Social Security Disability Program Demonstration Project: Benefit Offset Pilot Demonstration, 75492-75494 [E8-29334]

Agencies

• Social Security Administration

[Federal Register Volume 73, Number 239 (Thursday, December 11, 2008)]
[Notices]
[Pages 75492-75494]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29334]


-----------------------------------------------------------------------

SOCIAL SECURITY ADMINISTRATION


Social Security Disability Program Demonstration Project: Benefit 
Offset Pilot Demonstration

AGENCY: Social Security Administration.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: We are announcing our plans to terminate the Benefit Offset 
Pilot Demonstration (BOPD) project, which relates to the disability 
program under title II of the Social Security Act (the Act). In this 
demonstration, we are testing modifications to current program rules 
that apply to working title II disability beneficiaries. We are also 
modifying current rules for making outcome payments to providers of 
services under the Ticket to Work and Self-Sufficiency program (Ticket 
to Work program).

DATES: Effective Dates: Effective January 1, 2009, we are terminating 
the alternative program rules for treatment group participants of the 
BOPD who have not completed their trial work periods as of December 31, 
2008. We are continuing the alternative program rules for treatment 
group participants of the demonstration who have completed their trial 
work periods as of December 31, 2008, until they complete their 72-
month reentitlement periods.

FOR FURTHER INFORMATION CONTACT: Mark Green by e-mail at 
mark.green@ssa.gov, by telephone at (410) 965-9852, or by mail at 
Social Security Administration, Office of Program Development and 
Research, 3-E-26 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235.

SUPPLEMENTARY INFORMATION: We are conducting this project under the 
demonstration authority provided in section 234 of the Act.

Treatment of Work Activity Under Current Title II Disability Program 
Rules

    Section 222(c) of the Act and 20 CFR 404.1592 provide title II 
disability beneficiaries with a 9-month trial work period. During the 
trial work period, a title II disability beneficiary may test his 
ability to work and still be considered disabled.
    Sections 223(a)(1) and 202(d)(1), (e)(1), and (f)(1) of the Act 
provide that

[[Page 75493]]

a title II disability beneficiary can continue to test his ability to 
work for an additional period immediately following completion of the 
9-month trial work period if his disabling impairment continues. This 
additional period, known as the reentitlement period, ends after 36 
months or when the individual ceases to have a disabling impairment, 
whichever is earlier. Under these sections of the Act, a title II 
disability beneficiary's entitlement to benefits will not terminate due 
to his performance of substantial gainful activity (SGA) during the 
reentitlement period. However, section 223(e) of the Act provides that, 
subject to a ``grace period'' (described below), we will not pay 
benefits to the disability beneficiary or anyone collecting benefits on 
his account for any month in which he performs SGA during the 
reentitlement period. Sections 404.401a and 404.1592a of our 
regulations reflect these provisions of the Act.
    We will find that the beneficiary's disability ceased in the first 
month he performs SGA after the trial work period (Sec.  
404.1592a(a)(1)). If we determine that his disability ceased after the 
reentitlement period ended, then entitlement to and payment of benefits 
terminates with the second month after the month disability ceased. If 
the month disability ceased due to performance of SGA occurs during the 
reentitlement period, different rules apply. In that situation, we will 
find that entitlement to disability benefits terminates in the first 
month after the end of the reentitlement period in which he engages in 
SGA (Sec.  404.1592a(a)(3)).
    If we determine that a beneficiary's disability ceased during the 
reentitlement period because he performed SGA, we will pay benefits for 
the first month after the trial work period in which he engages in SGA 
and for the two succeeding months, whether or not he performs SGA in 
those months (Sec.  404.1592a(a)(2)). This three-month period is the 
``grace period.'' After the grace period, we will not pay benefits for 
any month during the reentitlement period in which the beneficiary 
performs SGA. However, we will pay benefits for any month during the 
reentitlement period in which the beneficiary does not perform SGA. 
When we determine whether a beneficiary performed SGA in a month after 
the grace period, we consider only his work in, or earnings for, that 
month. We do not apply the rules regarding averaging of earnings or 
unsuccessful work attempts.

The Benefit Offset Pilot Demonstration

    Section 234 of the Act directs us to carry out experiments and 
demonstration projects to determine the relative advantages and 
disadvantages of various alternative methods for treating work activity 
of title II disability beneficiaries. Under Section 234, we may waive 
compliance with the benefit requirements of title II of the Act and the 
requirements of section 1148 of the Act, as they relate to the title II 
program, insofar as is necessary for a thorough evaluation of the 
alternative methods under consideration.
    On August 1, 2005, we began a pilot demonstration testing the 
effects of applying a benefit offset as an alternative to the current 
rules for treating the work activity of a title II disability 
beneficiary who has completed a 9-month trial work period. Under the 
benefit offset in this demonstration project, we reduce disability 
benefits $1 for every $2 a beneficiary earns above the SGA threshold 
amount instead of stopping benefit payments.
    We implemented the BOPD for the following reasons:
     To test the effectiveness of modifications to current 
program rules in encouraging title II disability beneficiaries to 
return to work or increase their earnings; and
     to obtain information that we can use to assist in 
developing a more expansive benefit offset demonstration project, which 
we plan to conduct at nationally representative sample sites.
    We entered into contracts with Connecticut, Utah, Vermont, and 
Wisconsin to assist us in conducting this pilot demonstration to test a 
benefit offset in concert with various support services and to obtain 
information to help in the planning phases of the national 
demonstration project.

