[Federal Register Volume 66, Number 17 (Thursday, January 25, 2001)]
[Notices]
[Pages 7826-7829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2226]


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SOCIAL SECURITY ADMINISTRATION


Supplemental Security Income (SSI) for the Aged, Blind, and 
Disabled; SSI Work Incentives Demonstration Project

AGENCY: Social Security Administration (SSA).

ACTION: Notice.

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SUMMARY: The Commissioner of Social Security announces the following 
demonstration project relating to the Supplemental Security Income 
(SSI) program under title XVI of the Social Security Act (the Act). 
Under this project, the Social Security Administration (SSA) will test 
the effectiveness of altering certain SSI program rules as an incentive 
to encourage SSI recipients with disabilities or blindness to work for 
the first time, return to work, or increase their work activity and 
earnings. This project, called the SSI Work Incentives Demonstration 
Project, is being conducted under the authority of section 1110(b) of 
the Act. We are conducting this project in selected States that are 
working with us under our State Partnership Initiative to assist people 
with disabilities to obtain employment and reduce their dependence on 
SSI benefits and benefits under other government programs. We are 
publishing this notice in accordance with 20 CFR 416.250(e).

FOR FURTHER INFORMATION CONTACT: Elissa Ness, Social Security 
Administration, Office of Employment Support Programs, 6401 Security 
Boulevard, 107 Altmeyer Building, Baltimore, Maryland, 21235-6401; 
Phone (410) 965-7955; or through E-mail to [email protected].

SUPPLEMENTARY INFORMATION:

Background

What is the SSI program?

    The SSI program established under title XVI of the Act provides 
monthly benefits for aged, blind and disabled individuals with limited 
income and resources. For SSI applicants and recipients, income is a 
factor in determining eligibility for, and the amount of, SSI benefits. 
In determining an individual's countable income for SSI program 
purposes, title XVI of the Act specifies certain items that are 
included as well as certain items and/or amounts that are excluded. 
Earnings from employment, minus certain exclusions, are counted as 
income to the individual. The amount of an individual's resources is 
used to determine whether he or she is eligible for SSI benefits for 
any given month. If an individual's countable resources are within the 
statutory limit for eligibility, they have no effect on the amount of 
the SSI payment to the recipient.

What is the SSI Work Incentives Demonstration Project?

    This is a demonstration project which we are conducting under the 
authority of section 1110(b) of the Act to test whether altering 
certain requirements, conditions, or limitations under title XVI of the 
Act and the implementing regulations, relating to the counting of an 
SSI recipient's income and resources and to the initiation of certain 
continuing disability reviews for SSI recipients with disabilities or 
blindness, will encourage recipients of SSI benefits based on 
disability or blindness to attempt to work for the first time, return 
to work, or increase their work activity and earnings. Under the 
project, we will test, on a demonstration basis, the effectiveness of 
certain alternative SSI program rules as incentives for SSI recipients 
with disabilities or blindness who want to work to attempt work 
activity or increase their level of work activity. We are conducting 
the SSI Work Incentives Demonstration Project in connection with 
certain return-to-work projects for which we awarded cooperative 
agreement funds to certain States under SSA's State Partnership 
Initiative.

What is SSA's State Partnership Initiative?

    The State Partnership Initiative (SPI), established by SSA, is the 
first activity launched under Executive Order 13078, Increasing 
Employment of Adults with Disabilities, signed on March 13, 1998 by 
President Clinton. This initiative is designed to help States develop 
innovative and integrated, state-wide programs of services and supports 
for their residents with disabilities.
    In 1998, under the SPI program, SSA awarded five-year cooperative 
agreements to a number of States to develop innovative projects to 
increase job opportunities and enhance the coordination and delivery of 
rehabilitation, employment and other support services for adults who 
are recipients of SSI benefits based on disability or blindness, or who 
are Social Security Disability Insurance (SSDI) beneficiaries, to 
assist them to return to work or work for the first time

[[Page 7827]]

and reduce their dependence on SSI and SSDI benefits. These cooperative 
agreement projects under the SPI program are expected to continue in 
operation through September 30, 2003.

With Which SPI Projects Is SSA Conducting the SSI Work Incentives 
Demonstration Project?

