clay Shaw
Chairman, House Social Security Subcommittee
B-316 Rayburn House Office Bldg.
Washington, DC 20515
Attn: Kim Hildred, Staff Director
Dear Mr. Chairman,
Thank you for the opportunity to address questions regarding
Impairment Related Work Expenses (IRWEs) and other work-related issues.
First, I want to thank you for holding the March 23rd hearing on the
Substantial Gainful Activity level in the Social Security Disability
program. For too long beneficiaries have struggled against the unfair
SGA limit placed on their ability earn. I hope that the hearing, and
these answers, will help the Subcommittee develop a response to the
concerns expressed on March 23rd.
I am aware of the IRWE provision but have never used it. Further,
although I have been on and off benefits I have never been informed by
Social Security about how the provision could benefit me. I hope that
the Work Incentive Planners that are a part of the Ticket-to-Work &
Work Incentives Improvement Act will change this all beneficiaries.
Also, as you know I have a Master's of Social Work and conduct
group self-help counseling sessions for mental health consumers at my
program in Michigan. All the people in my groups have severe mental
illnesses, and many work, yet none had heard of the IRWE benefit.
Further, no other consumers I have talked with seem to be aware of this
benefit. I should qualify this statement by saying that many
beneficiaries do not fully grasp the complicated work incentives in
SSDI and SSI. So the fact that everyone I talked with didn't know what
an Impairment Related Work Expense deduction was or if they used it
does not mean that a case manager or other counselor didn't utilize the
deduction on their behalf.
The IRWE could benefit some SSDI beneficiaries, but overall it is a
limited answer to a bigger problem, namely the SSDI SGA earnings limit/
cash cliff. The IWRE is limited in several ways. First, the beneficiary
has to incur the expense in the first place, and pay for it out of
pocket. Second, to be effective the amount of the IRWE has to equal or
surpass the amount of income above SGA. If not, then the IRWE doesn't
protect you. Third, once you use an IRWE, you have to keep it to remain
on benefits. For example, if the costs of medications are paid for out
of pocket then they can be used as an IRWE. (The amount spent on
medications, which incidentally might be more than the benefit, can't
be used for other necessities). If a person changes jobs and the
employer's health plan pays for part of the medications, they might
lose enough of the IWRE to lose benefits without earning enough to
cover the non-reimbursed cost of the medications.
Here's how loss of an IWRE could affect a beneficiary:
If the beneficiary's DI check is $500 and they earn $1,300, they
need over $600 in IRWEs to keep $500 of benefits. (i.e. $500 in
benefits and $700 in earnings after the IRWE ($1,300 -$600) for a total
income of $1,200). Now that works out better than losing one's benefit
AND having to pay for the medications. However, if the employer's
health plan picks up $300 of the medication cost, the beneficiary loses
$500 in benefits and still must pay the $300 co-pay for the medications
(MH parity notwithstanding, 50% co-pays are NOT unusual for mental
illness), plus the other costs of the plan. The beneficiary earns
$1,300 but loses all the DI benefit because the IRWE is too low ($300).
They also pay the $300 in co-pay for the medications, and now has only
$1,000. Now, I suppose the person could refuse the healthcare, but how
wise is that?
Also, not every one with a disability has impairment related work
expenses or has enough expenses to keep from losing all their benefits.
Because of this, the IRWE program is at best a selective solution to
the cash cliff problem. I believe that the IRWE program working in
conjunction with sliding-scale cash offset in the SSDI program would
better address the cash cliff and more fairly benefit ALL working SSDI
benefits rather than just a lucky few.
Finally, in response to the second set of questions, there is much
research that proves that work does help a person cope better with
their mental illness. Work can't be called ``treatment'' nor does it
have a direct medical impact on mental illness in terms ``curing'' the
medical condition (at least not that any research has proved). However,
by adding a strong sense of self-worth and providing an opportunity at
independence and self-reliance, work does improve the lives, outlook,
and overall psychosocial/life condition of people with mental illness.
In this respect, work can be extremely beneficial for consumers and it
has been for me.
As for working more, if the SSDI program was geared to encouraging
more work I could work more. The cash cliff is tremendously
discouraging and consumers are acutely aware of it and avoid it at any
cost. Almost every consumer I talked to about IRWEs mentioned the cash
cliff as being a problem. Even if earnings don't approach the cliff
people fear that some unforeseen circumstance, like an increase in the
minimum wage or a bonus, might push them over the cliff. This keeps
people from doing the best they can.
In closing, I urge you Mr. Chairman and the Congress to eliminate
the cash cliff. Again, thank you for the opportunity to testify and to
respond further to your questions.
Sincerely,
David Gallagher, MSW
Eastpointe, MI 48021
April 26, 2000
Pamela P. Hanes, Ph.D.
Oregon Health Sciences University
3181 Southwest Sam Jackson Park Road
Portland, OR 97201
Dear Dr. Hanes:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries New
Roman. In order to complete our hearing record, I would appreciate your
answering the following questions:
1. Your testimony indicates that the face of disability has changed
dramatically since 1958. The largest single category of disability in
the DI and SSI population is mental disorders followed by muscular-
skeletal disorders. Each individual's experience of functional
impairment is unique and what may facilitate gainful work activity for
individuals with one disability may not necessarily lead to gainful
work activity for an individual with another disability. You indicate
that we should re-think and subsequently re-engineer the disability
safety net. In addition, you refer to employment and structural
barriers that need to be overcome. To accomplish what you suggest, what
factors should we be focusing on?
2. Individuals with disabilities can actually earn more than the
SGA limits and stay eligible for benefits. The reason is they can
subtract work expenses related to their disability in determining
earnings subject to the limit. (For example, if an individual who is
disabled earns $900 per month but has $300 in work expenses, their SGA
is $600--below the $700 limit.) Are you familiar with the provision? Is
it being used? How many individuals with disabilities take advantage of
these deductions? Is it effective? Should it be changed?
3. In your research about barriers to work, did you find that
barriers to work differ considerably depending on the type of
impairment an individual has? Did you find that individuals who are
blind faced greater barriers than those who are not blind?
I thank you for taking the time to answer these questions for the
record and would appreciate your response by no later than May 19,
2000. New Roman In addition to a hard copy of your response, please
submit your response on an IBM compatible 3.5-inch diskette in
WordPerfect or Microsoft Word format. New Roman If you have any
questions concerning this request, please feel free to contact Kim
Hildred, Staff Director, Subcommittee on Social Security at (202) 225-
9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 16, 2000
E. Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
Committee on Ways and Means
U.S. House of Representatives
Washington, D.C. 20515
Dear Chairman Shaw:
Thank you for allowing me to present further information on work
incentives and disincentives for blind and disabled beneficiaries for
your hearing record. As I stated during my oral testimony, the Oregon
Health Policy Institute is currently engaged in a very unique research
project that will, when completed, provide a comprehensive picture of
the dynamic relationship between disability, health, public benefits,
employment, and overall quality of life. Part of the uniqueness of this
research effort is that the detailed picture presented in our
evaluation findings will focus on the social and economic experience of
living with a disability based on whether an individual's primary
disabling condition is physical, developmental, sensory, or
psychiatric.
At this time I will respond to each of the three questions you
presented in your April 26, 2000 letter.
1. What factors should the subcommittee focus on in re-thinking and
subsequently re-engineering the disability safety net?
I suggest that a primary focus should be on understanding the
differing experience of disability that derives from whether an
individual lives with a physical, cognitive, mental, or multiple
impairments. For too long disability policy has assumed a homogeneous
population, that is, that all functional limitation on a continuum from
major to minor, and regardless of the underlying condition, produces
the same outcome -disability. Disability research has suffered from the
same myopic view, we study the health status of people with
disabilities or the employment status of people with disabilities and
have engaged in very few, if any, disability studies of employment
behavior that control for type of disability and its effect on
individuals' employment patterns and earnings histories.
Although our current understanding of cross disability employment
dynamics is still quite limited, we can learn from what is known about
the employment patterns, health status, and employment-related support
needs within particular disability groups.
I suggest that a major disability-specific focus to be considered
in re-engineering the safety net ought to concern the issues
surrounding reasonable accommodation, assistive technology and devices,
and the supportive services necessary to return to work or increase
earnings to a level of economic self-sufficiency.
