When transportation service is needed to get to work, can it count as IRWE to reduce income below SGA (and keep benefits)?
There are times when a disabled individual, who is able to work part time, needs a service, such as a driver to get him to work where he can then do his job. If the individual has earnings that flirt with the SGA limit (substantial gainful activity), his income can jeopardize his disability benefits. This issue recently came up to me with regard to a pro bono consultation for a gentleman with Downs Syndrome. He was unable to drive because of his impairment, and this was not in dispute. His parent, to keep him working and active and earning, had to take him to and from work 3 days per week. Note that the parent/family member provided the service, not an independent business or individual. Apparently in the past, the SSA accepted these expenses as “Impairment Related Work Expenses”, which then allowed that cost to be deducted from his gross income, thereby reducing his gross income to an amount below SGA, and eliminating a cause of cancelled benefits due to too much income. In about 2015, the SSA no longer accepted this scenario as eligible for IRWE. I was asked if there was recourse. Here is what I have found:
When it is a family member, such “services” as providing transportation undergoes a more scrutinized review with what are likely additional requirements. Most notable, the disabled person must be actually paying for the service – so doing a favor and not charging him will not result in the disabled person getting the reduction. Charge him the going rate! And pay in real money, not in favors or barter. Pay by check, for a paper trail. Also, and this is the tricky part – there is a requirement that the family member has, essentially, given up other payable work, be it relinquishing a job to be home to provide this service OR, reduced hours to accommodate the transportation services. This requirement may be difficult, especially if the family member did not work prior to the work related service to care for the needs of the disabled person, such as a parent not working outside the home when he/she raised the child.
Is there a solution to that? Possibly: I’d suggest the family consider having a non-family member provide the transportation service – and better yet, an actual professional service where FICA payments (see below) are not an issue in terms of objective proof. It may be a win-win: The family member gains some likely well-needed break from this extra duty, the disabled person pays his own way in that regard, which can be mentally beneficial, buying services helps the local economy, AND, the disabled person can easily have his IRWE and not be in danger of losing his benefits due to exceeding SGA.
Below are the details that concern family members providing the service, vs. non-family member:
“3. Services by a family member
Whenever services (attendant care, transportation) are involved, document the file if the provider is a family member. The following documentation must also be included on an SSA-795 signed by the person with a disability and the attendant:
A statement of attendant’s duties and periods of time when performed;
Certification that services have been rendered and that payment in cash (including checks or other forms of money, but not payment in-kind) is being received from the person with a disability;
Evidence that payment was made (e.g., cancelled checks);
Information which establishes prior ongoing employment of the family member before the issue of attendant care became relevant to the person with a disability;
A statement that establishes how the family member suffers an economic loss by serving as attendant (e.g., identify the job that the attendant relinquished, or document the reduction of hours in other remunerative work, and record the date that work stopped or hours were reduced).
Where appropriate, ascertain whether or not these payments have been reported under the Federal Insurance Contributions Act (FICA). Such reporting helps establish the credibility of attendant care payments and protects the interest of the person rendering such services.”
For more information on IRWE (Impairment Related Work Expense) issues, contact Joy Disability for a consultation.