82 FR 50214 - Social Security Disability Program Demonstration Project: Promoting Opportunity Demonstration (POD)

SOCIAL SECURITY ADMINISTRATION

Federal Register Volume 82, Issue 208 (October 30, 2017)

We are announcing a demonstration project for the Social Security disability program under title II of the Social Security Act (Act). Under this project, we will modify program rules applied to beneficiaries who work and receive title II disability benefits. We are required to conduct the Promoting Opportunity Demonstration (POD), in compliance with section 823 of the Bipartisan Budget Act (BBA) of 2015. In this project, we will test simplified work incentives and use a benefit offset based on earnings as an alternative to rules we currently apply to title II disability beneficiaries who work. Under the benefit offset, we will reduce title II disability benefits by $1 for every $2 that a beneficiary earns above a certain threshold. We will select beneficiaries and offer them the opportunity to volunteer for the project. When we make the selection, we will include beneficiaries who receive title II disability benefits only as well as beneficiaries who receive both title II disability benefits and Supplemental Security Income (SSI) based on disability or blindness under title XVI of the Act. We are modifying rules that apply to the title II program and the Ticket to Work program under title XI. We will continue to apply the usual SSI program rules for participants who receive SSI payments in addition to title II disability benefits.

[Federal Register Volume 82, Number 208 (Monday, October 30, 2017)]
[Notices]
[Pages 50214-50219]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-23521]


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SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2017-0032]


Social Security Disability Program Demonstration Project: 
Promoting Opportunity Demonstration (POD)

AGENCY: Social Security Administration.

ACTION: Notice.

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SUMMARY: We are announcing a demonstration project for the Social 
Security disability program under title II of the Social Security Act 
(Act). Under this project, we will modify program rules applied to 
beneficiaries who work and receive title II disability benefits. We are 
required to conduct the Promoting Opportunity Demonstration (POD), in 
compliance with section 823 of the Bipartisan Budget Act (BBA) of 2015.
    In this project, we will test simplified work incentives and use a 
benefit offset based on earnings as an alternative to rules we 
currently apply to title II disability beneficiaries who work. Under 
the benefit offset, we will reduce title II disability benefits by $1 
for every $2 that a beneficiary earns above a certain threshold.
    We will select beneficiaries and offer them the opportunity to 
volunteer for the project. When we make the selection, we will include 
beneficiaries who receive title II disability benefits only as well as 
beneficiaries who receive both title II disability benefits and 
Supplemental Security Income (SSI) based on disability or blindness 
under title XVI of the Act. We are modifying rules that apply to the 
title II program and the Ticket to Work program under title XI. We will 
continue to apply the usual SSI program rules for participants who 
receive SSI payments in addition to title II disability benefits.

DATES: We plan to begin this project in November 2017 and end it in 
June 2021.

FOR FURTHER INFORMATION CONTACT: Jeffrey Hemmeter, Office of Retirement 
and Disability Policy, Social Security Administration, 6401 Security 
Boulevard, Baltimore, MD 21235, (410) 597-1815.

SUPPLEMENTARY INFORMATION: 

[[Page 50215]]

Background

    We are required to conduct this demonstration under Social Security 
Act section 234(f).\1\
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    \1\ Section 823 of the Bipartisan Budget Act of 2015, Public Law 
114-74, added this requirement.
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    In this section, we broadly outline our usual rules for paying 
disability benefits, how those benefits may terminate, and the work 
incentives that affect payments. Then, we discuss the modified rules we 
will apply under the demonstration project.

Who may receive disability benefits?

    Under title II of the Act, we pay the following benefits to persons 
who meet the Act's definition of disability:
     Disability insurance benefits for a worker insured under 
the Act;
     Widow's and widower's insurance benefits based on 
disability for a widow, widower, or surviving divorced spouse of an 
insured worker; and
     Childhood disability benefits for a child of an insured 
worker who is entitled to retirement or disability benefits or has 
died.
    In the rest of this notice, we refer to these benefits collectively 
as Social Security Disability Insurance (SSDI) benefits and refer to 
the beneficiaries who receive them as SSDI beneficiaries.
    Under title XVI of the Act, we pay SSI to persons who are aged, 
blind, or disabled, and who also have limited income and resources. An 
SSDI beneficiary with limited income and resources may qualify for SSI 
payments.
    A person must meet the definition of disability under title II of 
the Act in order to be eligible for SSDI benefits. A person is disabled 
under title II if the person has a physical or mental impairment or 
combination of impairments that has lasted or is expected to last for 
at least 12 months or can be expected to result in death and that 
prevents the person from doing any substantial gainful activity 
(SGA).\2\ This definition also applies under title XVI of the Act for 
persons age 18 or older who receive payments based on disability.\3\
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    \2\ Section 223(d)(1)(A) of the Act; 20 CFR 404.1505(a).
    \3\ Section 1614(a)(3)(A) of the Act; 20 CFR 416.905(a).
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Continuing Disability Reviews