To illustrate this point, there have been significant advances in
the development of assistive technology and devices that allow
individuals with quadriplegia to drive their own vehicles, manage
computer websites, become professional artists and craftspeople--in
each case, a technological breakthrough or device has been so designed
as to overcome historic misfits between person and environment. For
individuals with sensory impairments the technological advances are
different but equally impressive, for example the growing availability
and uses of service dogs, large print books and publications, advances
in telecommunications and electronic media access, and the increasing
numbers of individuals trained in American Sign Language, these
technologies and adaptive devices have served to mitigate many of the
barriers that previously prevented individuals with sensory impairments
from full integration into community affairs and the world of work.
Among the most challenging and intractable problem areas in terms
of accommodation and assistance are those faced by individuals with
severe psychiatric disabilities. The primary work and community
integration support available to these individuals comes in the form of
pharmacological assistance. Because mental disabilities are largely
invisible when the symptoms are controlled, the true costs associated
with drug therapies at the personal and societal level are not widely
known or understood. Just as the gentleman who testified at your
hearing reported, the drugs that are necessary to stabilize acute
psychiatric symptoms are often toxic to the user, producing potentially
life-threatening side effects that exacerbate rather than ameliorate
the misfit between individual and environment. Another important
component of the support needed by individuals with psychiatric
disabilities is on-going and intensive clinical case management that
relies on professional assistance as opposed to technological devices
or equipment.
It is important to recognize that costs incurred in getting
individuals with severe disabilities into competitive employment are
borne throughout a large number of federal, state, and private agencies
and organizations and therefore cost comparisons between disabilities
groups must be made with extreme caution. For example, a large portion
of the costs associated with supporting individuals with psychiatric
disabilities in their return to work efforts is borne through the
Medicaid program. Vocational rehabilitation services have historically
underserved individuals with psychiatric disabilities so a cost
comparison across disability types in this program is not appropriate;
particularly when the underlying assumption is that costs associated
with vocational rehabilitation service agencies are the sole input in
the vocational rehabilitation process.
Another critical dimension of a disability-specific focus is
sensitivity to the impact that the underlying disabling condition has
on overall work effort, particularly from a longitudinal perspective.
For many individuals with physical disabilities once the needed
technology has been employed, there is a high likelihood of stability
in the work environment. The caveat to this statement is of course the
effect that the underlying disabling condition can have on compromising
the health status of individuals with physical disabilities. Many
physical disabilities derive from a chronic health condition that
manifests itself in progressive loss of function, acute medical
episodes, chronic pain, and physical deterioration. Individuals with
multiple sclerosis, HIV/AIDS, Parkinson's Disease, all will experience
setbacks in their work effort that are directly related to their
disabling condition. The same is true among individuals with severe
psychiatric disorders whose medications cease to be effect or worse
yet, become toxic.
The primary point I want to make about a disability-sensitive focus
is to encourage subcommittee members to look beyond the label
'disability' and instead to focus on the personal dynamics of living
with a severe disability, recognizing that these dynamics manifest
themselves differently based on the type of disabling condition and the
anticipated course of the disease or chronic condition.
Reengineering the disability safety net requires an acknowledgement
of the predictable nature of disability -disability does not go away
over time, nor does it disappear because of earnings in excess of some
fixed, albeit, arbitrary dollar figure. It is important to remember
that without accommodations, technological advances, and changing
societal attitudes, competitive employment among individuals with
severe disabilities would be an unrealistic and unattainable policy
goal.
I suggest that the policy goal of the disability safety net should
be to maximize the number and types of opportunities available to
individuals with severe disabilities who want to work and to allow them
to pursue competitive employment at whatever level is reasonably
possible in terms of hours worked and monthly earnings. We know from a
growing body of survey research conducted at the Oregon Health Policy
Institute that the vast majority of individuals with significant
disabilities want to be employed, want to have meaningful life rolls,
and strongly believe that work is a primary way to give something
important back to their community. The fear that gets played out in
high rates of unemployment in this population is quite understandable
when the choice is between living entirely on poverty level or near
poverty cash assistance with health insurance or the possible permanent
loss of a cash assistance and health care safety net when the
possibility of failure in the workplace looms largely.
2. Are you familiar with existing Social Security work incentives
and how widely are they being used?
Yes, I am familiar with the impairment-related work incentive
(IRWE) program as well as the 1619 (a) and (b) Work Incentive
provisions and the Plan to Achieve Self-Sufficiency (PASS) program. The
best source for tracking the impact of these work incentive programs on
the work efforts of Social Security beneficiaries is the Quarterly
Report on SSI Disabled Workers and Work Incentive Provisions issued by
the Social Security Administration and available on their website. The
short answer to your question is that, with the exception of 1619,
these work incentive programs are largely unutilized. A snapshot from
the March 1999 report reveals:
Only 6% of the total SSI caseload were working during the
first quarter of 1999
72% of SSI disabled workers had earned income below $500/
month; 30% earned $65 or less
In general, the percentage of SSI disabled workers was
higher in the Northern states than in the Southern states
The greatest use of a work incentive provision was 1619
-30% of disabled workers used this provision
3% of SSI disabled workers used the IRWE provision
1% of blind disabled workers used the Blind Work Expense
(BWE)
.3% of disabled workers used the PASS program
My opinion about these work incentive programs is largely shaped by
the professionals and advocates in the field who work on a daily basis
with individuals with severe disabilities who want to return to work,
are returning to work, or are choosing not to return to work because
they fear the loss of disability status, health benefits, and a cash
assistance safety net. The overwhelming sentiment expressed is that
existing work incentive programs are too complicated, result in
overpayments, lack real protection against set backs in the workplace,
and are subject to interpretation based on who one talks to at which
agency. More importantly, there has been a lack of trust in the past in
the individuals who administer these programs. I have come to
appreciate the elegance of the strategies employed by Wisconsin and
Vermont in their work incentive demonstration projects which are
designed, simply stated, to make return-to-work incentives as simple
and straightforward as possible for the consumer.
Work incentives that support individuals on the path to economic
self-sufficiency, that allow them to gradually work off benefits, that
recognize the extraordinary expenses associated with accommodating
functional impairments in the workplace and community, and that
function as a true safety net, not a way of life, should be the goals
of an efficient, user friendly disability safety system.
8. In my research did we find that barriers to work differed
depending on type of impairment? Did we find that blind individuals
face greater barriers than others?
Our preliminary baseline data suggest that significant differences
exist in perceived employment barriers faced by individuals based on
type of impairment, particularly striking differences appear to exist
between individuals with physical as contrasted with mental
impairments. The total number of individuals who are blind and
participating in the 3-state work incentive initiatives is too small to
segregate their responses from other types of physical disabilities.
I am happy to share with you and your staff the baseline
frequencies related to work attitudes and motivation, attitudes and
beliefs about work and benefits, and issues of self-esteem among
individuals participating in the Wisconsin Pathways to Independence
program. These data represent 187 program participants as of 4/00.
Because of the preliminary nature of these data, I respectfully request
that these data not be made a part of the public record and that they
are not duplicated or disseminated until such time that our research
team does so.
These data provide an as yet incomplete picture of the individuals
who are participating in the 3-state work incentive projects, what they
do illustrate is a range of beliefs and perceptions about the value of
work, fears about working, and the profound impact that living with a
disability has on the self-esteem of individuals. When our study is
completed in December, 2001 we will have linked these perceptual data
with the actual work experiences and earnings of participants and be
able to discuss more fully the impact that type of impairment has on
the work efforts of a group of severely disabled Social Security
beneficiaries.
Please feel free to contact me for further information as needed. I
am happy to be able to add our research findings and policy experience
to this important public policy discussion.
Pamela P. Hanes, PhD
Associate Professor of Public Health and Preventive Medicine
Associate Director
Oregon Health Policy Institute
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Mr. William VanOoteghem
c/o Marty Ford
The ARC
1730 K Street, N.W.
Washington, DC 20006
Dear Mr. VanOoteghem:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following question:
Individuals with disabilities can actually earn more than the SGA
limits and stay eligible for benefits. The reason is they can subtract
work expenses related to their disability in determining earnings
subject to the limit. (For example, if an individual who is disabled
earns $900 per month but has $300 in work expenses, their SGA is $600--
below the $700 limit.) Are you familiar with the provision? Is it being
used? How many individuals with disabilities take advantage of these
deductions? Is it effective? Should it be changed?