    We are conducting the SSI Work Incentives Demonstration Project, 
which consists of two models, in conjunction with the SPI projects in 
the States of California, New York, Vermont and Wisconsin. The SPI 
projects in these States are as follows:
    (1) California's Individual Self-Sufficiency Planning Project is 
providing enhanced services to 150 project participants with severe 
psychiatric disabilities who receive SSI and/or SSDI benefits at two 
demonstration sites, One-Stop Career Centers in San Mateo and Kern 
Counties. Selected individuals from other counties who are clients of 
the Department of Rehabilitation will serve as the control group for 
the research design.
    (2) The New York Works: Self Sufficiency Through Employment 
Incentives project is testing the impact of full program services or 
enhanced services to recipients on return to work outcomes. Full 
services include a client-centered ``team'' approach, a vocational case 
manager/employment coordinator, intensive benefits counseling and 
management, in addition to any federal program rules waivers, access to 
SSA work incentives, expedited access to a Plan for Achieving Self-
Support (PASS), and presumed vocational rehabilitation (VR) 
eligibility.
    SSI recipients with serious mental illness, residing in New York 
City or Erie County, will be randomly assigned to a full service model, 
an enhanced service model, or a control group. Each treatment group 
will have 450 members, with 650 in the control group.
    (3) Vermont Work Incentives Project is examining the impact of 
benefits counseling, benefits assessment plans, peer benefits 
counseling, training of VR staff on mental health issues, and any 
federal program rules waivers and Medicaid Buy-In in its overall 
project evaluation. The statewide program expects to have 1,200 
participants (SSI/SSDI recipients) with a range of disabilities.
    (4) Wisconsin Pathways to Independence includes benefits counseling 
as a core service with additional options including targeted vocational 
planning, greater use of existing SSA work incentives, and health care 
and income support policy changes derived from federal waivers. The 
Wisconsin Project will also implement the Medicaid Purchase Plan, an 
amendment to Wisconsin's Medicaid Program. It is anticipated that 
approximately 1,200 individuals with severe disabilities (including 
physical disabilities, mental illness, HIV/AIDS, and developmental 
disabilities) will be served in 15 sites throughout the State.

What Are the Objectives of the SSI Work Incentives Demonstration 
Project?

    SSA is committed to supporting the work efforts of disabled or 
blind SSI recipients, as well as SSDI beneficiaries, who want to work 
and become more self-sufficient. SSA seeks to develop new strategies 
and incentives that will assist SSI recipients and SSDI beneficiaries 
to enter and remain in the workforce and reduce their dependence on SSI 
and SSDI benefits.
    Our overall objective in conducting this project is to demonstrate 
whether providing additional work incentives under the SSI program will 
remove potential barriers to work for recipients of SSI benefits based 
on disability or blindness. Under the project, we will test whether 
altering certain SSI program rules provides effective work incentives 
for disabled or blind SSI recipients and concurrent SSI/SSDI 
beneficiaries to attempt to work for the first time, return to work, or 
increase their work activity and earnings.

What Is The Statutory Authority for Altering SSI Program Rules to 
Conduct This Demonstration Project?

    We are conducting the SSI Work Incentives Demonstration Project 
under the authority of section 1110(b) of the Act. Section 1110(b) of 
the Act authorizes the Commissioner of Social Security to waive any of 
the requirements, conditions, or limitations of title XVI of the Act to 
the extent necessary to carry out experimental, pilot, or demonstration 
projects which, in the Commissioner's judgment, are likely to assist in 
promoting the objectives or facilitate the administration of the SSI 
program.

Description of the SSI Work Incentives Demonstration Project

What Are the Alternative SSI Program Rules That Will Apply to 
Participants in the SSI Work Incentives Demonstration Project?

