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Impairment Related Work Expense

Overview

Work expenses that are related to your disability can be included in the work incentive called "Impairment Related Work Expense (IRWE)" when:

1.           The item or service enables you to work;

2.           You need the item or service because of your disabling impairment;

3.           You pay the cost and are not reimbursed by another source (e.g., Medicare, Medicaid, private insurance;

4.           The expense is "reasonable" – that is, it represents the standard charge for the item or service in your community; and

5.           You paid the expense in a month in which you are or were working (occasionally, an impairment-related work expense may be used before the first or after the last month of work activity).

See IRWE Examples, below, for a list of the types of expenses that can and can not be included in an IRWE.

IRWEs can be confusing because they are used in a number of different ways:

·     IRWE for SSI Recipients to increase SSI benefits

·     IRWE for SSI Applicants to be eligible for at least $1 of SSI Cash Benefit

·     IRWE for SSI Applicants to meet the SGA eligibility test

·     IRWE for SSDI Beneficiaries to meet the SGA test for benefit payments and eligibility.

·     IRWE for SSI 1619(b) Medicaid Recipients establishing an Individualized Threshold

IRWE for SSI Recipients to increase SSI benefits

This is probably the most common use of IRWE. The amount of disability-related work expenses that you include in your IRWE is subtracted from your gross earnings prior to subtracting one-half of the remainder. The effect is to raise your SSI benefit by up to one-half of the IRWE amount.

Note: if the disability-related work expenses can be included in a Plan for Achieving Self-Support (PASS) rather than in an IRWE, they reduce countable income dollar-for-dollar, rather than by one-half of the amount. SSA decides whether or not your disability-related work expenses are related to the occupational goal of your PASS, and can be included in a PASS.

Disability-related work expenses that are included in this type of IRWE can not also be included in a PASS.

If you have told WorkWORLD that you are receiving SSI benefits – and you have said that you have disability-related work expenses -- WorkWORLD asks you about this use of IRWE with the question: "IRWE-SSI: Are you claiming any of your disability-related work expenses as Impairment Related Work Expenses (IRWEs) in order to increase your SSI benefit amount?"

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IRWE for SSI Applicants to be eligible for at least $1 of SSI Cash Benefit

In order to be financially eligible for SSI, your countable income must be low enough so that you are eligible to receive at least $1 of SSI cash benefits. An IRWE can be used either alone, or in conjunction with a Plan for Achieving Self-Support (PASS) to meet this eligibility criterion.

Note: if the disability-related work expenses can be included in a PASS rather than in an IRWE, they reduce countable income dollar-for-dollar, rather than by one-half of the amount. SSA decides whether or not your disability-related work expenses are related to the occupational goal of your PASS, and can be included in a PASS. If an IRWE, by itself, is sufficient to meet this test, then it is simpler and easier to implement than a PASS.

Disability-related work expenses that are included in this type of IRWE can not also be included in a PASS.

If you have answered "Yes" to WorkWORLD’s question, "Would you want to get SSI and Medicaid except that you have too much income or financial resources?" -- and if you have said that you have disability-related work expenses -- WorkWORLD asks you about this use of IRWE with the question: "IRWE for SSI Cash Benefit Eligibility: Are you claiming any of your disability-related work expenses to receive at least $1 of SSI Cash Benefits?"

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IRWE for SSI Applicants to meet the SGA eligibility test

In order to be financially eligible for SSI, your earnings must not exceed the Substantial Gainful Activity (SGA) level. To determine whether or not your earnings exceed SGA, the only amount that is deducted from your gross earnings are those disability-related work expenses that are included in this form of IRWE. SSA does not apply any of the other exclusions or deductions normally used to determine countable income for SSI. That is, SSA does not deduct the $65 earned income exclusion, the $20 general exclusion, one-half the remainder, Plan for Achieving Self-Support (PASS), Blind Work Expense (BWE), or Student Earned Income Exclusion (SEIE).