I thank you for taking the time to answer this question for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
May 18, 2000
The Honorable E. Clay Shaw
Chairman
Subcommittee on Social Security
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Shaw:
This is in response to your letter of April 26 requesting
additional information on work incentives for blind and disabled Social
Security beneficiaries. Specifically, you asked:
Individuals with disabilities can actually earn more than the SGA
limits and stay eligible for benefits. The reason is they can subtract
work expenses related to their disability in determining earnings
subject to the limit. (For example, if an individual who is disabled
earns $900 per month but has $300 in work expenses, their SGA is $600 -
below the $700 limit.) Are you familiar with the provision? Is it being
used? How many individuals with disabilities take advantage of these
deductions? Is it effective? Should it be changed?
According to the Social Security Administration, about 9,500 people
with disabilities take advantage of this provision. It can be effective
in assisting an individual to show the net value of their work efforts,
after all of the disability-related expenses of work are deducted.
However, I believe that it is important to point out that a distinction
is made between the expenses that an individual can deduct depending on
whether they are blind or not. As I understand it, people who are blind
can deduct anywork-related expense, while all other people with
disabilities who are not blind can deduct only disability-related work
expenses.
In my daughter Wendy's case, she does not have many disability-
related work expenses. Her transportation costs are minimal since her
workcenter provides transportation. However, I do know that for many
people with mental retardation who cannot drive, transportation costs
to and from work can be very high in relation their earnings,
particularly in rural areas or in cities without adequate public
transportation systems. As I understand it, these transportation costs
are excludable. This provision should be continued.
There are also many people with needs for services while they are
working. One typical service is that of a ``job coach'' in a supported
employment setting. While many other services are deductible from SGA,
supported employment services are treated differently depending upon
who provides such services. This is a problem for many people with
mental retardation and is discussed in the statement for the record
submitted by the Consortium for Citizens with Disabilities. I urge you
to address that issue as well.
Thank you for this opportunity to provide additional information.
Please let me or Marty Ford (202/785-3388) know if I can help you in
any further way.
Sincerely,
William VanOoteghem
William VanOoteghem
c/o The Arc of the United States
1730 K Street, NW Suite 1212
Washington, DC 20006
April 26, 2000
Mr. Tony Young
NISH
2235 Cedar Lane
Vienna, VA 22182
Dear Mr. Young:
Thank you for testifying before our Subcommittee regarding work
incentives for blind and disabled Social Security beneficiaries. In
order to complete our hearing record, I would appreciate your answering
the following question:
Individuals with disabilities can actually earn more than the SGA
limits and stay eligible for benefits. The reason is they can subtract
work expenses related to their disability in determining earnings
subject to the limit. (For example, if an individual who is disabled
earns $900 per month but has $300 in work expenses, their SGA is $600--
below the $700 limit.) Are you familiar with the provision? Is it being
used? How many individuals with disabilities take advantage of these
deductions? Is it effective? Should it be changed?
I thank you for taking the time to answer this question for the
record and would appreciate your response by no later than May 19,
2000. In addition to a hard copy of your response, please submit your
response on an IBM compatible 3.5-inch diskette in WordPerfect or
Microsoft Word format. If you have any questions concerning this
request, please feel free to contact Kim Hildred, Staff Director,
Subcommittee on Social Security at (202) 225-9263.
Sincerely,
E. Clay Shaw, Jr.
Chairman
June 11, 2000
The Honorable E. Clay Shaw, Chairman
Subcommittee on Social Security
House of Representatives
Washington, DC 20515
Dear Chairman Shaw:
This is in response to your letter of April 26 requesting
additional information on work incentives for blind and disabled Social
Security beneficiaries. Specifically, you asked:
Individuals with disabilities can actually earn more than the SGA
limits and stay eligible for benefits. The reason is they can subtract
work expenses related to their disability in determining earnings
subject to the limit. (For example, if an individual who is disabled
earns $900 per month but has $300 in work expenses, their SGA is $600--
below the $700 limit.) Are you familiar with the provision? Is it being
used? How many individuals with disabilities take advantage of these
deductions? Is it effective? Should it be changed?
I am familiar with this work incentive provision, although I did
not personally make use of it when I was on SSDI. This provision is
being used to a limited extent by beneficiaries. According to the
Social Security Administration, about 9,500 people with disabilities
take advantage of this provision.
In my view, Impairment-related work expenses could be effective in
assisting an individual to show the net value of their work efforts, if
certain improvements are made.
1. Currently, a distinction is made between the expenses that an
individual can deduct depending on whether or not they are blind. Blind
beneficiaries can deduct any work-related expense, while people with
disabilities who are not blind can deduct only disability-related work
expenses. Beneficiaries who have multiple significant disabilities have
as many or more expenses related to work as do Blind beneficiaries. All
beneficiaries who work should be allowed to deduct all work-related
expenses
2. The Social Security Administration field office determines
whether expenses may be deducted from earnings. The determinations are
rarely done on a consistent basis. These expenses are often disputed by
SSA as to whether they are disability-related, and are excluded
inconsistently. SSA must issue better guidance to Field Office
personnel and improve consistency in work incentives determinations.
3. Beneficiaries need better decision making tools to determine how
IRWE can work for them. SSA should make available decision-support
software, such as WorkWORLD, to beneficiaries and their families so
that truly informed decisions can be made.
While the IRWE could benefit some SSDI beneficiaries, overall it is
a limited answer to a bigger problem, namely the SSDI SGA earnings
limit/cash cliff. The IRWE is limited in several ways.
1. The beneficiary has to incur the expense in the first place, and
pay for it out of pocket.
2. To be effective the amount of the IRWE has to equal or surpass
the amount of income above SGA. If not, then the IRWE doesn't protect
you.
3. Once you use an IRWE, you have to keep it to remain on benefits.
For example, if the costs of personal assistance services are paid for
out of pocket then they can be used as an IRWE. (The amount spent on
PAS, which might be more than the benefit, can't be used for other
necessities).
Also, not every one with a disability has impairment related work
expenses or has enough expenses to keep from losing all their benefits.
Because of this, the IRWE program is at best a selective solution to
the cash cliff problem. I believe that the IRWE program working in
conjunction with sliding-scale cash offset in the SSDI program would
better address the cash cliff and more fairly benefit ALL working SSDI
benefits rather than just a lucky few.
Thank you for this opportunity to provide additional information.
Please call me at 703-425-8633 or e-mail at [email protected] if
I can help you in any way.
Sincerely,
Tony Young, Director
NISH Governmental Activities Office
Vice Chairperson
Consortium for Citizens with Disabilities
[Whereupon, at 1:50 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
The Honorable E. Clay Shaw, Chair
House Committee on Ways and Means
Subcommittee on Social Security
B316 Rayburn House Office Building
Washington, DC 20515
March 27, 2000
American Council of the Blind
Dear Chairman Shaw and Members of the Subcommittee:
Please accept the appreciation of the membership of the American
Council of the Blind for the serious consideration your subcommittee is
exercising in reviewing the Social Security Administration's program of
disability insurance that impacts upon our members throughout this
land. We offer the following testimony to assist the subcommittee with
this important albeit daunting task.
There is no question that the pace of our economy is outstripping
the allowable income that a blind person can make before SSDI benefits
are lost. The net effect of this phenomena is to discourage those
receiving benefits from going to work in fear of losing the financial
and medical security provided through SSDI. This situation is further
complicated by the fact that blind persons must rely upon the cash
value of benefits plus whatever limited earnings we can make to pay for
service and equipment needs not available under other programs that
currently address many similar needs of persons with other
disabilities. These expenses include, but are not limited to readers,
adaptive hardware and software, low vision magnification devices, dog
guide medical costs, orientation and mobility equipment, and a high
reliance upon taxi and other transportation costs.
If we are to arrive at a solution to the problems described above,
while maintaining faith with the workforce paying into Social Security,
then we simply must find a way to help beneficiaries locate employment
that offsets or eliminates reliance on the SSDI program while
contributing to the revenue base of Social Security. Here is how.
