Bipartisan reforms could help disabled Americans trying to work

The incoming Biden administration has outlined a number of proposals to support Social Security and Supplemental Security Income (SSI) disability beneficiaries who are voluntarily attempting to re-enter the workforce. Both Republicans and Democrats have shown an interest in this policy area, and it may be one of the areas where some policy consensus can be achieved — even with potentially divided government.

In particular, some modest and straightforward steps can be taken to improve Social Security’s Ticket to Work (TTW) program. Created in 1999, TTW assists disability beneficiaries attempting to work. The program, in essence, has three integrated parts: planning, job preparation and placement, and work incentives.

The planning aspect is handled by community organizations called Work Incentives Planning and Assistance (WIPA) organizations. WIPAs help beneficiaries formulate a basic plan about returning to work and help beneficiaries understand the complex rules on how earnings affect Social Security payments.

With regard to job preparation and placement, prior to TTW, disability beneficiaries could only receive services through state Vocational Rehabilitation (VR) agencies. TTW added a service option where beneficiaries could work with private sector Employment Networks (ENs) to be placed in jobs.

Work incentives are features of the Social Security law that encourage disability beneficiaries to attempt a return to work. The rules are complicated – hence the need for WIPAs – but, in general, they provide an extended period for beneficiaries to work and earn before benefit payments are stopped.

While the TTW program has an integrated and rational structure, it is a program of modest size. Each year about 350,000 disability beneficiaries receive services. The vast majority of disability beneficiaries do not participate in the program for the simple reason that their health prevents them from working.

Programs of modest size, such as TTW, are often the targets of poor policy proposals. This is because policymakers assume the programs should affect more people. But this type of view reflects muddled thinking. An important example will illustrate.

The first budget in the Trump administration envisioned large savings ($49 billion over 5 years) from unspecified efforts to move Americans from the disability programs into the workforce — but the underlying health problems of disability beneficiaries are so severe that savings of the magnitude envisioned by the administration were never going to happen.

Confronted with this reality, the Trump administration then later advocated for legislation to move the TTW program from SSA to the Department of Labor, hinting such a move would sharply increase workforce participation among disability beneficiaries — but putting the program in a different box in the federal government’s organizational chart is a controversial and unserious proposal.

While savings of the magnitude envisioned by the Trump administration in its budgets were never realistic, it is important to note that the savings to the federal government from TTW participants foregoing Social Security or SSI benefits due to work are not trivial: $3.5 billion from 2002-2014.

Congress and the incoming Biden administration should look for some modest, straightforward ways to improve the TTW program. Several approaches that could enjoy bipartisan support are possible.

First, Congress should increase funding for WIPAs. The annual funding for these organizations has been frozen at $23 million for the last 20 years. If adjusted for inflation, the $23 million figure should be about $36 million today. Simply put, these community organizations need to be adequately funded if Congress wants disability beneficiaries to understand the complex work incentives that both Republicans and Democrats have put in the law.

Congress may also wish to move the WIPA funding out of SSA’s administrative accounts and into the mandatory accounts, such as the SSI accounts. In fact, most spending under the TTW program (payments by SSA to private sector Employment Networks and state Vocational Rehabilitation agencies) already comes from the mandatory accounts. Such a move would also have the beneficial effect of alleviating the current underfunding of SSA’s administrative budget. 

Additionally, while the TTW program has an integrated and rational structure, there is one missing piece: service to transition-age youth. SSI recipients, ages 14-17, could be better served if private sector Employment Networks were allowed to assist them (currently, the law only allows state Vocational Rehabilitation agencies to provide job preparation and support services to these youth) and if community organizations, with additional WIPA funding, could serve as robust connectors between families with disabled youth and private sector Employment Networks and state Vocational Rehabilitation agencies.

This approach would help leverage an important work incentive, called Section 301, that allows younger SSI recipients to retain their benefits for a period of time, after reaching age 18, so long as they are working with a service provider (such as a state Vocational Rehabilitation program) to prepare for gainful employment in adulthood.

Finally, Congress may wish to simplify some of the work incentives, including removing the limit in the Student Earned Income Exclusion. This proposal, which was supported by the Trump administration, would better allow disabled students (under age 22) to have earnings in summer or other months without having their SSI reduced.

With potentially divided government, it will be important for policymakers to identify areas where some consensus could emerge. Making modest, straightforward improvements to programs that encourage success in the labor market for disabled persons, particularly disabled youth, is one such area.

David A. Weaver, Ph.D., is an economist and retired federal employee who has authored a number of studies on the Social Security program. The views in this article do not reflect the views of any federal agency.