The IRWE deduction is a dollar-for-dollar deduction from gross earnings. If, for example, your earnings are $100 over the SGA amount and you have $100 of disability-related work expenses included in an IRWE, then you meet the SGA test.

Including your disability-related work expenses in this use of IRWE does not affect your ability to include the expenses in a PASS (or in an IRWE to raise SSI benefits).

If you have answered "Yes" to WorkWORLD’s question, "Would you want to get SSI and Medicaid except that you have too much income or financial resources?" -- and if you have said that you have disability-related work expenses -- WorkWORLD asks you about this use of IRWE with the question: "IRWE for SSI Eligibility (SGA): Are you claiming any of your disability-related work expenses in order to meet the SGA test for SSI Eligibility?"

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IRWE for SSDI Beneficiaries to meet the SGA tests for benefit payments and eligibility

For SSDI Beneficiaries, having earnings that do or do not exceed the Substantial Gainful Activity (SGA) level has an effect in four different ways:

·     Applicants for SSDI benefits must meet the SGA test to be eligible for benefits

·     Beneficiaries who have completed their nine-month Trial Work Period (TWP) begin their three-month Grace Period if their earned income exceeds SGA

·     Beneficiaries who are in their Extended Period of Eligibility (EPE) receive their cash benefits when their earnings do not exceed SGA, and do not receive them when their earnings exceed the SGA level.

·     Beneficiaries who have completed their 36-month EPE lose their SSDI eligibility if their earnings exceed the SGA level.

In each of these situations, disability-related work expenses included in an IRWE can be deducted dollar-for-dollar from gross earnings to determine whether earnings exceed SGA.

NOTE: Plans for Achieving Self-Support (PASSes), Blind Work Expense (BWE), or Student Earned Income Exclusion (SEIE) cannot be used for this purpose. Subsidies for Extra Supervision and Subsidies for Reduced Work Duties can be deducted from gross earnings to determine whether earnings exceed SGA.

If you have told WorkWORLD that you are an SSDI beneficiary who has disability-related work expenses, WorkWORLD asks you about this use of IRWE with the question, "IRWE-SSDI: Do you claim any of your disability-related work expenses as an Impairment-Related Work Expense (IRWE) to determine if your earnings exceed SGA?"

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IRWE for SSI 1619(b) Medicaid Recipients establishing an Individualized Threshold

If you are an SSI recipient with enough earnings to reduce your SSI cash benefit to zero, and if you showed that you needed Medicaid in order to work, then you normally would be receiving Medicaid benefits under the work incentive called "1619(b) ".

The 1619(b) work incentive allows you to keep your Medicaid benefits as long as your gross earnings do not exceed the "threshold" for your State. If your gross earnings exceed the threshold, SSA determines whether you would be eligible using an individualized threshold calculation. That calculation adds the dollar amount of any Plan for Achieving Self-Support (PASS), IRWE or Blind Work Expense (BWE) that you have (as well as any unusual medical expenses and attendant care expenses you may have.)

If you are an SSI Recipient and have told WorkWORLD that you earn more than the threshold amount for your State, WorkWORLD asks you the question, "Individualized Threshold: Has an individualized earnings threshold been established for you (above which you lose Medicaid coverage)?"

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IRWE Examples

The following are examples of the types of disability-related work expenses likely to be deductible as IRWEs as long as they are reasonable and not reimbursed by another source:

1. Deductible Attendant Care Services

·     Performed in the work setting.

·     Performed to help you prepare for work, the trip to and from work and after work (e.g., bathing, dressing, cooking, and eating).

·     Services that incidentally also benefit your family (e.g., meals shared by you and your family).

·     Services performed by your family member for a cash fee where he/she suffers an economic loss by reducing or ending his/her work in order to help you (e.g., your spouse reduces work hours to help you get ready for work).

2. Deductible Transportation Costs

·     The cost of structural or operational modifications to your vehicle which you need in order to travel to work, even if you also use the vehicle for non-work purposes.

·     The cost of driver assistance or taxicabs where unimpaired individuals in the community do not generally require such special transportation.