ACB suggests that the earnings limit for blind persons be either
totally removed (See attached letter of personal testimony from a woman
who is blind) or set to the earnings limits of what elders had before
the passage of HR5. In the former case, all disincentives to work would
be removed and increased revenues to the treasury would result. In the
latter case, this would allow for an eventual $30,000 in earnings
before benefit loss. ACB further proposes that the earnings limit be
automatically raised based upon inflation in order to avoid recreating
the current situation where the SSDI program has become counter-
productive to its original intent. Moreover, ACB recommends eliminating
the cliff effect of benefits lost at a certain income level by
decreasing the SSDI benefit by one dollar for every three earned over
the earnings limit. These approaches would resolve the cash benefit
issues and ACB suggests that the medical issues could be resolved by
allowing the previous cash beneficiary to purchase Medicare for his or
her health needs.
ACB further believes that raising the SGA levels for other
disability groups to that of the earnings limits for the blind would be
appropriate if expanded Medicare coverage of blindness related services
and equipment were to occur as a question of equity with other
disabilities. Only in this fashion could a ``do no harm'' and fairness
oriented approach to blind persons be accomplished.
These concepts represent a way to provide real incentives for
recipients to work, greater revenue growth to the Social Security trust
fund, equity in disability policy, and a new view of disabilities as
participating in the national economy rather than being viewed as a
cost to it.
Please feel free to communicate with me to further explore the
options presented above, and I and ACB wish the subcommittee every
success in your efforts.
Sincerely,
Charles H. Crawford
Executive Director
Jenine Stanley
March 22, 2000
House Ways & Means, Social Security Subcommittee
RE: Earnings Income Limits for Blind People
I am writing this letter in hopes that it will be shared by
representatives of the American Council of the Blind with the House
Ways & Means, Social Security Subcommittee. I would like the members of
this committee to know, through my own personal story, why removing the
earnings limits for blind people is so crucial to maintaining or even
establishing independence.
I am a college graduate and have been employed in the not-for-
profit sector since 1988. Since 1991 I have been receiving Social
Security Disability Insurance due to my blindness. I have also
attempted to work, within the limits imposed by the Social Security
Administration. For me, the ability to work, to sustain gainful
employment, is vital to my mental and physical well being.
In America, people are measured, rightly or wrongly, by the work
they do. What one does for a living is often the first question asked
in social conversation. For people with disabilities, especially blind
people who have been the recipients of some of the most negative
stereotyping in history; being able to state a profession or employer
holds a very important place. It equalizes ``us'' with ``them'' and
removes the stigma of ``charity for the blind.''
The ability to be gainfully employed also removes those old
stereotypes of blind people as simply musicians, chair caners or
helpless wards of the state or their families. This ability to work,
however, is often marred by the complex rules and regulations of the
Social Security Administration.
Blind people are faced with significant lag time in processing any
changes to their Social Security status, such as reporting of
employment or benefits decisions because all applications noted as
being from ``blind'' recipients must go through a special office in
Baltimore. As a result, I and many other blind people who want to work,
do so under the threat of having our benefits, income tax returns and
even salaries garnished upon decision that are often up to four years
in the making.
I have worked as a private contract employee for the State of Ohio
in two different departments since 1996. In 1998 my income tax refund
was garnished because I failed to appeal a decision of the Social
Security Administration I knew nothing about. This decision involved me
making an amount over and above the Substantial Gainful Activity limit.
When I looked into the matter, I was told that there was nothing I
could do. My debt to the SSA was paid and it was just too bad that I
lost my tax return, but. . .
Now, I continue to work as a contract employee. I keep meticulous
records and only work eight hours a week as I continue my education. At
some point, I will want to work more. Logic says that I should be able
to simply end my reliance on SSDI benefits and return to work, but
things are not that simple.
Like many Americans, I live in an urban area that suffers from
``urban sprawl.'' Many of the jobs I am qualified for are located far
from public transportation. I do not drive. Due to the low unemployment
rate in my city, Columbus Ohio, it is very difficult to secure
dependable transportation, either by taxi or paratransit services. This
is only one expense associated with my blindness that keeps me from
employment at the level I desire. I must also purchase my own computer
equipment and other adaptive devices if I expect to have tools to help
me do my job. The consumer, the blind person, to assure a proper fit of
technology, best purchases these devices. Although state rehabilitation
services may cover some of the items I need, the time
lag is too great for my employment prospects.
Just as people over sixty-three years of age want the freedom to
continue to work while earning Social Security benefits, I, as a blind
person, want and need the extra assistance provided by SSDI. I have
paid into the system for over ten years now. I truly deserve its
benefits, including the ability to work without the fear of having
everything taken away.
This fear, this reluctance to seek employment that is equal to my
potential, is specific to blindness in that our claims, our decisions
and our appeals are significantly delayed by being sent to Baltimore
rather than decided at the local SSA office as such situations are for
people with other types of disabilities. I would think that the blind
population is so small compared to the rest of the SSDI or SSI
recipient population, that allowing no cap on Substantial Gainful
Employment would not effect the budget any more significantly than
doing so for seniors who have just received such benefits through House
and Senate actions.
I urge you to please consider lifting the cap on earnings for blind
people. Otherwise, we will continue to be under or unemployed and
painful destructive stereotypes will continue both in the workplace and
the public. I appreciate your attention to my opinions and sincerely
hope that you will take them into consideration in your debate.
Sincerely,
Jenine Stanley
Statement of the American Network of Community Options and Resources,
Annadale, Virginia
The American Network of Community Options and Resources
(ANCOR) commends the subcommittee for its work to remove work
barriers for individuals with disabilities through passage last
year of the Ticket to Work and Work Incentives Improvement Act
of 1999 and for its continued work in examining remaining work
disincentives in the Social Security Disability Insurance
program (SSDI). ANCOR is concerned about the changes being
considered to the Social Security earnings limit for SSDI
beneficiaries, also known as the substantial gainful activity
(SGA) level. If there are to be changes to the earnings limit
for SSDI beneficiaries, ANCOR urges the Committee to make
changes that will ensure equity among benefits for all people
with disabilities who receive SSDI benefits, not just for
individuals with one type of disability.
As the Committee members know, most SSDI beneficiaries must
limit their earnings to $700 per month. At any amount over
$700, beneficiaries lose all cash benefits. However, SSDI
beneficiaries who are blind are allowed a greater monthly
earnings limit--up to $1170--before they lose their cash
benefits. While the loss of cash benefits to beneficiaries if
they earn too much money is one of the major disincentives for
SSDI beneficiaries to return to work, ANCOR has long advocated
to end the disparity in the SGA for SSDI beneficiaries who are
blind and those who are not blind.
When the Committee considers reforms to the earnings limit
for SSDI beneficiaries, ANCOR believes such reforms should
ensure that no individuals with disabilities--whether they are
blind or non-blind--should be adversely affected by these
reforms. ANCOR also believes that reforms to the Social
Security earnings limit should ensure equity in earnings among
all people with disabilities.
Bay City, MI 48708
March 29, 2000
Testimony on work incentives for Blind and Disabled Social Security
Beneficiaries
Richard L. Davis (Father of a son that is disabled)
Congressman Shaw and other distinguished members of the Committee
on Ways and Means. I am the father of a son 33 years of age that is
disabled and is eligible to receive Social Security Benefits under
title II of the Social Security Act.
I have elected to continue working and not collect benefits for the
past year and one half so that my son would not suffer from the
indignity of losing all benefits because he wants to work. This could
soon change due to the bill that you have just passed that will enable
me to receive the benefits of social security now. I think this is good
legislation and I thank you for it. I hope that what you do on SGA
legislation will enable David to continue working. As an advocate for
people with a disability, I recognized many years ago that a person
with mental retardation or other related disabilities could be a
productive individual within their own community. I believe and it has
been proven that these people can work side by side with their non-
disabled counterparts. The unfortunate part of this is that these
people usually only get jobs at minimum wage and without benefits.
My son David works on a packaging line with Wendy VanOoteghem whom
you heard testimony from on March 23, 2000. David earns $5.43 per hour.
If David would work 40 hours per week, he would earn $217. This would
put him at $241 over the $700 SGA level. Because of this, David can
work no more than twenty-nine hours per week. This penalizes both him
and his employer. With the expected increase in minimum wage, which
will be passed on through other wage levels, David will only be able to
work twenty-seven hours a week. Two years from now with the second step
of the minimum wage increase,David will only be able to work twenty-
five hours per week. This is certainly a disincentive for David and for
his employer to keep him. If this continues, why should David continue
to work? He can receive his Social Security benefits and Medicare,
after all he is totally and permanently disabled. Why should it matter
that his parents have encouraged the work ethic within him to help him
be a better person and citizen?
