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Social Security’s Programs As a Barrier to Employment

Both of Social Security’s disability programs – Disability Insurance (DI) and Supplemental Security Income (SSI) – require that recipients have an impairment that prevents them from working at any job in the American economy with earnings above "Substantial Gainful Activity" (SGA), $785 per month. Once an individual with a disability qualifies for DI or SSI, they receive monthly cash benefits and entitlement to health care coverage – Medicaid for SSI beneficiaries, and Medicare for DI beneficiaries (after a two-year waiting period). Once on cash and health benefits, it becomes very difficult to ever get off of benefits through employment, especially part-time employment.

For many consumers, the strict eligibility rules for these programs operate as a barrier to employment.

  • First, DI recipients can face the complete loss of all cash benefits for even minimal earnings above SGA (after their limited allowance of "Trial Work Period" months are consumed).
  • Second, even limited work can trigger a "Continuing Disability Review" from Social Security and result in complete loss of all cash and health benefits. Third, limited work can result in beneficiaries being placed in "overpayment" status and having to return thousands of dollars in back benefits years later.

Finally, and more important than the treat of losing cash benefits for many, is the threat of losing eligibility for health care coverage under Medicare and Medicaid.