·     Mileage expenses at a rate determined by SSA for an approved vehicle and limited to travel to and from employment.

3. Deductible Medical Devices

·     Wheelchairs, hemodialysis equipment, pacemakers, respirators, traction equipment, and braces (arm, leg, neck, back, etc.).

4. Deductible Work-Related Equipment and Assistants

·     One-handed typewriters, typing aids (e.g., page-turning devices), measuring instruments, reading aids for visual impairments, electronic visual aids, Braille devices, telecommunications devices for hearing impairments and special work tools.

·     Reader services if you are visually impaired, interpreter services if you are hearing impaired, expenses for a job coach.

5. Deductible Prosthesis

·     Artificial hip, artificial replacement of an arm, leg, or other parts of the body.

6. Deductible Residential Modifications

·     If you are employed outside of home: Modifications to the exterior of your house that permit access to the street or to transportation (e.g., exterior ramps, railings, and pathways).

·     If you are self-employed at home: Modifications made inside your home in order to create a workspace to accommodate your impairment (e.g., enlarge doorway into an office or workroom, the modification of office space to accommodate your problems in dexterity).

7. Deductible Routine Drugs and Routine Medical Services

·     Regularly prescribed medical treatment or therapy that is necessary to control your disabling condition (even if control is not achieved), such as anti-convulsant drugs or blood level monitoring; radiation treatment or chemotherapy; corrective surgery for spinal disorders; anti-depressant medication, etc. Your physician’s fee relating to these services is deductible.

8. Deductible Diagnostic Procedures

·     Any procedure related to the control, treatment, or evaluation of your disabling condition (e.g., brain scans, and electroencephalograms).

9. Deductible Non-Medical Appliances and Devices

·     In unusual circumstances, when devices or appliances are essential for the control of your disabling condition either at home or at work (e.g., an electric air cleaner if you have severe respiratory disease), and this need is verified by a physician.

The following are examples of expenses not likely to be deductible as IRWEs:

1. Non-Deductible Attendant Care Services

·     Performed on non-workdays or helping you with shopping or general homemaking (e.g., cleaning, laundry).

·     Performed for someone else in your family (e.g., babysitting).

·     Services performed by your family member for a cash fee where he/she suffers no economic loss, e.g., your non-working spouse provides service).

·     Services performed by your family member for payment "in-kind" (e.g., room and board) regardless if the family member suffers economic loss.

2. Non-Deductible Transportation Costs

·     The cost of your vehicle whether modified or not.

·     The cost of modification to your vehicle not directly related to your impairment or critical to your operation of the vehicle (e.g., paint or décor preferences).

·     Your travel expenses related to obtaining medical items or services

3. Non-Deductible Medical Devices

·     Any device you do not use for a medical purpose.

4. Non-Deductible Work-Related Equipment and Assistants

·     If you are self-employed, equipment previously deducted as a business expense.

5. Non-Deductible Prosthesis

·     Any prosthetic device that is primarily for cosmetic purposes.

6. Non-Deductible Residential Modifications

·     If you are employed outside of home: Modifications to your house to help you in your home (e.g., enlarge interior doorframes, lower kitchen appliances and bathroom facilities, interior railings, stairway chair lift).

·     If you are self-employed at home: Any modification expenses you previously deducted as a business expense in determining SGA.

7. Non-Deductible Routine Drugs and Routine Medical Services

·     Drugs and/or medical services used for your minor physical or mental problems (e.g., routine physical examinations, allergy treatment, dental examinations, and optician services.

8. Non-Deductible Diagnostic Procedures

·     Procedures not related to your disabling condition (e.g., allergy testing).

9. Non-Deductible Non-Medical Appliances and Devices

·     Devices you use at home or at the office which are not ordinarily for medical purposes (e.g., portable room heaters, air conditioners, dehumidifiers, and humidifiers) and for which your doctor has not verified a medical work-related need.

NOTE: All of the examples were drawn from SSA’s Red Book on Work Incentives, September, 1999 edition. See the SSA Red Book topic for additional information.

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