I have found that the work incentives that congress has passed this
past year, when they are activated, will benefit people with
disabilities to get and maintain jobs within their community. The
raise, in minimum wage, will help people to make more to support
themselves. This is good for people with a disability, but all of the
good we may have done may cause a hardship to others. If a person works
a 40-hour week at minimum wage of $5.15 per hour, they will earn $893
per month, which is $193 above the current SGA wage level of $700 per
month. This will cause the loss of all of the benefits that they need
to survive such as SSI, SSDI, RSDI, Medicaid and Medicare.
In 1999, the SGA level was increased from the $500 per month level
set in 1990 to $700 per month. This will not keep all people with a
disability working a full 40-hour workweek from loosing their benefits.
I ask you to increase the SGA level for all people that are Blind or
Disabled and make them equal. Additionally, SGA should be indexed or
have a cost of living attached to it so that the inequities never occur
again.
I ask that you do your job so that my son David can continue to do
his.
Respectfully,
Richard L. Davis
March 23, 2000
The Honorable Clay Shaw
Subcommittee on Social Security
Committee on Ways and Means
Dear Chairman Shaw:
I would first like to commend you and the Social Security
Subcommittee for holding a hearing to examine the work incentives in
the Social Security Disability program for the blind and those with
other disabilities. I share your commitment to ensure that disabled
workers have the opportunity and incentive to remain in the workforce.
As you are aware, the Social Security Administration increased the
monthly substantial gainful activity (SGA) level from $500 to $700 for
non-blind disabled adults. I believe that this was an important first
step in correcting a deterrent in the system which in effect pushes
disabled adults out of the workforce.
I feel that a further increase is necessary and should be addressed
this year. Time and time again, disabled citizens have proven their
invaluable contributions to the U.S. workforce. These individuals, like
our seniors and the blind disabled, should be encouraged to work when
able to do so.
I am particularly pleased that The Ticket To Work and Self-
Sufficiency Act of 1999, H.R. 1180, requiring the Social Security
Administration to conduct a demonstration project providing for Social
Security Disability Insurance (SSDI) reductions based on earnings.
Currently, disabled workers who earn over the SGA levels face an
``income cliff'' -in effect they lose their benefits. The demonstration
project would examine the effects of gradually reducing SSDI benefits
$1 for every $2 in earnings over a level determined by the
Commissioner. This is a serious problem for disabled workers and I look
forward to the Commissioner's findings.
Thank you again for holding a hearing on this important issue. I
look forward to working with you in the future on this issue.
Sincerely,
Phil English
Member of Congress
Statement of Michael Freedman, Member, Board of Directors, National
Alliance for the Mentally Ill, Arlington, Virginia
Chairman Shaw and Representative Matsui, on behalf of the
more than 210,000 members of NAMI (The National Alliance for
the Mentally Ill) and the 50 state organizations and over 1,240
local affiliates across the nation and in Puerto Rico, American
Samoa, and Canada, I would like thank you for this opportunity
to submit testimony on work incentives for disabled
beneficiaries of the disabled and income security programs of
the Social Security Administration.
NAMI is the nation's leading grassroots organization
dedicated solely to improving the lives of persons with severe
mental illnesses such as schizophrenia, bipolar disorder
(manic-depressive illness), major depression, obsessive-
compulsive disorder, and anxiety disorders. NAMI's efforts
focus on support to persons with these serious brain disorders
and to their families; advocacy for ending discrimination in
federal income support and health insurance programs and
education to eliminate the pervasive stigma surrounding severe
mental illness. NAMI also endorses efforts to promote
employment opportunities and greater independence through
increased access to rehabilitation and job training programs
and extended health care coverage to workers who need treatment
in order enter and stay in the workforce.
I am Mike Freedman, member of the Board of Directors of
NAMI, and a former president of the NAMI Consumer Council, the
nation's largest organization of consumers of mental health
services. I was diagnosed with Clinical Major Depression,
extreme Panic/Anxiety Disorder, and Post Traumatic Stress
Disorder as a result of a genetic disposition that came to the
surface in 1976 after experiencing both war and the suicide of
my father, a decorated Air Force Pilot, and later a Federal
Narcotics Officer. In addition, my spouse, a former mental
health crisis counselor, became afflicted with Bi-Polar
Disorder and was very suicidal until she was properly diagnosed
and medicated. During this long period of stabilization,
rehabilitation, and recovery, we did the best we could raising
a child in deprivation and poverty caused by the existing rules
governing state and federal policies that deal with assistance
to the psychiatrically disabled on SSI and SSDI. I know first
hand the struggles that consumers face in getting and keeping a
job, and attempting to leave the Social Security disability
programs for a productive and independent life. As a State
Program Director with the New York Association of Psychosocial
Programs, I encounter consumers every day who struggle with the
confusing, unfair and complicated rules governing the SSDI
program.
At the outset, I would like to express our deep
appreciation to every member of the Subcommittee for the
important role and leadership displayed in the passage of the
Ticket to Work and Work Incentives Improvement Act late last
year. This law takes important steps toward self-determination
in the rehabilitative process for people with disabilities,
including people with severe mental illnesses, and removes
barriers for disability beneficiaries who wish to enter the
workforce and lead independent lives. NAMI is extremely
grateful for the bipartisan leadership that you and your
colleagues exhibited in passing this long overdue reform.
Substantial Gainful Activity's (SGA's) Impact on Work
Individuals with disabilities, including people with severe
mental illnesses, want to work, but are often discouraged by
many barriers existing in the current public system. A recent
Harris survey showed that 72% of unemployed people with
disabilities, including people with severe mental illnesses,
have a strong desire to have a job. Several recent surveys have
found this rate to be even higher for adults with severe mental
illnesses, as high as 80%. Yet 69% of those surveyed by Harris
say that their need for benefits is a major impediment to
seeking employment. Employment is an essential part of recovery
for people with severe mental illnesses and recent advances in
treatment services and medications have increased the capacity
of people with severe mental illnesses to join the mainstream
and live independently. NAMI has heard the frustration from
countless members who would like to begin the road to recovery
by gaining employment but cannot risk losing their benefits by
exceeding the SGA.
Employment assistance is critical for people with severe
mental illnesses to regain independence, dignity and purpose.
People with severe mental illnesses are the fastest growing
population within both the SSI and SSDI programs. More
importantly, SSA data reveal that people with mental illnesses
are joining the disability rolls at an earlier age. Given how
difficult it is to get off the rolls through employment--less
than 1% successfully do so--it becomes imperative to enact
reforms that end the severe penalties for those who are willing
to take the tremendous risks inherent in entering the
workforce. Increasing the SGA level will certainly have a
positive impact on individuals who would like to work but
cannot afford to lose their eligibility for disability
benefits.
The Current SGA Level is Outdated
Although NAMI strongly supported the increase of SGA to
$700 a month in 1999 and acknowledged the intent of SSA to
create an environment where more beneficiaries with
disabilities can ``enter the workforce and lead more productive
self-sufficient lives,'' this figure does not reflect an
adjustment based on the national average wage index since the
inception of SGA in 1979. SGA was designed as an indicator to
signal whether a beneficiary is capable of earning significant
wages and provides an incentive to enter the workforce.
However, the current earnings limit of $700 a month reflects an
income of only $8,400 per year, which barely raises an
individual who wants to become independent of public support to
the federal poverty level. Once making it to this meager
plateau, a demarcation point that usually signals a crisis in
an unimpaired workers life, a person with a disability that
makes one dollar more can lose their eligibility for cash
benefits. This is referred to as the ``cash cliff'' and
represents an all-or-nothing design that encourages people with
disabilities to remain in poverty and dependent on the system.
NAMI believes that a more equitable approach would be to
increase SGA and index it to wage growth since the
establishment of SGA.
Indexing SGA to Wage Growth
Since the establishment of SGA over twenty years ago, it
has been increased only twice, in 1990 and just recently last
July in 1999. Obviously, those modest increases have not kept
up with inflation over that period. This is especially the case
with respect to cost increases in treatment, medications and
support services. As wages have increased over that same
period, people with severe mental illnesses and other
disabilities receiving SSA benefits have been forced to reduce
the amount of hours they work in order to keep from exceeding
SGA. Thus, SGA has become a very unreliable indicator of a
beneficiary's ability to work. As you know, Social Security has
stated that the past increase in SGA has resulted in
substantial cost increases to both the SSI and SSDI programs.