    We periodically reevaluate a disability beneficiary's impairment(s) 
to determine whether the person continues to be under a disability.\4\ 
We call this evaluation a continuing disability review (CDR). We 
conduct CDRs at regularly scheduled intervals. We may begin a CDR at a 
time other than a regular interval if circumstances warrant. There are 
two main types of CDRs: (1) Medical CDRs, in which we examine medical 
improvement, if any, and (2) work CDRs, in which we examine earnings. 
If we determine in a CDR that the individual is no longer under a 
disability, we will stop benefits in most cases.
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    \4\ Section 221(i), (m) of the Act; 20 CFR 404.1589, 404.1590, 
and 404.1594.
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How do we help disability beneficiaries to return to work?

    We offer certain work incentives to encourage disability 
beneficiaries to attempt to work. We also administer the Ticket to Work 
program and other employment support programs to help disability 
beneficiaries become as self-sufficient as possible through work and to 
promote their economic independence. Under certain provisions of the 
Act, such as the title II provision for a trial work period, 
beneficiaries may test their ability to work while keeping their cash 
and medical benefits.

The Trial Work Period

    We provide a trial work period (TWP) that allows SSDI beneficiaries 
\5\ to test their ability to work for at least nine months and not have 
that work considered for disability purposes during that period.\6\ 
During this period, beneficiaries continue to receive full SSDI 
benefits, regardless of how much money they earn, as long as they 
report the work activity and continue to have a disabling impairment. 
The TWP ends when a beneficiary has completed nine trial work months 
(which do not have to be consecutive) within a rolling 60-month period. 
(The TWP may end earlier if we determine that the beneficiary's 
disability ended based on medical factors.\7\) We count as a trial work 
month any month in which a beneficiary's gross earnings are above a 
specified amount ($840 a month in 2017) or in which the beneficiary 
works more than 80 hours in self-employment.\8\
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    \5\ The SSI program under title XVI of the Act does not provide 
a TWP. The performance of SGA by a recipient of SSI payments based 
on disability or blindness does not affect the recipient's 
disability or blindness status under the SSI program. Section 1619 
of the Act; 20 CFR 416.260-416.269.
    \6\ Sections 222(c) and 223(d)(4) of the Act; 20 CFR 404.1592.
    \7\ Id.
    \8\ 20 CFR 404.1592(b).
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What happens if a beneficiary works after the TWP?

    If a beneficiary works after the TWP ends, we review the 
beneficiary's work and earnings to decide if the work is SGA. Work is 
``substantial'' if it involves doing significant physical or mental 
activities. Work activity may be ``substantial'' even if it is 
performed on a part-time basis. Work activity is ``gainful'' if it is 
performed for pay or profit or is the kind of work usually performed 
for pay or profit, whether or not a profit is realized.\9\
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    \9\ 20 CFR 404.1572.
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    In deciding whether work is SGA, we consider the nature of the 
person's job duties, the skills and experience the person needs to do 
the job, and how much the person actually earned.\10\ Usually, we 
consider a person's work to be substantial and gainful if monthly 
earnings, after allowable deductions, average more than the monthly SGA 
amount (in 2017, $1,170 a month for a person who is not blind, or 
$1,950 a month for a person who is blind). If the person is self-
employed, we may give more consideration to the kind and value of the 
work, including the person's part in the management of the business, 
than to the person's income alone.\11\
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    \10\ 20 CFR 404.1571-404.1576.
    \11\ 20 CFR 404.1575.
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    When we decide whether work is SGA and figure earnings, we deduct 
the reasonable costs of certain ``impairment-related work expenses'' 
(IRWEs), that is, items and services that enable a person to work.\12\ 
We will decide that an SSDI beneficiary's disability has ended in the 
first month the person performs SGA after completion of the TWP.\13\ We 
pay benefits for the month disability ended and the following two 
months, no matter how much the beneficiary earns.\14\ We call this 
three-month period the ``grace period.'' \15\
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    \12\ Section 223(d)(4)(A) of the Act; 20 CFR 404.1576.
    \13\ 20 CFR 404.1592a(a)(1) and 404.1594(d)(5).
    \14\ 20 CFR 404.401a and 404.1592a(a)(2).
    \15\ Program Operations Manual System, DI 13010.210.
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The Reentitlement Period