    The alternative SSI program rules that we are testing under the 
demonstration project consist of the following four elements. Elements 
1 through 3 will apply to participants in the project who are SSI-only 
recipients or concurrent SSI/SSDI beneficiaries. Element 4 will only 
apply to participants who are SSI-only recipients; it will not apply to 
concurrent SSI/SSDI beneficiaries.
1. ``Three-for-Four''--Increase Earned Income Exclusion
    SSA will test the effectiveness, as a work incentive, of using 
modified earned income exclusion in determining an SSI recipient's 
countable income for SSI program purposes. Under this work incentive, 
SSA will exclude the first $65 of a project participant's monthly 
earned income plus an additional 75 percent of any remaining gross 
monthly earned income, or an additional $3 for every $4 earned. This 
differs from the current rules under which SSA excludes the first $65 
of monthly earned income plus an additional 50 percent of any remaining 
gross monthly earned income, or an additional $1 for every $2 earned.
2. ``Unearned Income Related to Work Activity''--Treat as Earned Income
    SSA will test, as an additional work incentive, treating certain 
types of temporary unearned income related to work activity in the same 
manner as earned income will be treated under element 1 above for 
purposes of determining an SSI recipient's countable income. That is, 
for a project participant, SSA will exclude the first $65 per month of 
certain types of unearned income that result from work activity plus 75 
percent of the remainder of such unearned income in a month. This 
differs from current SSI rules under which SSA excludes the first $20 
of unearned income in a month. The only types of temporary unearned 
income that result from work activity that would be subject to the 
alternative rule are: Unemployment insurance benefits, worker's 
compensation benefits, State disability benefits, and disability-
related benefits paid through private insurance plans. Other types of 
benefits, such as Social Security benefits or veterans benefits from 
the Department of Veterans Affairs, will continue to be treated as 
unearned income based on current rules.
3. ``Independence Account''--Create New Resource Exclusion
    SSA will study the use of an additional resource exclusion as a 
work incentive. SSA will allow a project participant to maintain an 
``Independence Account'' as a resource, beyond the current $2,000 
resource limit. For purposes of determining an SSI recipient's 
countable resources, SSA will exclude monies conserved (including any 
accrued interest) in one

[[Page 7828]]

separate account for saved wages, not to be commingled with other 
monies, and with deposits limited to 50 percent of gross earnings, not 
to exceed $8,000 per year. The account may be a checking or savings 
account, certificate of deposit, money market or mutual fund account. 
It cannot be any type of retirement plan such as an IRA, Roth IRA, 
401(k) plan, or 403(b) plan. The period during which a participant will 
be permitted to deposit a portion of his or her wages into an 
``Independence Account'' will end September 30, 2003 or, if earlier, 
when he or she ceases to be a project participant. Following the close 
of the period for making deposits, SSA will provide for a 24-month 
spend-down period during which the resource exclusion under the 
demonstration project would continue to apply to monies in the account.
4. ``Medical Continuing Disability Reviews''--Suspend for Certain 
Participants
    SSA will test suspending medical continuing disability reviews 
(CDRs) as a work incentive for certain individuals. SSA will suspend 
medical CDRs for participants in the demonstration project who are SSI-
only recipients with ``medical improvement possible'' (MIP) or 
``medical improvement not expected'' (MINE) diaries. For a project 
participant meeting these criteria, SSA will not initiate a medical CDR 
during the period this work incentive is in effect (i.e., through 
September 30, 2003), so long as the individual remains a project 
participant. The suspension of CDRs would not apply to redeterminations 
of disability that are required for childhood disability recipients who 
attain age 18.

When Will the Demonstration Project Begin and End?

    The alternative SSI program rules under the demonstration project 
will become effective on January 26, 2001. Except for the spend-down 
period for the ``Independence Account,'' the alternative SSI program 
rules will cease to be effective after September 30, 2003. The spend-
down period for the ``Independence Account'' will begin on October 1, 
2003 (or, if earlier, when an individual's participation in the 
demonstration project ends) and will end after a period of 24 months.

What Are the Two Models Which Comprise the SSI Work Incentives 
Demonstration Project?

    Model one of the demonstration project will use the alternative SSI 
program rules described in items 1 through 4 above, and will be carried 
out in conjunction with the SPI projects in California, New York, and 
Wisconsin. Model two of the demonstration project will use the 
alternative SSI program rules described in items 2 through 4 above, and 
will be carried out in conjunction with the SPI project in Vermont.

How Will An Individual Become a Participant in the SSI Work Incentives 
Demonstration Project?

