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A back-to-work strategy can protect your benefits

March 1999

Disabled people who want to work need to strategize, and finances are the savviest place to start.

A 1998 AIDS Project Los Angeles client survey on employment issues discovered that the people on government disability benefits see loss of income and health insurance as one of the major obstacles to entering the workplace. This finding has been consistently supported by research nationwide.

Get organized

If you are thinking about a job, set up a financial check list, starting with take-home pay versus your benefits.

First of all, decide what you want to do, and how much you need or want to earn. Remember to calculate your income "after taxes."

Then -- and this is especially important -- investigate your benefits. See what effect your earnings will have on your monthly income, what you need to make to come out ahead, and whether your wages will cost you your benefits.

In general, people collecting Supplemental Security Income (SSI) can return to work part- or full-time. Their monthly benefits will be reduced by half their "gross" (or before tax) income from wages above the first $85 they earn (it is exempt).

You will need to calculate how far "ahead" you will be with a job, once you take the loss of benefit dollars into consideration.

Social Security Disability Insurance (SSDI) allows for a part- or full-time income from wages, with no reduction in benefits during the first year you work. However, if you consistently earn over $500 gross a month, your income from benefits may be "suspended" after the first year.

Translated into practical language, this means that people on SSDI do very well if they return to full-time jobs. They have their benefit plus wages in place for the first full year.

However, a part-time job paying over $500 a month could cost you your benefits if you keep working after the first year, leaving you with a part-time after-tax income to live on.

Plan ahead

SSDI's $500 benchmark is easily the single biggest financial obstacle keeping people from working. And you need to plan with that benchmark in mind. If you are going to work part-time, keep your monthly wages under $500.

With a little strategizing, it is entirely possible to make some extra money and keep part or all of your benefits. But you will need to educate yourself. Call APLA's Benefits Department at (323) 993-1472 or Work Services at (323) 993-1659 for information.

Individuals who receive income from a "long-term disability" insurance policy face additional obstacles when work is involved. Some of these plans allow for a return to the workplace; some definitely do not.

Call one of APLA's insurance counselors at (323) 993-1474 to set up a one-on-one counseling session. You will need to get a Summary Plan Description of your coverage from your employer or the insurance company. Without the plan, the counselors will not be able to advise you.


Unfortunately, if you collect permanent disability benefits, you need to look carefully not only at your income, but also your health insurance. SSI recipients get Medi-Cal automatically through their benefits. SSDI recipients receive Medicare after they have received benefits for 24 months.

In general, if you get Medi-Cal through SSI you can return to work part- or full-time and retain your "no share of cost" Medi-Cal until your annual income from wages hits $23,700. That's a good deal, and should make it much easier for you to think about working.

If you get Medicare through SSDI, your Medicare will stay in place for at least four years if you go to work, even if your dollar benefit is "suspended."

In Southern California, people with Medicare can generally get their drugs through the state AIDS Drug Program (ADAP) or through an HMO. Again, earned income would not interfere.

However, if you use Medi-Cal to cover your prescription drugs, and if your Medi-Cal is separate from your benefit, then a return to work will increase your monthly share of cost. And, once again, you will have to strategize.

Know your entitlements

Because health insurance is essential, contact the Benefits Department or Work Services to get the rundown on health insurance before you pick up that first paycheck.

If you are looking for a full-time job, or plan to work more than 30 hours a week, ask about the company's benefits package during your job interview. You do not need to worry that asking will alert a prospective employer to your health condition. Anyone looking for a job these days should be concerned with benefits packages.

Full-time work or working more than 30 hours a week for a company with benefits could qualify you for group health insurance. Under the Health Insurance Portability Act, passed by Congress a couple of years ago, employees are eligible for health insurance and cannot be subjected to "pre-existing conditions" clauses if they come to the job with health insurance in place during the previous six months.

If you have Medi-Cal or Medicare, you have health insurance in place, and you qualify.

Know your tax situation

Before you start pounding the pavement, make sure you also review your tax situation -- and not only in terms of take-home pay. How about back taxes?

Many people on disability benefits find themselves either in debt, or owing the government money. In general, debt or tax relief may be possible if you are permanently disabled, but going to work could change all that.

If you are deeply in the red to credit card companies or the IRS or the State Tax Franchise Office, call HIV & AIDS Legal Services Alliance at (323) 993-1640 before you go to work. HALSA can advise you on your tax situation, and potential problems. They also may be able to negotiate a workable payment plan if the government goes after your earnings.

Finally: a job!

The financial implications of going to work may seem daunting. But if you do your homework, you may find that getting a job is not only possible, but profitable. You just need to strategize before you sign on the dotted line.

For more information, call Work Services at (323) 993-1659.

This article has been reprinted at The Body with the permission of AIDS Project Los Angeles (APLA).

This article was provided by AIDS Project Los Angeles. It is a part of the publication Positive Living.
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