    Immediately after an SSDI beneficiary completes the TWP, the 
reentitlement period begins. The reentitlement period is also called 
the extended period of eligibility. The reentitlement period typically 
lasts for 36 months, but it may end earlier if we determine that the 
beneficiary ceases to have a disabling impairment for medical 
reasons.\16\ The reentitlement period allows an SSDI beneficiary with a 
disabling impairment an additional period to test the ability to 
work.\17\ If the beneficiary performs SGA during the reentitlement 
period, we will determine that the beneficiary's disability has ended, 
and we will stop

[[Page 50216]]

benefits, subject to the grace period. After the grace period, we will 
not pay benefits to the disability beneficiary or anyone receiving 
benefits on the earnings record for any month during the reentitlement 
period in which the disability beneficiary performs SGA.\18\ However, 
if the beneficiary does not perform SGA in a subsequent month in the 
reentitlement period, we will pay benefits again. The beneficiary does 
not need to file a new application for the benefits to start again.
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    \16\ 20 CFR 404.1592a(b).
    \17\ Sections 202(d)(1), (d)(6), (e)(1), and (f)(1) and 
223(a)(1) of the Act; 20 CFR 404.316(d), 404.337(d), 404.352(e), 
404.401a, and 404.1592a(a).
    \18\ Section 223(e) of the Act; 20 CFR 404.401a and 
404.1592a(a)(2).
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Expedited Reinstatement

    Expedited reinstatement is an employment support available under 
both the SSDI and SSI programs.\19\ We provide expedited reinstatement 
for 60 months after we terminate entitlement to disability benefits due 
to work activity.\20\ Rather than filing a new application for a new 
period of entitlement, individuals can, during this 60-month period, 
request reinstatement of their prior entitlement to disability 
benefits. An individual may receive up to six consecutive months of 
provisional cash benefits and Medicare while we make a determination 
about whether the individual's prior entitlement will be 
reinstated.\21\ The provisional cash benefits may be equal to the last 
monthly benefit payable during the prior entitlement. After we approve 
reinstatement, the initial reinstatement period (IRP) begins.\22\ 
During the IRP, the TWP and reentitlement provisions discussed above do 
not apply; if a beneficiary performs SGA in a month during the IRP, we 
will not pay benefits for that month. The IRP ends after a beneficiary 
has 24 months of payable benefits; the months do not have to be 
consecutive. At that point, the TWP and reentitlement provisions 
discussed above apply to the beneficiary.
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    \19\ 20 CFR 404.1592c.
    \20\ Section 223(i) of the Act; 20 CFR 404.1592b-404.1592f.
    \21\ Section 223(i)(7) of the Act; 20 CFR 404.1592e.
    \22\ Section 223(i)(6) of the Act; 20 CFR 404.1592f.
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Ticket to Work Program

    In addition to the work incentives policies discussed above, we 
also administer the Ticket to Work program, which can help disability 
beneficiaries access employment services, vocational rehabilitation 
services, and other support services.\23\ A beneficiary participates in 
the program by assigning a ticket to a qualified provider, which may be 
an employment network or a State vocational rehabilitation agency.\24\ 
We pay these providers for certain outcomes achieved by the 
beneficiary.\25\ We may pay an outcome payment for each month for which 
SSDI benefits and Federal SSI payments are not payable to the 
beneficiary because of the performance of SGA or by reason of earnings 
from work activity.\26\ If the beneficiary is an SSDI-only or 
concurrent SSDI/SSI beneficiary, we may make up to 36 outcome 
payments.\27\
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    \23\ Section 1148 of the Act; 20 CFR part 411.
    \24\ Section 1148(c) and (f) of the Act; 20 CFR 411.300-411.435.
    \25\ Section 1148(h) of the Act; 20 CFR part 411, subpart H.
    \26\ Section 1148(h) of the Act; 20 CFR 411.500, 411.525, and 
411.575.
    \27\ 20 CFR 411.500 and 411.525.
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The Promoting Opportunity Demonstration (POD)