Alternate Title II Program Rules for Participants in the Treatment 
Group of the BOPD

    For this demonstration project, we have waived certain provisions 
relating to the reentitlement period contained in sections 223(a)(1) 
and (e) and 202(d)(1), (e)(1), and (f)(1) of the Act and in 20 CFR 
404.401a and 404.1592a. We have also waived continuing disability 
review (CDR) requirements under section 221(i) and related provisions 
of the Act and 20 CFR 404.1589 and 404.1590. Certain title II 
disability beneficiaries participate in a treatment group of the BOPD. 
We provided these beneficiaries the opportunity to take advantage of 
the following alternate program rules.
     For a disability beneficiary who completed a trial work 
period and whose disability ceased during his reentitlement period 
because he performed SGA, we pay disability benefits for months after 
the grace period and during the reentitlement period in which the 
beneficiary does SGA, subject to application of a benefit offset. Under 
the offset, we reduce the amount of the monthly benefits by $1 for 
every $2 the beneficiary earns above the SGA threshold amount. Using 
our current title II program rules, we determine the amount of monthly 
title II disability benefits that would have been payable to the 
beneficiary had he not engaged in SGA. We then apply the benefit offset 
to this monthly benefit amount.
     We consider the beneficiary's earnings on an annual basis 
in applying the benefit offset. We use averaging to determine whether 
the beneficiary's average monthly earnings are above the SGA amount 
and, if so, calculate the monthly benefit amount. We pay benefits based 
on the beneficiary's estimated annual earnings and make necessary 
adjustments when the year ends, or sooner if relevant information is 
available.
     We provide a reentitlement period of up to 72 months. The 
reentitlement period ends the last day of the 72nd month following the 
end of the trial work period or with the month before the first month 
that the impairment no longer exists or is no longer disabling, 
whichever is earlier.
     We do not begin a CDR for a beneficiary participating in 
the treatment group either before or during his extended reentitlement 
period.
     For persons entitled to dependents' benefits based on the 
earnings record of a disability beneficiary participating in the 
treatment group, we may pay dependents' benefits for months in which 
the disability beneficiary performs SGA after the grace period and 
during his reentitlement period. We pay monthly dependents' benefits 
that would have been payable had the disability beneficiary not engaged 
in SGA.

Alternate Ticket to Work Program Rule Under the BOPD

    Under the Ticket to Work program, we may pay outcome payments to a 
provider of services to whom a title II disability beneficiary has 
assigned a ticket. Section 1148(h) of the Act and 20 CFR 411.525 
provide that we pay outcome payments only for those months for which we 
do not pay benefits due to the beneficiary's work or earnings. We have 
waived this

[[Page 75494]]

requirement in order to provide an alternate rule for paying outcome 
payments to a provider of services to whom a beneficiary in the 
treatment group has assigned a ticket. Under the alternate rule, we may 
pay outcome payments for months in which the beneficiary has earnings 
above the SGA amount. We may pay an outcome payment even though we 
reduce the benefit payment because of earnings instead of stopping the 
payment.

Terminating the Alternate Rules for BOPD Participants Who Have Not 
Completed Their Trial Work Periods

    In the BOPD, we have been testing the overall effects of a benefit 
offset under the title II disability program, including its 
effectiveness in encouraging disability beneficiaries to return to work 
and its impact on agency operations. We have been gathering information 
regarding the effect of the availability of a benefit offset on 
beneficiaries' efforts to work or increase their earnings. In addition, 
we have been evaluating our procedures to administer the benefit offset 
under the BOPD. Based on this evaluation, we have concluded that the 
process developed for administering the benefit offset under the BOPD 
is inefficient and administratively burdensome.
    We have used the information obtained from this pilot demonstration 
to develop and refine a national benefit offset demonstration project. 
Over the course of this pilot demonstration project, we shared 
significant data and analysis with the design contractor for the 
national demonstration project. Based on this information, the design 
contractor extensively modified its design proposals. We have concluded 
the contract for design of the national project, and we are developing 
a system to provide an efficient method for administering a benefit 
offset provision under the national demonstration project.
    Because the process we developed for administering the benefit 
offset under the BOPD proved to be inefficient and administratively 
burdensome, we are curtailing this pilot demonstration project. We are 
terminating the alternate rules for participants who have not worked 
long enough or at a sufficient level to qualify for the benefit offset 
provision. Effective January 1, 2009, we are terminating the alternate 
title II disability program rules and the alternate Ticket to Work 
program rule, for participants in the BOPD treatment group who have not 
completed their trial work periods by December 31, 2008. We will 
continue the alternate rules for participants in the treatment group 
who have completed their trial work periods by December 31, 2008, and 
therefore are eligible for the benefit offset, until these 
beneficiaries complete their 72-month reentitlement periods.

    Dated: December 5, 2008.
Michael J. Astrue,
Commissioner of Social Security.
[FR Doc. E8-29334 Filed 12-10-08; 8:45 am]
BILLING CODE 4191-02-P