Social Security Act — Sections 216(i), 223(d), 1612(b) and 1614(a)
Regulation No. 4, Secs. 404.1571-404.1576, 404.1584
Regulation No. 16, Secs. 416.971-416.976, 416.1112, 416.1124
TN 6 (03-04)
DI 10520.001 Impairment-Related Work Expenses (IRWE)
A. Policy - Statutory Provision
The law provides that effective December 1, 1980 the cost of certain items and services that a person with a disability needs in order to work can be deducted from earnings in determinations of SGA, even though such items and services are also needed for normal daily activities. The cost of certain attendant care services, medical devices, equipment, prostheses, and similar items and services may be deducted. The costs of drugs and medical services are not deductible unless the drugs or services are necessary to control the disabling condition to enable the person to work. Expenses that are not directly related to the impairment(s) cannot be deducted as IRWE. Examples of non-deductible items include but are not limited to:
Routine annual physical examinations;
Routine optician services (unrelated to a disabling visual impairment);
Routine dental examinations; and
Health and life insurance premiums.
The amount of impairment-related work expenses (IRWE) that may be deducted is subject to reasonable limits. Deductions for needed items and services will be made only if the cost is paid by the person. This provision applies to both the disability insurance (DI) and Supplemental Security Income (SSI) programs. (See DI 10520.001E for IRWE paid before December 1, 1980.)
The law further provides that effective December 1, 1980, these same IRWE will be deducted from earned income for the purpose of determining an SSI recipient's countable earned income.
Effective December 1, 1990, IRWE will also be deducted from earned income for the purpose of determining a person’s initial eligibility for SSI. Prior to December 1, 1990, a person with a disability needed to establish initial eligibility by meeting the SSI income test before the IRWE could be considered. See DI 10520.015B. and SI 00820.540.
B. Policy - Applicability of Provisions to Title II and Title XVI
The instructions in this chapter deal with the deduction of IRWE from earnings in determinations of SGA for persons in both the title II and title XVI programs who are either filing for benefits or already on the benefit rolls. These instructions also deal with the deduction of IRWE from earnings for the purpose of determining the countable earned income of SSI recipients. However, the instructions which deal with the computation of the monthly SSI payment amount are covered in SI 02005.001.
C. Policy - Eligible Person
A person with a disability who, on or after December 1, 1980, is working and has an IRWE may be eligible for IRWE deductions if he or she:
meets the SSA definition of disability (DI 10105.065); and
because of a physical or mental impairment(s), requires assistance (services, medical devices, etc.) in order to work, whether or not such assistance is also needed to enable the person to carry out normal daily functions; and
pays the cost of such assistance, i.e., has not been, cannot be, and will not be, reimbursed by any source for the expense; and
makes payment in cash (including checks, credit cards, or other forms of money); payment in kind is not deductible; payment must be within reasonable limits (See DI 10520.025D); and
pays for the item or service in a month the person is working or in anticipation of work.
NOTE: For IRWE paid before December 1, 1980, see DI 10520.001E for policy and procedure.
D. Procedure - IRWE
Determine if the IRWE needs to be developed and verified using the policy in DI 10520.015. If the alleged IRWE needs to developed, address the following issues before applying the IRWE deduction:
Does the alleged IRWE correlate with the person’s disability (See DI 10520.020); and
Does the person need the item and/or service to work (See DI 10520.025A); and
Has the person paid for the item and/or service (See DI 10520.025C); and
When can the IRWE be deductible and how can they be distributed? (See DI 10520.030).
E. IRWE Paid Before December 1, 1980
Impairment-related work expenses (IRWE) paid before December 1, 1980, are deductible in determining countable earnings only to the extent that such expenses exceeded what would have been work-related expenses if the person did not have a disability (e.g., the amount by which the use of special transportation exceeded what the person, if not disabled, would have had to pay for regular transportation to and from work). Expenses paid before December 1, 1980, for items or services which the person required whether or not he or she worked would not be deductible.
A person with a disability could get to work only by cab which costs $7.00 a day for the round trip. The difference of $5.20 a day between the cost of normal transportation (bus at $1.80 a day) and the special transportation of $7.00 could be deducted from his wages to obtain countable earnings.
A person with a disability who managed a small book store required expensive medication to keep a serious heart condition under control. Since this medication was required whether or not he worked, its cost was not deductible in calculating his countable earnings.