Description of the POD

    Under the POD, we will modify title II disability program rules 
that we currently apply to SSDI beneficiaries who work. We will test 
alternate rules to determine their effectiveness in encouraging SSDI 
beneficiaries to return to work or increase their earnings. We will 
test simplified work incentives and use a monthly benefit offset based 
on earnings. Under the benefit offset, we will reduce SSDI benefits by 
$1 for every $2 of a beneficiary's earnings that are above a certain 
threshold. The POD threshold is equal to the greater of (1) the 
applicable monthly TWP amount for the calendar year or (2) itemized 
IRWEs up to the SGA amount for the calendar year.
    We have contracted with Abt Associates to implement the POD and 
Mathematica Policy Research to conduct evaluation activities. We will 
evaluate the impact of the benefit offset on work activity, earnings, 
and continued receipt of cash benefits.

Where will we conduct the POD?

    We expect to conduct this project in eight sites across the 
country:
     Alabama (all counties);
     California (Los Angeles, Orange, and San Diego counties);
     Connecticut (all counties);
     Maryland (Anne Arundel, Baltimore, Harford, Howard, 
Montgomery, and Prince George's counties; Baltimore City);
     Michigan (Barry, Berrien, Branch, Calhoun, Cass, 
Kalamazoo, Kent, St. Joseph, and Van Buren counties);
     Nebraska (Adams, Buffalo, Douglas, Hall, Lancaster, and 
Sarpy counties);
     Texas (Bexar, Dallas, and Tarrant counties); and
     Vermont (all counties).
    Abt Associates is subcontracting with the State vocational 
rehabilitation agencies or Work Incentive Planning and Assistance 
providers in each site to work directly with the beneficiaries in this 
project.

Who is eligible to participate in the POD?

    To be eligible to participate in the project, a beneficiary must:
     Be at least age 20 and be under age 62 throughout the 
project;
     Be entitled to title II benefits based on disability as 
the insured worker \28\ only;
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    \28\ Individuals receiving widow's or widower's insurance 
benefits or childhood disability benefits based on someone else's 
status as an insured worker at the time of enrollment are not 
eligible.
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     Receive title II disability cash benefits, unless we are 
not paying cash benefits because the beneficiary is engaging in SGA 
after the grace period and during the reentitlement period;
     Reside in one of the eight sites for the project, 
according to our records; and
     Not be a prior or current treatment or control group 
participant in any of our other demonstration projects.

How will we select participants and assign them to control or treatment 
groups?

    We will select potential participants for the POD from a pool of 
beneficiaries who meet the requirements for participation described 
above. We expect to recruit about 15,000 beneficiaries to volunteer to 
participate in the POD. We will randomly assign the beneficiaries who 
have agreed to participate in the POD to a control group or one of two 
treatment groups, as described below.
     Control Group--We will assign approximately 5,000 SSDI 
beneficiaries to this group, which will continue to be subject to our 
usual program rules. We will not test any alternate rules with this 
group.
     Treatment Group 1--We will assign approximately 5,000 SSDI 
beneficiaries to this group, which will be eligible for the benefit 
offset. For any month the beneficiary's SSDI benefits are reduced to 
zero under the offset, benefits are suspended for that month. The 
beneficiary remains eligible for benefits for months that the offset 
does not reduce benefits to zero.
     Treatment Group 2--We will assign approximately 5,000 SSDI 
beneficiaries to this group, which will be eligible for the benefit 
offset. If a beneficiary in this group has the SSDI benefit reduced to 
zero under the offset for 12 consecutive

[[Page 50217]]

months, we will terminate the beneficiary's entitlement to SSDI.

How will we conduct the POD?