    The participation of an SSI recipient or concurrent SSI/SSDI 
beneficiary in the SSI Work Incentives Demonstration Project will be 
voluntary, as required under section 1110(b)(2)(B) of the Act and the 
implementing regulation at 20 CFR 416.250(d). Only those disabled or 
blind SSI recipients and concurrent SSI/SSDI beneficiaries who are 
enrolled or will enroll as participants in the SPI cooperative 
agreement projects in the States of California, New York, Vermont and 
Wisconsin will be eligible to become a participant in the SSI Work 
Incentives Demonstration Project. An enrollee in one of the SPI 
projects will become a participant in the SSI Work Incentives 
Demonstration Project by providing a voluntary written consent to be a 
participant in the SSI demonstration project. The individual's consent 
to participate in the SSI Work Incentives Demonstration Project may be 
revoked by the individual at any time. In addition, an individual's 
status as a participant in the SSI Work Incentives Demonstration 
Project will end if his or her participation in the SPI project ends.

How Will the SSI Demonstration Project Be Evaluated?

    The four States will collect data for each recipient regarding 
identifying information, educational and vocational background, 
services provided, work attempts and outcomes and use of the 
alternative SSI program rules. Each State will use the data to evaluate 
the effectiveness of the alternative SSI program rules under the 
project model in that State. In addition, the data will be sent by each 
State to Virginia Commonwealth University (VCU) for a process 
evaluation and will be analyzed by Mathematica, Inc., for a net 
outcomes evaluation. SSA has contracts with VCU and Mathematica to 
collect and analyze the data from the States to permit evaluation on a 
cross-State basis for the SSI Work Incentives Demonstration Project.

What Are the Statutory and Regulatory Provisions Being Waived to 
Conduct the SSI Work Incentives Demonstration Project?

    We are waiving the following requirements, conditions, or 
limitations under title XVI of the Act and the implementing regulations 
to the extent necessary to permit the application of the alternative 
SSI program rules described above to participants in the SSI Work 
Incentives Demonstration Project.
1. ``Three-for-Four''--Increase Earned Income Exclusion
    We are waiving the limitation on the earned income exclusion under 
sections 1612(b)(4)(A)(i) and (b)(4)(B)(iii) of the Act and 20 CFR 
416.1112(c)(7) to the extent necessary to permit, after the exclusion 
of the first $65 per month of earned income not otherwise excluded as 
provided under the statute and regulations, the exclusion of three-
fourths of a project participant's remaining earned income in a month 
for the purpose of determining a participant's countable income for SSI 
program purposes.
2. ``Unearned Income Related to Work Activity''--Treat as Earned Income
    We are waiving the limitations on excluding unearned income under 
section 1612(b) of the Act and 20 CFR 416.1124 to the extent necessary 
to permit, in addition to any other allowable unearned income 
exclusions authorized under the statute and regulations, the exclusion 
of the first $65 per month of specified types of unearned income of a 
project participant, plus three-fourths of the amount of a 
participant's remaining specified types of unearned income in a month, 
for the purpose of determining a participant's countable income for SSI 
program purposes. The types of unearned income covered by this 
exclusion are: unemployment insurance benefits, worker's compensation 
benefits, State disability benefits, and disability-related benefits 
paid through private insurance plans.
3. ``Independence Account''--Create New Resource Exclusion
    We are waiving the limitations on excluding resources under section 
1613 of the Act and 20 CFR 416.1210 to the extent necessary to permit 
the exclusion of monies conserved (and any interest accrued thereon) in 
one ``Independence Account'' of a project participant that meets 
certain requirements, for the purpose of determining a participant's 
countable resources for SSI program purposes. Only wages earned by an

[[Page 7829]]

individual while a project participant and before October 1, 2003, may 
be deposited in the account, not to be commingled with any other 
monies, with deposits limited to 50 percent of gross earnings, not to 
exceed $8,000 per year. A 24-month spend-down period, during which the 
resource exclusion will continue to apply, will begin October 1, 2003 
or, if earlier, when the individual's participation in the project 
ends.
4. ``Medical CDRs''--Suspend for Certain Participants
    We are waiving the requirements for SSA to conduct medical CDRs 
under sections 1619(a)(2) and 1631(j)(2) of the Act, and 20 CFR 
416.990, to the extent necessary to preclude the initiation of medical 
CDRs under these provisions for project participants who are SSI-only 
recipients with MIP or MINE diaries.

    Authority: Section 1110(b) of the Social Security Act.

(Catalog of Federal Domestic Assistance Program No. 96.006--
Supplemental Security Income)

    Dated: January 18, 2001.
Kenneth S. Apfel,
Commissioner of Social Security.
[FR Doc. 01-2226 Filed 1-24-01; 8:45 am]
BILLING CODE 4191-02-P