Likewise, any proposed increase is projected to increase the
overall cost of Social Security's disability programs.
However, indexing SGA to wage growth, as is currently done
for the SGA amount for the blind, would result in costs going
gradually over time. Such a move would allow SGA to be a more
reliable indicator of an individual's ability to earn wages and
work. It would also more effectively incentivize work for all
people with disabilities, including people with severe mental
illnesses. This would mean that the federal government would
not be hit by substantial periodic cost increases that are
needed to correct an antiquated and unreliable SGA. Finally,
such a move would also avoid placing an unfair burden on
beneficiaries who are eager to attempt to work.
Equivalence to the SGA Level for Blind Beneficiaries
NAMI believes that SSI and SSDI beneficiaries with severe
mental illnesses and other disabilities should have an SGA
level equivalent to the level established for the blind, around
$1,170 per month, which is about 67% greater than the SGA level
for non-blind beneficiaries. Such an adjusted level should also
be adjusted annually for the cost of living, as is done for
blind beneficiaries. This figure currently allows a blind
disabled beneficiary to earn minimum wage (or a little more)
and work a 40 hour week, without a substantial loss of cash
benefits.
Currently, people with disabilities (excluding blind
beneficiaries), can work barely more than 30 hours a week at
minimum wage before exceeding SGA and thus risk losing all, or
part of their cash benefits. It is likely that increasing SGA
for non-blind beneficiaries to that for the blind disabled
would create an additional fiscal burden for Social Security's
programs. However, this change would create greater equity and
fairness in both the SSI and SSDI programs and would more
effectively incentivize work for many beneficiaries.
The difference in SGA levels for people disabled by
blindness, and for people disabled by severe mental illnesses
or other disabilities, has been supported by a rationale that
has not been proven by research. In fact, evidence shows that
the very characteristics thought to distinguish blind from non-
blind disabled beneficiaries accurately describe the fate of
non-blind beneficiaries disabled by severe mental illnesses. As
was reported to the Subcommittee in the GAO testimony given by
Barbara D. Bovbjerg, associate director, Education, Workforce,
and Income Security Issues, Health, Education, and Human
Services Division, disadvantages thought to separate people
disabled by blindness were greater employment discrimination
and low rates of employment.
The GAO noted that likely job prospects were low-wage jobs,
and higher costs for supportive services. However, research
done by the National Institute of Disability and Rehabilitation
Research shows that while people disabled by blindness are
participating in the workforce at a rate of only 28.9%, they
exceed the overall participation of rate of individuals
disabled by severe mental illnesses (27.2%). In fact, NIDRR
found that within the broad category of severe mental illness,
the participation rate of persons with depressive disorders was
only 25.4% and that the rate for individuals with schizophrenia
was 11.9%, the lowest among any measured category.
The GAO testimony further compares evidence of cost
differentials of supportive services associated with disabled
blind beneficiaries and beneficiaries disabled by severe mental
illnesses. A study conducted by the American Foundation for the
Blind and Mississippi State University found that over 50% of
legally blind individuals spent less than $500 for devices used
to support work. In comparison, literature reviewed by GAO
showed that on average, people with severe mental illness incur
costs of $1,400 to $3,600 annually for supportive employment
services and annual costs for mental health services range from
$3,200 to $7,000.
If the presuppositions that led to the original segregation
of beneficiaries with severe mental illnesses and other
disabilities are not supported by research evidence, how can
the disparities remain. If the evidence actually points to
people disabled by severe mental illnesses having a greater
disadvantage, how can the disparities remain?
NAMI does not seek to single out any group in determining
fair and legitimate SGA levels or their complete removal for
all groups of people with disabilities. On the contrary, NAMI
wishes to advance fair and equitable treatment for all
disability groups. NAMI endorses the goals cited by the
Consortium of Citizens with Disabilities that congressional
action regarding SGA should:
1) Do No Harm--Changes made by Congress to the earnings
limit, or to the Social Security Disability programs as a
whole, should ensure that no disability group os negatively
affected. Whatever Congress does, it must not enact policy
detrimental to any particular category of DI beneficiaries.
2) Establish Equity--Congress should take favorable action
on legislation that addresses earnings limits and must ensure
equity among all DI beneficiaries.
NAMI would like to thank the Subcommittee for taking this
important look at long overdue steps toward greater fairness in
the SSI and SSDI programs. NAMI is hopeful that congressional
action will allow more beneficiaries with severe mental
illnesses to reach their potential through employment. Thank
you for the opportunity to comment on this important work
disincentive in Social Security's disability programs.
Thank you, and with deep respect,
Michael Freedman
Statement of Hon. Jim Nussle, a Representative in Congress from the
State of Iowa
I appreciate this opportunity to express my views to the
Subcommittee on the issue of the Social Security Disability
Insurance (SSDI) program's substantial gainful activity (SGA)
level. I would like to acknowledge the Subcommittee's great
work on securing the enactment of the Ticket to Work and Work
Incentives Act of 1999 (H.R. 1180) last fall. This legislation
promotes independence and will lead to greater employment for
individuals with disabilities. If people with disabilities want
to enter the working world or return to their career or
workplace, we should do everything we can to make that happen.
We currently have a system that not only discourages people
from going to work but also encourages them to continue
collecting public benefits. The enactment of the H.R. 1180 was
the first step in providing disabled Americans with the means
to add to the productivity of our nation's workforce.
We must now continue the efforts we made last fall by
exploring ways to allow blind and non-blind disabled
individuals to increase their earning potential while securing
their SSDI benefits. As you are aware, during the Committee's
consideration of the Senior Citizens' Freedom to Work Act (H.R.
5) on February 29, I was prepared to offer an amendment to re-
establish the link between the SGA level for SSDI beneficiaries
and the earnings limit for individuals receiving Social
Security Retirement benefits. I believe the SSDI proves to be a
disincentive to work. While Americans take pride in their
strong work ethic, not all Americans are given to opportunity
to work towards their full potential.
Throughout my career in Congress, I have heard from many
Iowans who believe they are treated unfairly by the SGA levels.
Iowans are dependable and honest Americans who work hard to
support themselves and their families. However, many disabled
Iowans are being held back because of the SGA limit. I would
like to share with you a few stories of Iowans who are effected
by the SGA limit.
Doug Elliott of Grinnell, Iowa, was serving his country in
the Vietnam War when he lost his sight. After the war, Doug was
able to not only to get his GED, but also graduate college and
receive his masters degree. He is now a social worker in the
state of Iowa. However, Doug had to make the tough decision
that many other blind individuals in the country face to choose
between being active in the workforce and losing his SSDI
benefits, or remaining unemployed and retaining his full
benefits. Doug had a wife and two children and wanted to work
to support them. Doug is unlike other blind Iowans in the fact
that he had a little security behind him. Because Doug is a
veteran and was injured while in the service, he is able to
retain his service-connected compensation. This is the only way
Doug could remain economically stable.
Priscilla McKinney of St. Ansgar, Iowa, is currently a
graduate student at the University of Iowa pursuing a maters
degree in education. Priscilla is blind and also has a young
son to look after. While Priscilla is currently receiving SSDI,
she will have to soon make the unfortunate choice of pursuing a
teaching job or remaining on SSDI. If Priscilla finds that the
economic benefits of staying on SSDI and not entering the
workforce far out weigh the benefits of leaving the SSDI rolls
to pursue teaching, Iowa stands to lose a much needed qualified
teacher.
Cathy Reinehart and Bruce Bivens, both of Clarksville,
Iowa, have bipolar disorder. Cathy is a college graduate and a
certified nurses aid. She currently works intermittently out of
fear of exceeding the $700 SGA monthly threshold. Bruce is also
a college graduate and is working in a meat locker in
Clarkville. Bruce faces the similar obstacle of having to
carefully regulate his working hours in order to remain below
the SGA limit.
The federal government is contradicting the American work
ethic by not allowing these individuals to expand their
employment opportunities. Disabled Americans should not have to
choose between government assistance or the opportunity to seek
meaningful employment. For many disabled Americans, such as
those with mental retardation, the only employment they
currently are eligible for is low-paying jobs that do not offer
health benefits or job security. If these individuals do have
the opportunity of earning just slightly above the current
minimum wage, they will lose their SSDI benefits, even though
they have no health benefits or job security through their
employment.