    The evaluation contractor, Mathematica Policy Research, will 
conduct outreach through mailings and phone calls to recruit and enroll 
beneficiaries into the POD, and randomly assign participants into the 
control and treatment groups. Beneficiaries we recruit and who wish to 
participate will sign a consent form to indicate their agreement to 
participate before being randomly assigned to one of the three groups 
described above. All enrolled beneficiaries can withdraw from the 
project at any time. Beneficiaries randomly assigned to the control 
group will receive a notice informing them of their assignment and that 
the usual program rules apply. Beneficiaries randomly assigned to the 
treatment groups will receive a notice informing them of their 
assignment and that alternate program rules will apply for earnings. 
The notice will provide contact information for Abt Associates, which 
will be beneficiaries' central point of contact for the POD.
    The notice will also inform beneficiaries of the POD-related 
benefits counseling available to all treatment group members. Each site 
will have benefits counselors dedicated to the project who can help 
beneficiaries understand the alternate rules under the POD and how the 
offset will affect their SSDI benefit.
    Participation in the POD is voluntary, and a beneficiary may 
withdraw the consent to participate in the POD at any time in writing. 
A beneficiary who wishes to withdraw consent will inform Abt Associates 
in writing and be offered counseling on withdrawing from the 
demonstration and returning to usual rules. A beneficiary in a 
treatment group who withdraws consent will no longer be eligible for 
the alternate program rules or any project services available under the 
POD, but will have the option to continue to participate in evaluation 
activities, such as follow-up surveys. If a beneficiary chooses not to 
participate in the evaluation activities, we will continue to track the 
beneficiary for the project evaluation using program data. We will 
apply our usual program rules to the beneficiary beginning with the 
month that withdrawal from the project becomes effective. We will apply 
our usual title II disability program rules for all participants after 
the end of the project, beginning July 2021.

What provisions of the Act and regulations are we waiving to provide 
alternate rules under the POD?

Alternate Title II Program Rules
    The following alternate program rules will apply to an SSDI 
beneficiary assigned to a treatment group during participation in the 
POD:
     Eligibility for the benefit offset will begin after random 
assignment to a treatment group and end at the close of the project in 
June 2021;
     Payment of SSDI benefits will be subject to reduction, 
potentially to zero, under the benefit offset;
     Payment of benefits to any other person entitled to 
benefits on the earnings record of the SSDI beneficiary will continue 
for any month for which the beneficiary's SSDI benefit is partially 
reduced under the benefit offset and will stop for months for which the 
SSDI benefit is reduced to zero under the offset;
     For months that SSDI benefits are reduced to zero under 
the offset, benefits are suspended for participants in both treatment 
groups. If the participants' earnings decrease in a subsequent month 
such that the offset does not reduce the SSDI benefit to zero, the 
beneficiary will again receive a benefit, subject to the offset. If a 
participant in treatment group 2 has the SSDI benefit reduced to zero 
for 12 consecutive months, we will terminate entitlement to benefits;
     The TWP will not apply to the participant;
     The reentitlement period will not apply to the 
participant;
     If a participant has entitlement reinstated under 
expedited reinstatement, the IRP will not apply to the participant;
     If a participant was eligible for Medicare Part A coverage 
because of entitlement to SSDI and the SSDI entitlement terminates as a 
result of the POD's benefit offset, the participant will remain 
eligible for Medicare Part A coverage for 93 additional months provided 
that the person continues to have the same disabling impairment(s) that 
provided the basis for the prior SSDI entitlement and meets the other 
SSDI entitlement requirements;
     No work CDRs will be initiated or completed during the POD 
participation;
     We will continue to pay outcome payments to qualified 
providers under the Ticket to Work program for participants who earn 
above SGA, whether or not their SSDI benefit is reduced to zero; and
     Our usual program rules will apply beginning with the 
month after participation in the POD ends.
    Applying these alternate rules involves waiving or altering certain 
provisions included in sections 222(c); 223(a)(1), (d)(4), (e), and 
(i); and 1148(h) of the Act and 20 CFR 404.316(d), 404.325, 404.401a, 
404.1571 through 404.1576, 404.1590, 404.1592, 404.1592a, 404.1592f, 
404.1594, 411.500(b)-(e), 411.525(a)(1)(i), and 411.575(b)(1)(i)(A).

When will a participant in one of the treatment groups be eligible for 
the benefit offset?

    A beneficiary who is in a treatment group will be eligible for the 
benefit offset after random assignment and should begin to report 
earnings to Abt Associates the month after random assignment. Thus, if 
random assignment is in November, the beneficiary should report 
November earnings and IRWEs in December, and the benefit offset, if 
any, will begin with the December benefit, which is paid in January. 
Participants should report earnings and IRWEs information to the POD 
through June 2021.

How will we apply the benefit offset?

