For Many Disabled People, Work Has a Price Tag

 My Story

Two letters changed my life forever. The first came in the summer of 2021, offering me my dream job as a researcher at the Yang-Tan Institute on Employment and Disability at Cornell University’s ILR School. This job would pay me to follow my passion, researching barriers that people with disabilities face in the labor market and creating lasting political and institutional changes.

The second came two years later, and it didn’t evoke the same emotion as the first. I received a letter from the Social Security Administration (SSA) stating that my disability-related benefits would stop immediately due to my work earnings, and I needed to pay back an overpayment of over $100,000. Essentially, the SSA put a price tag on my dream job.

This price tag wasn’t the result of carelessness on my part – I promptly filled out and sent back every form that I received from the SSA. Rather, as I will explain, because the SSA assumed that I would never become gainfully employed, it never informed me of the processes needed to report my work earnings, nor did they inform me that my benefits could end – even when I told the SSA that I was working.

How Did This Happen?

Let me back up and explain. When my father passed away in 2013, I started receiving survivors benefits from his social security earnings record. When my mom and I called the local SSA office, they told me that I would receive this money for the rest of my life, no strings attached. They never mentioned how work would affect my benefits; I guess they assumed I couldn’t work.

Fast-forward a few years. My survivors benefits, along with a few scholarships, afforded me the opportunity to complete my PhD. A few months before graduation, I received the offer from the Yang-Tan Institute. Once I accepted the offer, I quickly started figuring out how to work while still receiving the support and services I needed to live and work.

While my SSDI survivors benefits were one part of the package of government services I received, Medicaid funding for personal assistance services was the other part, and it was arguably more important than my survivors benefits.

Medicaid provides life-sustaining services and supports that most private insurers do not offer, such as funding for wheelchairs and attendant care.

Many disabled people, including myself, could never afford these vital supports on their own, even with a “good job,” so we essentially have two options: we can choose not to work so the support and services we need are never put in jeopardy, or we can hire a team of attorneys to create a series of trusts so we can never “touch” our work earnings in hopes that it will “save” our benefits. I chose the latter. I trusted my experts to save my benefits. Those experts were wrong.

Two years after I started my dream job, SSA put a price tag on my success – a $100,000 one. While my story may seem extraordinary, it is, rather ordinary. In fact, according to a study published by the SSA, tens of thousands of people with disabilities receive an overpayment notice annually.

What's an Overpayment?

In general, overpayments occur when the SSA claims that a beneficiary has received more money than they should have. Typically, the SSA requires the beneficiary to repay the extra funds, which can amount to tens of thousands of dollars or more. These overpayments occur for various reasons, including changes in income, assets, living situations and marital status.

Work-related overpayments for those receiving Social Security Disability Insurance (SSDI), like my own, occur when a beneficiary receives a monthly SSDI payment even though they are ineligible for that month’s payment. A beneficiary may be ineligible if their monthly earnings exceed a certain amount, known as the Substantial Gainful Activity (SGA) level. The first time a beneficiary earns over this level in a month, as I do as a full-time Cornell employee, a multi-year process begins. During this process, for any given month, the beneficiary is either eligible for their full monthly payment or they are not. If they receive this payment during a month when they are not eligible, that is an overpayment.

SSA has complex rules for calculating monthly payment amounts and eligibility, and these rules are quite different for those receiving SSDI versus those receiving Supplemental Security Insurance (SSI). It can be difficult or impossible for a recipient of either program to be aware that they have received an overpayment until they receive a notice from the SSA. In the case of SSI, a recipient is not allowed to maintain their SSI benefits and keep more than $2,000 in any bank account or similar asset. Due to this strict resource limit, even if it were possible to be aware of an overpayment, an SSI recipient might be unable to keep it in case the SSA wants it back. Further, many working people with disabilities live in poverty or experience financial instability and may need to spend their benefit on basic needs, regardless of the chance that some of it may be an overpayment. You can learn more about these rules in Disability Benefits at Work, a website published by Cornell ILR’s Yang-Tan Institute, through the institute’s Work Incentive Support Center.

