Unlike recipients of Social Security Disability Insurance (SSDI) benefits, Supplemental Security Income (SSI) beneficiaries must conform to very strict income and asset limits. Often, SSI beneficiaries who could hold a job do not pursue one because they are worried that they will lose their benefits once they earn too much. While this is certainly a concern, for certain people the benefits of employment may outweigh the loss of SSI. Furthermore, the government provides specific incentives for SSI beneficiaries to work. For instance, if a person with disabilities is under 22 and at school or in a vocational training program, $1,730 of his monthly income does not count against his SSI benefit, up to a yearly limit of $6,960. Beneficiaries who do not meet this profile have another option -- the Plan for Achieving Self-Support, known as PASS, which, if properly used, may even increase a beneficiary's SSI award.
PASS allows SSI beneficiaries to use their non-SSI income to pay for job training or to start a business. If beneficiaries follow the complicated rules governing the program, the Social Security Administration (SSA) will not count income used for PASS against an SSI beneficiary's award. This makes it possible for beneficiaries who see their SSI awards reduced because they receive additional income (either from working, SSDI payments, or other unearned income) to instead use that income for job training without the loss of their SSI benefit.
In order to qualify for a PASS, a beneficiary must submit an application to the SSA. The main portion of the application is a detailed plan outlining a work or business goal along with the steps necessary for obtaining that goal. As part of their plan, the beneficiaries must explain in detail what items and services they require and they must also submit specific cost estimates for these materials and programs. Applicants can use income withheld through PASS to pay for transportation to work or school, child care, employment services, and uniforms, among other benefits. The SSA reviews the plans and works with a successful applicants to make sure they progress towards their work goal.
Since SSI income and asset rules tend to be complicated, a quick example can help illustrate how PASS works. Barbara is a 25-year-old woman who receives SSI benefits. If she had no other income, Barbara could receive up to $710 a month from SSI (this amount differs in each state). However, Barbara also receives $500 a month from SSDI, which, since it is unearned income, reduces her SSI award to $210 (the original $710 - $500 unearned income, deducted on a dollar-for-dollar basis). If Barbara applies for the PASS program with the goal of becoming a florist, and is approved for a plan that allows her to set aside $500 a month to attend a floral decorating school, the SSA will allow her to set aside $500 in unearned income to pay for the program -- without penalty. Since her $500 SSDI payment now funds her PASS plan and does not get deducted from her SSI benefit as unearned income, Barbara can collect her full $710 monthly SSI payment, and she gets to become a florist!
Putting together a complete and effective PASS application is not easy, but a qualified special needs planner can help to determine if PASS may be a fit for you or your loved one.Article Last Modified: 01/24/2015
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