    We will apply the benefit offset on a monthly basis to reduce SSDI 
benefits based on a beneficiary's report of monthly earnings and IRWEs. 
Participants who report their earnings and IRWEs information for the 
prior month on time in the current month will have the benefit offset 
calculated into the following month's benefit. For example, for a 
participant who reports April 2018 earnings and IRWEs in May 2018, the 
offset will be calculated in the May 2018 benefit, which is paid in 
June 2018.
    In the example below, we show how we will calculate the amount by 
which monthly SSDI benefit payments will be reduced under the offset 
for a beneficiary whose earnings exceed the POD threshold. In the 
example, we use the POD threshold that would apply in 2017.
    Example: A beneficiary reports monthly earnings of $1,040. The POD 
threshold is $840. The reported monthly earnings exceed the threshold 
by $200. We will reduce the beneficiary's SSDI benefit payment by $100. 
The calculations for this example are as follows:
    First, we calculate the monthly earnings that exceed the POD 
threshold.

$1,040 (monthly earnings report)
-$840 (2017 POD threshold)
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$200
 


[[Page 50218]]

    Second, we calculate the $1 for $2 benefit offset amount by 
dividing the amount of earnings that exceeds the POD threshold by 2.
    $200 / 2 = $100 (monthly $1 for $2 benefit offset amount)
    For the purposes of the POD, we will round the monthly benefit 
offset amount resulting from the calculations down to the nearest dime.
    We consider monthly IRWEs in the calculation only when the total is 
greater than the POD threshold. If the total monthly amount of itemized 
IRWEs is greater than the POD threshold, we will use the total monthly 
amount of itemized IRWEs as the monthly POD threshold for the offset. 
However, if the total monthly amount of itemized IRWEs equals or 
exceeds the applicable SGA amount, we will use the SGA amount as the 
monthly POD threshold for the offset.
    In the example below, we show how we will calculate the amount by 
which monthly SSDI benefit payments will be reduced under the offset 
for a beneficiary whose earnings and itemized IRWEs exceed the POD 
threshold. In the example, we use the POD threshold that would apply in 
2017.
    Example: A beneficiary reports monthly earnings of $1,040. The 
beneficiary also reports monthly itemized IRWEs of $940 and all are 
approved. Since the total monthly amount of itemized IRWEs is greater 
than $840, we use the IRWEs amount as the POD threshold. The reported 
monthly earnings exceed the threshold by $100. We will reduce the 
beneficiary's SSDI benefit payment by $50. The calculations for this 
example are as follows:
    First, we calculate the monthly earnings that exceed the POD 
threshold.

$1,040 (monthly earnings report)
-$940 (POD threshold is equal to the total monthly itemized IRWEs)
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$100
 

    Second, we calculate the $1 for $2 benefit offset amount by 
dividing the amount of earnings that exceeds the POD threshold by 2.
    $100 / 2 = $50 (monthly $1 for $2 benefit offset amount)
    For the purposes of the POD, we will round the monthly benefit 
offset amount resulting from the calculations down to the nearest dime.

What happens if a beneficiary does not report earnings on a monthly 
basis?

    It is very important that beneficiaries in the treatment groups 
report earnings and IRWEs. If a beneficiary reports earnings for a 
month, but does not continue to report monthly, the prior reported 
earnings will carry forward for subsequent months until the beneficiary 
reports earnings again, or until the end of the project. If the 
beneficiary is late in reporting earnings for a month, we will make 
appropriate adjustments to future benefit payments if we determine that 
we paid the beneficiary too much or too little in benefits under the 
offset for the months when we carried over prior earnings. We will send 
the beneficiary a written notice of our determination that will provide 
appeal rights.
    We will perform an end-of-year reconciliation after the close of 
each calendar year. We will determine the actual amount of the 
beneficiary's earnings for each month in the calendar year to decide if 
the person was paid more or less in benefits than was due under the 
offset. We will make appropriate adjustments to future benefit payments 
if we determine that we paid the beneficiary too much or too little in 
benefits under the offset. We will send the beneficiary a written 
notice of our determination that will provide appeal rights.

What happens to beneficiaries whose benefit is reduced to zero for 12 
consecutive months?

    When a beneficiary's earnings are high enough that the offset 
amount equals or exceeds the beneficiary's SSDI monthly benefit 
payment, the beneficiary will not receive a benefit payment for that 
month. That is, the SSDI benefit is reduced to zero under the offset, 
and the benefit is suspended for that month. Beneficiaries in treatment 
group 2 only will have entitlement terminated after their benefit is 
reduced to zero (that is, suspended) for 12 consecutive months.