Facts and Figures

Research published by the SSA shows that between 70% and 82% of working disabled SSDI beneficiaries receive a work-related overpayment, averaging about $9,282. Experts indicate, however, that these overpayments can be much higher, easily climbing to $50,000 or more. These work-related overpayments disrupt the lives of most working disabled beneficiaries. For example, research from Mathematica Policy Research shows that after receiving an overpayment notice, roughly 75% of working beneficiaries either reduce their hours or leave the workforce altogether. Overpayments also place significant stress on beneficiaries, with a large majority reporting being extremely concerned about their financial situation and losing access to their health care.

A report from the Office of the Inspector General at the SSA tells us that Overpayments also place a large financial strain on the government. In FY 2022, the SSA recovered over $4.7 billion in overpayments at an administrative cost of $0.06 for every dollar collected and had a $21.6 billion uncollected overpayment balance at the end of the year.

Why Do Overpayments Happen?

If overpayments are a major problem for both the federal government and individual beneficiaries, why do they happen so often? While researchers and policymakers have cited various reasons for these overpayments, including SSA’s backward and confusing policies and practices related to working beneficiaries, lack of communication regarding these policies to beneficiaries, and SSA’s own financial mismanagement, all these issues can be traced back to the fact that the SSA defines disability as the inability to work.

In other words, the SSA’s definition of disability considers a person disabled only if their impairments prevent them from participating in gainful employment. While this may have been true when programs such as SSDI and SSI were first created in the 1950s, advancements in society, technology and workplace accommodations have changed the playing field for people with disabilities – allowing most of us to work and live as independently as possible, if we so choose.

While these advances have changed the way that most of society views people with disabilities, the SSA has not changed how it defines disability – insisting that if a disabled person gets a job, they are somehow magically no longer disabled. This promotes an environment within the SSA that allows them to create and maintain policies and practices that lead directly to the majority of disabled beneficiaries choosing not to work out of fear of losing their benefits and the health care that often comes with them.

An example is the Substantial Gainful Activity threshold. This amount is so low that even those earning the minimum wage at 40 hours a week in most states would far exceed it. The SSA has put in place various “work incentives” to encourage disabled beneficiaries to find and maintain employment, and while these incentives can allow a disabled worker to earn at a higher level, the rules are so confusing that even if a worker understands the rules and reports their work incentives to the SSA correctly, the SSA may not process them properly. This has created a situation where many beneficiaries are afraid to even attempt to enter the labor market.

The way the SSA is handling work-related overpayments is yet another example of how the SSA’s backward notion of disability as the inability to work puts a price tag on work for people with disabilities. My experience demonstrates that when the SSA fails to accurately track a beneficiary’s benefits due to work earnings, they demand that the beneficiary pay back the difference, regardless of the amount. This request assumes that the beneficiary is no longer disabled and has somehow managed to build the financial capital to pay back the debt, which, in most cases, wasn’t of their own making. This absurd assumption, given that the majority of people with disabilities are in low-wage, low-skill jobs, is what drives many of us who receive overpayment notices out of the labor market and in need of even more government assistance.

What Can be Done About Overpayments?

As I have noted, overpayments are rarely the fault of individual beneficiaries but are instead the manifestation of the SSA’s insistence on linking disability with the inability to work. If policymakers truly want to create a more inclusive society for people with disabilities, they should consider the following:

• Passing legislation that immediately stops the collection of overpayments that are not the result of intentional fraud.
• Updating the SSA definition of disability to align it with current understandings and to ensure that people can work while retaining eligibility for disability-related government assistance programs
• Increasing the SSA, Medicaid and Medicare income and asset limits so that only the top 5% of earners would experience some restrictions on their benefits

Disabled people are capable and willing to work. However, here’s the hard truth: we have a system that won’t let us. Those who do find even a little success in the labor market are punished through work-related overpayments and denial of support and services that are available only through public health care. Disabled people deserve the right to work without fear of financial penalties and losing the support they need to live their lives. The only way to achieve this is to completely overhaul the social safety net from a system designed to trap people with disabilities in poverty and government dependence to one that helps disabled people live meaningful lives.

Image by FG Trade