National Alliance on Mental Illness
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Employment and Income Supports

The unemployment rate of persons with severe mental illnesses remains extraordinarily high – up to 80-90%, according to some estimates. Persons with severe mental illnesses are one of the largest populations on the federal disability rolls. They are more likely to enter the disability rolls at a younger age and remain on them longer than persons with other types of disabilities. To address this issue Congress in recent years has passed several changes to federal disability income and employment programs. Among these are the new Ticket-to-Work and Work Incentives Improvement Act of 1999 (PL 106-170) - amendments modifying the Rehabilitation Act of 1973 and the Workforce Investment Act. Despite these efforts, barriers to employment remain.

Disincentives to Work Still Dominate Social Security’s Disability Programs

In 1999 Congress passed the Ticket-to-Work and Work Incentives Improvement Act (TWWIIA), the most sweeping change in federal disability policy since the Americans with Disabilities Act. TWWIIA created the Ticket-to-Work Program at the Social Security Administration (SSA), created three new state Medicaid options for people with disabilities, extended free Medicare Part A coverage for an additional six years, and made several other changes that will reduce barriers to employment. However, despite this new law, several barriers remain that will thwart the progress made under the Ticket-to-Work program. Congress and the Bush Administration need to continue pressing SSA to fully and immediately implement the Employment Support Representative Program that was a part of the Ticket-to-Work legislation.

  • Social Security Disability Insurance (SSDI) Cash Cliff – Currently, if people receiving federal Disability Insurance (DI) benefits earn less than $810 a month, they keep all of their DI check. However, if they earn even $1 over $810 (substantial gainful activity level) in a given month, then they lose all of their disability check. The average DI benefit check is slightly under $800 a month. Thus, earning that additional dollar can result in a person’s income being cut by over 50% on a combined earnings and benefit level. Consequently, people on SSDI must limit the hours they work, turn down raises, and not accept better paying jobs.
  • Overpayments – SSA does not track and record the earnings of DI beneficiaries who work. This is true even if people inform SSA of their earnings. Consequently, some people on SSDI who work can accrue thousands of dollars in overpayments because SSA sends checks to people who are not supposed to get them. Worse, if the person is aware they are not supposed to get the funds there is no way for that person to return the benefits. The cost of these overpayments to the person can be devastating and the cost to the SSDI program is estimated to be $900 million a year. Measures are needed to ensure that SSA puts in place an income reporting system to prevent checks from being sent to beneficiaries who are ineligible due to work. Legislation pending in Congress (HR 743) would help by requiring SSA field offices to issue written receipts when earnings reports are submitted. Until then, NAMI proposes an estoppel policy that would bar SSA from collecting overpayments from beneficiaries that follow the rules and report their earnings.
  • SSA Field Staff Better Informed About Work Incentives – Currently few if any of the field staff working in SSA field offices are knowledgeable about the myriad of work incentives in the Social Security programs or how they affect an individual beneficiary.
  • Ticket Payment System – The Ticket is a voucher that a person gives to a provider. In return for helping the person go back to work, the provider is paid by SSA a share of the cash savings to SSI or SSDI that accrue because a person no longer receives cash benefits. For SSI, benefits are reduced $1 for every $2 earned by the beneficiary. SSA cannot pay providers until cash SSI benefits have ended, despite significant savings due to work. Congress and SSA must alter the payment system so that providers get a partial payment for savings resulting from offsets to their SSI benefit due to work.

Vocational Rehabilitation Unresponsive to Needs of Individuals With Mental Illness

Congress is currently considering changes to the Department of Education’s State-Federal Vocational Rehabilitation (VR) program as part of legislation reauthorizing the Workforce Investment Act (WIA). Over the years, the VR program has had difficulty getting services to persons with mental illnesses. In part, a lack of funding is the root of the problem. Many state VR agencies are under an "order of selection" meaning that there is not enough funding to serve all people who are eligible. The Order of Selection is designed to ensure that when funding falls short, people with the most severe disabilities are served. Unfortunately, some states put mental illness far down on the Order of Selection list of disabilities. NAMI supports the following changes to the VR program to promote more effective services for persons with mental illness:

  • VR Counselor Specialists in Mental Illness – State VR agencies need to hire and train counselors that have a specialty in the employment and rehabilitation of persons with mental illness,
  • Long-Term Job Supports – Significant increases are needed for the Title VI-C Supported Employment Program, which is designed to help people with the most severe disabilities receive long-term ongoing job supports, and
  • State Funding Under Order Selection – The formula for determining state match should be examined so that in these tight budget times for states federal funding, increases do not force more states into an Order of Selection.

Department of Labor Workforce Programs – Accessing the Mainstream System

Since 1997, the Workforce Investment Act (WIA) has required that the Department of Labor’s (DoL)Workforce programs address the needs of persons with disabilities. Most of the employment services offered by the DoL are made available through "One-Stop Shop" state employment offices. Unfortunately, these offices and their staffs are not always aware of their mission and in some cases staff refer people with disabilities to the state VR program - a violation of federal law. The DoL Office of Disability Employment Policy (ODEP) is tasked with developing and implementing policies and programs for people with disabilities at DoL and in the states. WIA is up for reauthorization in 2004 (HR 1261), presenting an opportunity for Congress to improve the performance of the One-Stop system.

  • State Employment Office and Staff – State employment offices should establish disability specific programs and hire staff with expertise in the employment of people with mental illness.
  • Close Collaboration Between Federal Disability Employment Programs – DoL’s ODEP, SSA and the Rehabilitation Services Administration should coordinate services for persons with mental illness.

Reforms Needed for SSA’s Representative Payee Program

Many SSI and SSDI recipients with mental illness receive their monthly cash benefits through Representative Payees that assist them in managing their benefits. For nearly five years, Congress has been working on legislation to reform the Representative Payee program to protect the interests of vulnerable beneficiaries in cases of fraud and abuse perpetrated by for-profit and institutional Representative Payees. Among other reforms, this legislation would make it easier for SSI and SSDI beneficiaries who are victims of fraud and abuse to receive restitution of back benefits. In 2003, the House passed HR 743, the Social Security Protection Act. A compromise version of this bill cleared the Senate in December and now must come back to the House before being sent to the President. NAMI urges the House to expedite passage of HR 743 early in 2004.

January 2004