What options do we provide to beneficiaries whose entitlement to 
disability benefits terminates during the POD due to work activity?

    Participants whose entitlement to disability benefits terminates 
due to work activity during the POD can apply for expedited 
reinstatement, as under current rules. Participants can request 
expedited reinstatement of their prior entitlement for a 60-month 
period. We will apply the same criteria used under current rules to 
determine whether a beneficiary meets the requirements for 
reinstatement. As under current rules, an individual may receive up to 
six consecutive months of provisional cash benefits while we make a 
determination.
    Participants in treatment group 2 who are reinstated will remain in 
the demonstration. They will continue in the POD treatment group 2 and 
will be subject to the applicable alternate rules for that treatment 
group. Under current rules, after we reinstate entitlement through 
expedited reinstatement, the IRP begins. Under POD rules, the IRP will 
not apply. See the following section for further details on the IRP.
    A participant whose entitlement is terminated under the POD will 
remain in this terminated status (unless the person is reinstated as 
discussed above), even if the person withdraws from the project.

What happens to the IRP of a beneficiary in the POD?

    The IRP will not apply to beneficiaries in treatment groups during 
POD participation. When a beneficiary in a treatment group stops 
participating in the POD, the status of the IRP will be the same as 
when the beneficiary began participating in the POD. That means that if 
a beneficiary enters the POD during the beneficiary's IRP, the IRP will 
pick up at the same point after the beneficiary's participation in the 
POD ends and the beneficiary returns to our usual rules. If a 
beneficiary in treatment group 2 has entitlement terminated because of 
the offset but then has entitlement reinstated under expedited 
reinstatement, the beneficiary will return to participation in 
treatment group 2. When the beneficiary's participation ends and the 
beneficiary returns to usual rules, the beneficiary will begin the IRP.

What happens to the POD participation for beneficiaries whose 
entitlement to disability benefits terminates for any reason?

    Participants must maintain all SSDI eligibility requirements to 
continue receiving SSDI. For example, participants will still be 
subject to medical CDRs, which could result in a termination of 
entitlement on medical grounds. If a participant's entitlement 
terminates for any reason and we subsequently approve reinstatement, 
the participant will return to the same treatment group the participant 
was in before termination until the participant withdraws from the 
project or the project ends.

What happens to the payment of benefits to other persons entitled on 
the earnings record of a beneficiary whose SSDI benefit is subject to 
the offset?

    If any other person is entitled to benefits on the earnings record 
of a beneficiary whose SSDI benefit is subject to the offset, we will 
pay the other person the full amount of monthly cash benefits that the 
person is

[[Page 50219]]

otherwise due for any month for which the beneficiary is eligible for 
payment of a reduced SSDI benefit under the offset. However, we will 
not pay benefits to the other person for any month for which the 
beneficiary's SSDI benefit is reduced to zero under the offset. For 
example, a beneficiary in a POD treatment group could have earnings 
above SGA, and if the earnings do not result in full offset, other 
persons entitled on the beneficiary's record will continue to receive 
their full amount of benefits for as long as the beneficiary is 
participating in the POD. By contrast, under current rules, if a 
beneficiary has earnings above SGA during the 36-month reentitlement 
period following the TWP, other persons entitled on the beneficiary's 
record would not continue to receive benefits.\29\
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    \29\ 20 CFR 404.1592a.
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What happens to the TWP of a beneficiary in the POD?

    The TWP will not apply to beneficiaries in treatment groups during 
their participation in the POD. A month during which the participant 
works and earns above the TWP amount will not be considered a trial 
work month for any purpose. Once the beneficiary's participation in the 
POD ends, the beneficiary will, from that point forward, be subject to 
our usual rules, but the work and earnings accumulated during the POD 
participation will not be counted toward a TWP. Upon return to our 
usual rules, the beneficiary's TWP status will be equal to the TWP 
status before participating in the POD. We will, however, count the 
period of the POD participation as part of the rolling 60-month TWP 
window. For example, if a beneficiary in a treatment group has 
completed four trial work months before enrolling in the POD, the first 
month the beneficiary earns above the TWP amount after the 
beneficiary's participation in the POD ends will be the beneficiary's 
fifth trial work month.

What happens to the reentitlement period of a beneficiary in the POD?