As the Subcommittee continues to explore this matter
legislatively, I would like to express my support for a
resolution in the most fair manner to all disabled Americans. I
am currently aware of many proposals that address ways do so.
Members of the blind and non-blind disabled communities would
ultimately hope for complete re-linkage of the SGA level to the
Social Security earnings limit. However, if we cannot achieve
complete re-linkage, we'll have to look at alternatives to give
some relief to blind and non-blind disabled people. I would
like to offer my assistance to the Subcommittee in any way
possible to seek the best legislative avenue.
Statement of Paralyzed Veterans of America
The Paralyzed Veterans of America commends the subcommittee
for its interest in ongoing work disincentives in the Social
Security Disability Insurance Program [SSDI]. We appreciate
having the opportunity to share with you our thoughts on the
substantial gainful activity [SGA] level as it affects the
ability of SSDI beneficiaries to go to work.
Over half of PVA's members have spinal cord injuries that
are not connected to their military service. As a result, they
are not eligible for many of the benefits offered to service-
connected disabled veterans through the Department of Veterans
Affairs. Instead, they have turned to the SSDI program that has
provided invaluable support and assistance to them and their
families. In fact, a survey of our members found that over 60
percent were on SSDI and another 22 percent received
supplemental security income or SSI.
Over the years, many of our members on SSDI have expressed
frustration with the SGA because of its adverse impact on their
ability to return to work. Consider PVA member Michael W. from
Maryland. Michael is a fairly young man, in his mid-40s, who
was injured in the early 1980s. He has been on SSDI since 1982.
Several times he considered going back to work. However, he
always rejected that course of action because even modest
earnings above SGA would have meant both the loss of his cash
benefits before he was able to support himself and his health
care coverage through Medicare. He once determined that, if he
went back to work, and lost his SSDI benefits, he would be
working, after taxes, for $4000 a year. Not too long ago, he
was approached for a part time job but had to ask his
prospective employer if he could limit his work hours so that
his pay would not exceed $700 a month [the current SGA level].
Last year, with significant assistance from the members of
this committee, Congress passed the Ticket to Work and Work
Incentives Improvement Act, Public Law 106-170. PL 106-170 was
a major step forward in eliminating many of the barriers to
employment that kept recipients of federal disability benefits
out of the workforce. An important provision of that law was
the extension for another four and a half years of premium free
Part A Medicare. Beginning this October, someone like Michael
W. could return to work with the assurance of that additional
Medicare coverage.
However, SSDI recipients will still confront the ``earnings
cliff'' should they attempt to enter the workforce. As you
know, an SSDI recipient who is blind faces loss of cash
benefits when his or her monthly income surpasses approximately
$1170. As noted earlier, people like Michael W. and other SSDI
beneficiaries with non-visual impairments lose their cash
benefits once their earnings reach $700 a month.
Last year, Social Security raised the SGA for SSDI
beneficiaries with non-visual impairments from $500 to $700 a
month. PVA supported this action, particularly since the last
such increase occurred on January 1, 1990. Even at $700, this
SGA level is still lower than what the SGA level would have
been had it been indexed to inflation.
Indeed, at $700, the SGA level is still below minimum wage.
Someone working at the current minimum wage full time over a
year would earn slightly over $10,000. An individual on SSDI
whose average monthly earnings reached $700 for a full-time job
over a full year would earn $8,400, at which time his or her
cash benefits terminate. True, the rapid loss of Medicare
coverage, which once served as an impediment to going to work,
is no longer as much of a threat. However, the prospect of
immediate elimination of cash benefits when yearly earnings
reach $8400 can be intimidating to someone who may not have
been in the workforce for many years or who may never have
worked. What incentive is there for someone to take a low-
paying entry-level job when it would jeopardize approximately
half of his or her income [assuming he or she receives the
average SSDI benefit of roughly $700 per month]?
PVA has long believed that the approach used for SSI
recipients, in which benefits are gradually reduced as earned
income rises, should be applied to SSDI. We know that Public
Law 106-170 directed SSA to examine ways to phase out SSDI
benefits as earned income increases to alleviate the ``income
cliff'' now faced by SSDI beneficiaries who go to work.
However, today's fiscal climate is such that immediate action
by Congress may be more advisable than waiting for a study to
be completed. Congress has signaled its willingness to
reconsider earnings limits with the passage of HR 5, lifting
the earnings cap for retired Social Security beneficiaries.
With the robust economy and positive budget numbers we are now
enjoying, this may be a once in many decades opportunity to
address the problems in the current SGA for people with
disabilities.
PVA has always objected to the bifurcation of the
substantial gainful activity level for persons with visual
impairments and all other people with disabilities on SSDI and
SSI. Individuals on SSDI who are blind can, at least, earn
minimum wage with an SGA level set at $1,170 per month and that
is adjusted for inflation. The General Accounting Office has
found that the costs and rates of unemployment do not appear to
be necessarily higher for the blind than those who have other
disabilities. Indeed, a study sponsored by PVA found that
someone with spinal cord injury faces initial hospital and
medical costs of over $95,000. He or she will spend
approximately $8000 on home modifications and will incur yearly
average medical costs of over $14,000. Average lifetime costs
associated with spinal cord injury range from $500,000 to
$1,000,000 and include high medical expenses, costs of personal
assistance services and the costs of special transportation.
[M. Berkowitz, Ph.D., The Economic Consequences of Traumatic
Spinal Cord Injury (1992).] PVA urges Congress to rectify the
imbalance in treatment of those with spinal cord and other non-
visual disabilities under SSDI earnings limits.
Another inequitable factor in SGA is the manner in which
Social Security treats impairment related work expenses [IRWEs]
that can be used to keep an SSDI recipient below the
substantial gainful activity level. Blind SSDI recipients can
claim far more costs as IRWEs than non-blind recipients can.
For non-blind beneficiaries, IRWEs must be directly related to
work, thus eliminating expenses associated with getting ready
for and travelling to and from work.
Many people on SSDI would embrace the opportunities offered
by our new economy if they did not feel they would be punished
by Social Security policies for doing so. By addressing the
disparities in the SGA level, this committee can complete the
work begun by the Ticket to Work and Work Incentives
Improvement Act.
In sum, PVA supports:
An SGA level that is made consistent by raising
the level for non-visually impaired recipients to, at least,
the level for blind SSDI beneficiaries.
Indexing all SGA levels to average wage growth to
prevent its value as a work incentive from eroding over time.
Changes in the impairment related work expenses
policy for non-blind SSDI recipients to allow for costs
associated with preparing for and getting to and from the
workplace.
Ongoing efforts to implement a sliding scale
reduction in SSDI cash benefits when beneficiaries go to work.
PVA appreciates your attention to our comments. We look
forward to working with your subcommittee in the future on
improvements in Social Security policy to help people with
disabilities return to work.
Statement of Protection & Advocacy, Inc., Los Angeles, California
Contacts:
Marilyn Holle [[email protected]], (213) 427-8747
Guy Leemhuis [[email protected]], (213) 427-8747
Diana Honig [[email protected]], (916) 488-9950
Protection & Advocacy, Inc. 3580 Wilshire Blvd., Suite 902,
Los Angeles CA 90010-2512 Protection & Advocacy, Inc., of
California appreciates the opportunity to comment on how Social
Security applies its substantial gainful activity (SGA) rules
to persons who work in supported work programs and particularly
to persons who qualify for disability benefits based on the
work history of a parent and who receive ``disabled adult
child'' or DAC benefits under the parent's Social Security
number. One of your witnesses at the March 23 hearing--Wendy
VanOoteghem--is someone who works in a sheltered or supported
work program and who receives DAC benefits. Statistics gathered
by the Rehabilitation Research and Training Center of the
Virginia Commonwealth University indicate that nationally, two-
thirds to three-quarters of the supported employment
participants have mental retardation diagnoses. Of the balance,
the majority have diagnoses of severe psychiatric disabilities.
Protection & Advocacy, Inc., is a nonprofit agency that
works with Californians with disabilities to protect and
advocate for their human, legal and service rights.
