Self-Employment Steps for Vocational Rehabilitation Counselors: Helping a Consumer Start a Business


Study Guide Answers
Chapter 8: Social Security Work Incentives

1. Total Countable Unearned Income Calculations

Total Countable Unearned Income Calculations
SSDI Unearned Income
$859
Minus General Exclusion
-20
Total Countable Income Available for Pass Investment
$839

Rodney needs $7,120 for his down payment. It will take him about 81/2 months to accrue this amount through his PASS.

2.A person with earned income.

Total Countable Earned Income Calculations
Earned Income Before Taxes
$850.00
Minus General Exclusion
-20.00
Minus Earned Income Exclusion
- 65.00
Total
$765.00
Divide by 2
divide by 2
Total Countable Earned Income
$382.50
   
Revised Countable Income Calculations
Total Countable Income
$382.50
Minus PASS investment
- 382.50
Revised Total Countable Income
$ 0
   
SSI Benefit Calculation
Federal Benefit Rate
$564.00
Minus Revised Total Countable Income
- 0
SSI Cash Benefit
$564.00
   
PASS Investment
$382.50
   
Usable Discretionary Income Calculations
Earned Income Before Taxes minus Countable Earned Income
$467.50
SSI Cash Benefit
$564.00
Usable Discretionary Income
Medicaid + $1,031.50
   

Dividing $2,980 (cost of school) by $382.50, which is the amount available for a PASS, indicates that Sarah could pay for her education with 8 months of PASS. But she could also include other necessary items in the PASS during her 24 months of education PASS eligibility. For example, the total amount of PASS money available for her over the 2-year period is $9,180 ($382.50 per month). This money could be used to pay for transportation, clothes, or some other item or service to help her through school.


3. First, Deb should put at least $3,300 ($3,500 + $1,800 - $2,000) into the PASS to maintain her SSI and Medicaid eligibility (remember the resource limit is $2,000 for a single person). Her monthly discretionary income stays the same, but she now has $343 to invest towards her education.

This is a situation where the complexities of the SSI program could be involved. Is the $3,500 received as a “back payment check” retroactive SSI? If so, it will not “count” as a resource for 6 full months after receipt. If it is another kind of income, the receipt of it–as opposed to the continued possession of it–may have an impact on Deb’s SSI. In which case she may want to set the whole countable part into the PASS to avoid overpayment or payment reduction for one month. If this were a private disability payment, for instance, by only setting aside $3,300, she will lose $180 in SSI, as the part not invested in the PASS is countable unearned income. If this back-payment check is wages, which is unlikely, Social Security uses the regular earned income exclusion.

 

Before Pass:

Total Countable Earned Income Calculations
Earned Income Before Taxes
$705.00
Minus General Exclusion
-20.00
Minus Earned Income Exclusion
- 65.00
Total
$620.00
Divide by 2
divide by 2
Total Countable Earned Income
$310.00
   
SSI Benefit Calculation
Federal Benefit Rate
$564.00
Minus Total Countable Earned Income
-310.00
SSI Cash Benefit
$254.00
   
Discretionary Income
Earned Income Before Taxes
$705.00
SSI Cash Benefit
$254.00
Total
Medicaid + $959.00
   

 

After PASS:

Total Countable Earned Income Calculations
Earned Income Before Taxes
$705.00
Minus General Exclusion
-20.00
Minus Earned Income Exclusion
- 65.00
Total
$620.00
Divide by 2
divide by 2
Total Countable Earned Income
$310.00
   
Revised Countable Income Calculations
Total Countable Income
$310.00
Minus PASS investment
- 310.00
Revised Total Countable Income
$ 0
   
SSI Benefit Calculation
Federal Benefit Rate
$564.00
Minus Revised Total Countable Income
- 0
SSI Cash Benefit
$564.00
   
PASS Investment
$310.00
   
Usable Discretionary Income Calculations
Earned Income Before Taxes minus Countable Earned Income
$395.00
SSI Cash Benefit
$564.00
Usable Discretionary Income
Medicaid + $959.00
   


4. Calculations for a person with earned and unearned income:

Total Countable Earned Income Calculations
Earned Income Before Taxes
$750
Minus Earned Income Exclusion
- 65
Total
$685
Divide by 2
divide by 2
Total Countable Earned Income
$342.50
   
Total Countable Unearned Income Calculations
SSDI
$768
Minus General Exclusion
- 20
Total Countable Unearned Income
$748
   
Total Countable Income Calculations
Total Countable Earned Income
$342.50
Total Countable Unearned Income
+ 748.00
Total Countable Income Available for PASS investment
$1090.50
   
Revised Countable Income Calculations
Total Countable Income
$1090.50
Minus PASS investment
- 1090.50
Revised Total Countable Income
$ 0
   
SSI Benefit Calculation
Federal Benefit Rate
$564
Minus Revised Total Countable Income
- 0
SSI Cash Benefit
$564
   
PASS Investment
$1090.50
   
Usable Discretionary Income Calculations
Earned Income Before Taxes minus Countable Earned Income
$407.50
SSI Cash Benefit
$564.00
Usable Discretionary Income
Medicaid + $971.50
   


5. It will take Chuck 31 months to purchase the machine. His SSI payment is $564.

Total Countable Earned Income Calculations
Projected Earned Income Before Taxes
$900
Minus General Exclusion
-20
Minus Earned Income Exclusion
- 65
Total
$815
Divide by 2
divide by 2
Total Countable Earned Income
$407.50
   
Revised Countable Income Calculations
Total Countable Income
$407.50
Minus PASS investment
- 407.50
Revised Total Countable Income
$ 0
   
SSI Benefit Calculation
Federal Benefit Rate
$564
Minus Revised Total Countable Income
- 0
SSI Cash Benefit
$564
   
PASS Investment
$407.50
   
Usable Discretionary Income Calculations
Earned Income Before Taxes minus Countable Earned Income
$492.50
SSI Cash Benefit
$564.00
Usable Discretionary Income
Medicaid + $1056.50
   


6. Working (employed)