    The reentitlement period will not apply to beneficiaries in 
treatment groups during POD participation. There is also no 
reentitlement-related assessment to determine whether a beneficiary's 
disability ended during a reentitlement period because the person 
performed SGA. Once the beneficiary's participation in the POD ends, 
the beneficiary will, from that point forward, be subject to our usual 
rules. Upon return to usual rules, the beneficiary's reentitlement 
status will be equal to the reentitlement status before participating 
in the POD. No work or earnings during POD participation will be 
considered in determining the reentitlement period upon return to usual 
rules.

Will we conduct work continuing disability reviews during the POD?

    We will not initiate work CDRs for participants in the POD 
treatment groups while they are participating in the POD. If a 
participant in a POD treatment group has a work CDR in progress when 
POD participation begins, we will not complete the work CDR while the 
person is participating in the POD.

Will the alternate rules under the POD affect a beneficiary's Medicare 
coverage?

    A beneficiary who is under age 65 and who has been entitled to SSDI 
benefits for 24 months is entitled to Hospital Insurance (Medicare Part 
A) under the Medicare program.\30\ Entitlement to Medicare coverage 
generally continues as long as a beneficiary's entitlement to SSDI 
benefits continues. However, a beneficiary whose entitlement to SSDI 
benefits terminates due to the performance of SGA may be entitled to 
extended Medicare coverage for a period of at least 93 months following 
the end of the TWP, provided that disability continues. Under the Act, 
the period of extended Medicare coverage is determined as if the 
beneficiary had a 15-month reentitlement period following the end of 
the TWP.\31\
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    \30\ Section 226(b) of the Act; 42 CFR 406.12.
    \31\ Id.
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    Section 234(f)(2)(D) of the Act, created by section 823 of the BBA 
of 2015, provides special rules on Medicare Part A coverage for some 
POD participants. If a participant is entitled to Medicare Part A 
coverage because of entitlement to SSDI benefits and the SSDI 
entitlement is terminated as a result of the POD's benefit offset, the 
participant is entitled to extended Medicare coverage for a period of 
93 months following the SSDI entitlement termination, as long as the 
participant continues to have the same disabling impairment(s) that 
provided the basis for the prior SSDI entitlement and the participant 
meets the other SSDI entitlement requirements.

What are the alternate rules under the Ticket to Work program?

    We will apply an alternate rule for paying outcome payments to a 
qualified service provider that has been assigned a ticket by an SSDI-
only or concurrent SSDI/SSI beneficiary in a POD treatment group. As 
noted above, under our usual rules, we may pay outcome payments to 
service providers for months in which SSDI benefits are not payable to 
a beneficiary because earnings are at or above the SGA level. Under the 
POD's offset, however, a beneficiary's earnings may be at or above the 
SGA level and yet still not be high enough to reduce the SSDI benefit 
to zero. Thus, applying our normal Ticket to Work program rules could 
unduly burden these service providers, since they would not receive the 
outcome payments that they would otherwise be eligible for if the 
beneficiary was not participating in the POD. Therefore, for the POD, 
we will pay an outcome payment to the provider for each month the 
participant earns above SGA, whether or not the SSDI benefit is reduced 
to zero. This process will occur only during a beneficiary's POD 
participation period.
    We will apply our usual rules for paying outcome payments beginning 
with the first month after a beneficiary's POD participation period 
ends. We will continue to limit the number of months for which outcome 
payments may be made based on the same ticket to a maximum of 36 
months. We will count any month for which we pay an outcome payment 
under the alternate rule or our usual rule toward this 36-month limit.

What is our authority for conducting the POD?

    Section 234 of the Act authorizes experiments and demonstration 
projects designed to promote attachment to the labor force, including 
projects that test alternative methods of treating work activity of 
SSDI beneficiaries and that involve the waiver of certain program 
rules. Section 234(f) of the Act, added by section 823 of the BBA of 
2015, specifically requires that we conduct the POD. We are conducting 
the POD consistent with the requirements in section 234(e) of the Act 
that participation in a demonstration project must be voluntary and 
based on informed written consent, and that the voluntary agreement to 
participate may be withdrawn by the volunteer at any time.

    Authority:  Section 234 of the Act.

Nancy A. Berryhill,
Acting Commissioner of Social Security.
[FR Doc. 2017-23521 Filed 10-27-17; 8:45 am]
BILLING CODE 4191-02-P