Work Incentives

Overview of Work Incentives

  • Earned Income Exclusion

    • Available for SSI recipients
    • Less than half of earnings count against benefits
  • Student Earned Income Exclusion

    • Available for SSI recipients
    • If under the age of 22 and attending school regularly, up to $1,750 of earned income per month is not counted against benefits (2014 rate)
  • Impairment Related Work Expenses (IRWE)

    • Available for SSDI and SSI recipients
    • Cost of certain disability related work expenses deducted from earnings counted against benefits
  • Plan for Achieving Self-Support (PASS)

    • Available for SSDI and SSI recipients
    • Income can be used to achieve a work goal; earnings set aside will not count against benefits
  • Continued Medicaid Coverage

    • Medicaid coverage can continue even after earnings become too high for SSI cash payment
  • Work Opportunity Tax Credit

    • Provides a federal tax incentive to employers who hire individuals with disabilities

What are Work Incentives?

Many work incentives exist that encourage young people with intellectual and developmental disabilities (IDD) to pursue competitive employment. For example, the Social Security Administration (SSA) builds incentives into its public benefits programs for individuals with disabilities. Unfortunately, many young people with disabilities and their family members do not have all the information they need related to the impact that working has on benefits, particularly Supplemental Security Income (SSI) and Medicaid, the public health insurance SSI recipients are enrolled in. Though the SSI cash benefits are designed to decrease as income increases, multiple work incentives are built into the program to encourage competitive employment.

The federal government also provides assistance (usually in the form of tax breaks) to employers who hire people with disabilities. It makes good business sense to hire young people with IDD. For example, the Work Opportunity Tax Credit (WOTC) can provide employers with a tax credit of up to 40 percent of the first $6,000 of first-year wages of a new employee.

Why Are Work Incentives Important?

Having a clear understanding of the impact working has on benefits is important. Too often, a fear of losing benefits can prevent young people and their families from pursuing opportunities that might lead to meaningful employment. Key facts to consider include:

How Can I Use Work Incentives?

For brief highlights of work incentives, look at the Overview of Work Incentives box on this page. Check out the helpful resources below as well.

Where Can I Learn More About Work Incentives?

Tennessee has a Benefits to Work program that provides accurate information so individuals can make informed choices about working, pursuing training or further education while helping to ease fear of losing healthcare and other benefits. Read more here…

The following links include guides, stories, and other resources related to work incentives for young people with IDD:

Social Security Work Incentives

When to Contact a Benefits Planner

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