This statement is prompted by Protection & Advocacy's work
with persons with the most severe disabilities who receive DAC
benefits based on their parent's work history and who are
working through a supported work program. It is also prompted
by our representation of Fred Innerebner \1\ who lost forever
his DAC benefits \2\ because of his earnings through supported
work program.
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\1\ See Innerebner v. Apfel, 2000 WL 274185, Case No. C-99-00794-
WHA (N.D. Cal. 3/3/00) involving a DAC beneficiary whose mental
retardation met Social Security's listing of impairments and who lost
his DAC benefits because his gross earnings through a supported work
program eventually averaged more than $500 a month, the then applicable
SGA level.
\2\ Section 202(d)(6)(B) of the Social Security Act, 42 U.S.C.
Sec. 402(d)(6)(B), provides that a DAC beneficiary whose benefits
stopped before because he ceased to be under a disability, may be
reinstated to benefits if he ``is under a disability . . . which began
before the close of the 84th month following the month in which his
most recent entitlement to child's insurance benefits terminated
because he ceased to be under such disability.'' See also 20 C.F.R.
Sec. 494.351(c). The legislative history indicates that this provision
[added by Sec. 108(d) of Pub.L. 92-603 in 1972] was intended to enable
persons whose benefits ceased because of work to be reinstated. Social
Security, however, has treated this provision as a nullity saying that
performing SGA makes you ineligible for re-entitlement. Social Security
has not identified anyone who could qualify for re-entitlement under
this provision.
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How Social Security applies its SGA rules to this
particularly vulnerable group--persons on DAC benefits and in
supported work programs--frustrates a national policy of
encouraging individuals with significant disabilities to
participate in competitive employment. Social Security
interprets its regulations in a way that penalizes persons in
supported employment because their supports come from an
outside publicly or charitably funded agency rather than from
the employer itself. A private employer is asked to determine
the amount of any subsidies including special conditions
provided to an employee when determining the value to the
employer of the employee's work. 20 C.F.R.
Sec. 404.1574(a)(2).\3\ Those calculations would necessarily
include the cost of extra supervision, extra training, services
to address behavior problems, etc. Initially Social Security
took the position that it would not consider at all any subsidy
including special conditions provided by a supported work
program. Social Security has changed its position in that it
will recognize to a limited degree subsidy provided by a
supported work program \4\ but not to the extent SSA will
recognize subsidy provided directly by an employer -and not to
the extent SSA will recognize subsidy provided by a third party
to someone who is self-employed.\5\
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\3\ ``An employer may set a specific amount as a subsidy after
figuring the reasonable value of the employee's services.''
\4\ Per the August 17, 1999, Program Memorandum from Ken McGill,
Social Security will consider only a limited number of service hours
provided by a supported employment program--hours when the supported
work program is actually doing the employee's job -and values those
services at the employee's rate of pay. Not covered are all the other
tasks performed by the supported employment program which are necessary
to maintain employment. Those services include providing extra
supervision, training the supervisors on how to work with the employee
in light of his disability, working with the employer to restructure
the job to accommodate to the employee's disability limitations,
incorporating sequencing cues to the work site, developing positive and
appropriate interactions with coworkers, working with employer and
employee to address problem behaviors, etc.
\5\ See the section on unincurred business expenses in Social
Security Ruling (SSR) 83-34 about SGA determinations for self-employed
persons. In that Section Social Security says it will deduct from
earnings ``any business expenses which were incurred and paid for by
another agency'' including expenses paid for by the State
Rehabilitation Agency: ``This policy is consistent with the principle
that only income attributable to an individual's own productive work
activity should be considered in determining SGA.'' See, also, 20
C.F.R. Sec. 404.1575(c).
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About Supported Employment
Supported employment programs administered by state
rehabilitation agencies were established by Congress ``to serve
individuals with severe disabilities for whom competitive
employment has not traditionally occurred or has been
interrupted or intermittent.'' \6\ They target ``those with the
most severe disabilities who may have been thought to be too
disabled to benefit from rehabilitation services to achieve
successful employment outcomes.'' \7\ They target those who
have been traditionally served in segregated sheltered
workshops and ``day activity programs because they appear to
lack the potential for unassisted employment.'' \8\
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\6\ House Report (Education and Labor Committee) No. 102-822
(August 10, 1992) to accompany H.R. 5492 that became Pub.L. 102-569,
1992 WL 202382, page 175.
\7\ Id. at page 123.
\8\ House Rep. No. 99-571 (Education and Labor Committee), May 5,
1986, accompanying H.R. 4021 that became Pub.L. 99-506, at page 31,
reporting on testimony of Madeleine Will, Assistant Secretary for
Special Education and Rehabilitative Services, U.S. Dept. of Education,
1986 U.S. Code Cong. & Adm. News 3471, 3501.
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A person with a disability cannot qualify for supported
employment unless he is someone who cannot keep a job in the
competitive labor market without intensive and ongoing support
services.\9\ Because federally funded state rehabilitation
programs serve persons in supported employment for only a
limited initial period of not more than 18 months, eligibility
also requires the availability of a state program to provide
the ongoing support needed to maintain someone in a competitive
sector job.\10\
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\9\ See, e.g., 29 U.S.C. Sec. 795j(2).
\10\ 29 U.S.C. Sec. Sec. 705(36)(C), 705(13), 722(b)(3)(F)(ii),
795i.
The Role of SGA Determinations in the title II Disability
---------------------------------------------------------------------------
Programs for Persons in Supported Employment
SSA's regulations defining what is and is not ``substantial
gainful activity'' are all regulations adopted to define who
does or does not meet the statutory definition of disability
under the Social Security disability programs.\11\ Thus the
determination that a title II disability beneficiary performed
substantial gainful activity based on earnings from one
particular job is also a generalized determination of the
person's ability to perform substantial gainful activity
outside that one particular job.
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\11\ The term `disability' means--(A) inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period
of not less than 12 months;'' Section 223(d)(1)(A) of the Social
Security Act, 42 U.S.C. Sec. 423(d)(1)(A). ``The Secretary shall be
regulations prescribe the criteria for determining when services
performed or earnings derived from services demonstrate an individual's
ability to engage in substantial gainful activity.'' Section 223(d)(4)
of the Social Security Act, 42 U.S.C. Sec. 423(d)(4), emphasis added.
---------------------------------------------------------------------------
For a person in supported employment, a finding that work
constitutes substantial gainful activity based on earnings is a
finding that the supported employment participant has
demonstrated the general ability to perform work at the
substantial gainful activity level. This is so even if there is
no dispute that the person could not work at all outside the
supported employment program \12\ and even if there is no
dispute that the cost of the supported employment program
exceeded the gross earnings so that, if the employer were
providing the supports, the person would be found not to be
performing SGA. \13\
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\12\ In Fred Innerebner's case, for example, the Administrative Law
Judge ruling against him also concluded that ``the claimant would have
been unable to perform the job without the support services he received
from the various social service agencies.''
\13\ In Fred Innerebner's case, for example, there was no month in
which his earnings came close to SGA if the cost of his supported
employment services were deducted and many months where he was in minus
territory or close to zero if the cost of supported employment services
were deducted.
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Conclusion & Request for Oversight
Supported employment provides a significant opportunity for
those closed out of competitive employment because of their
disabilities. Supported employment has increasingly come to
replace the more traditional sheltered workshop because it
provides a more realistic opportunity for some to transition
into self-support with little or no ongoing supports. Social
Security's interpretation of its own regulations, however,
frustrates the goals of supported employment programs. Because
Social Security does not consider the actual subsidy
represented by supported employment services, participants in
supported employment cannot risk earning above the SGA level.
They cannot risk getting to the point of where they have a
chance of becoming self-supporting with little or no supports.
If they do, they will suffer Fred Innerebner's fate:
termination forever from DAC benefits even though they in fact
have not demonstrated a general ability to perform SGA.
Protection & Advocacy respectfully requests that the
Subcommittee on Social Security review how Social Security
determines when the earnings of supported employment
participants constitute SGA. That would include looking at how
Social Security evaluates the support services provided by
supported employment programs in that process and how the
purposes of the Social Security Act and the Rehabilitation Act
may be harmonized for Social Security title II disability
beneficiaries participating in supported employment.
Protection & Advocacy respectfully requests that the
Subcommittee on Social Security review how Social Security
applies Section 202(d)(6)(B) and whether Social Security is
correct in treating that provision as a nullity without force
or effect.
-