Effective Dates: 12/19/2023 - Present Previous | Next

TN 32 (12-23)

HI 03020.030 Earned Income Exclusions

A. Background

While it is necessary to ascertain all sources and amounts of an individual’s earned income, we do not count all of an individual’s earned income to determine subsidy eligibility. There are earned income exclusions.

B. Policy - earned income we do not count

We apply the following income exclusions to earned income in the order listed to determine countable earned income. We never reduce the individual’s earned income below zero or apply any unused earned income exclusion to unearned income. We do not count as earned income the following:

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    Any refund of Federal income taxes received under section 32 of the Internal Revenue Code (relating to the earned income tax credit), and any payment received from an employer under section 3507 of the Internal Revenue Code related to advance payments of the earned income tax credit (SI 00830.060);

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    The first $30 per calendar quarter of earned income which is received infrequently or irregularly (SI 00810.410);

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    Any portion of the $20 per month general income exclusion which has not been excluded from the unearned income of the individual (or of the combined unearned income of the individual and living-with spouse) received in that same month (SI 00810.420);

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    $65 per month of the individual’s earned income (or the combined earned income of the individual and living-with spouse) received in that same month (SI 00820.520);

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    Earned income of a non-blind individual used to pay impairment-related work expenses (IRWE) described in SI 00820.540, if the individual receives Title II DIB that is not based on blindness and is under age 65 (See second bullet below for earned income of a blind individual.)

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    One-half of the remaining earned income that the individual (or the individual and living-with spouse) receives in that same month (SI 00820.520); and

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    Earned income of a blind individual used to meet any blind-work expenses (BWE) described in SI 00820.535 that are reasonably attributable to the earning of the income if the individual receives Title II DIB based on blindness and is under age 65.

C. Policy - how we determine excluded work expenses

For working Title II DIB beneficiaries who allege paying for disability related expenses that enable them to work, the MAPS system automatically excludes 16.3% of gross earnings for non-blind Title II DIB beneficiaries and 25% of gross earning for blind Title II DIB beneficiaries. We exclude the actual amount of IRWE or BWE if more advantageous to the individual. Determine excluded work expenses as follows:

1. Impairment-Related Work Expenses (IRWE)

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    To qualify for this exclusion, the individual must be receiving Title II disability benefits not-based on blindness and must be under age 65. We consider that an individual attains age 65 on the day before their 65th birthday. We stop applying this exclusion beginning the month the individual attains age 65.

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    Based on the average IRWE exclusion amount for SSI disabled individuals, we assume that the value of any alleged IRWE is equal to 16.3% of the individual’s total earned income (See SI 00820.540).

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    If the individual alleges impairment-related work expenses and meets all of the requirements for this exclusion, the system will automatically exclude 16.3% of gross earnings.

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    The individual may establish that the actual expenses are greater than 16.3% of gross earned income, if excluding impairment-related work expenses greater than 16.3% would favorably affect subsidy eligibility.

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    The 16.3% exclusion of impairment-related work expenses also applies to the earnings of the individual’s living-with spouse if the spouse receives Title II disability benefits (not based on blindness) and is under age 65 (See the Blind Work Expenses (BWE) HI 03020.030C.2., if the spouse receives Title II disability benefits based on blindness).

2. Blind Work Expenses (BWE)

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    To qualify for this exclusion, the individual must be receiving Title II disability benefits based on blindness and must be under age 65. We consider that an individual attains age 65 on the day before their 65th birthday. We stop applying the exclusion beginning the month the individual attains age 65.

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    Based on the average BWE exclusion amount for SSI blind individuals, we assume that the value of any alleged BWE is equal to 25% of the individual’s total earned income (See SI 00820.535).

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    If the individual alleges blind work expenses and meets all of the requirements for the exclusion, the system will automatically exclude 25% of gross earnings.

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    The individual may establish that the actual expenses are greater than 25% of gross earned income, if excluding blind work expenses greater than 25% of earned income would favorably affect subsidy eligibility.

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    The 25% exclusion of blind work expenses also applies to the earnings of the individual’s living-with spouse if the spouse receives Title II disability benefits based on blindness and is under age 65 (See the Impairment-Related Work Expense (IRWE) HI 03020.030C.1., if the spouse receives Title disability benefits not based on blindness).

D. Procedure - determining the actual value of work expenses

1. Impairment-Related Work Expenses (IRWE)

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    If an individual alleges IRWE that exceed the 16.3% exclusion, follow SI 00820.540 to determine the actual value of the IRWE. Verify the higher IRWE per SI 00820.550C and record the documentation in MAPS per HI 03010.040.

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    For initial claim and redetermination interviews, input the actual dollar value of the IRWE to replace the 16.3% IRWE exclusion amount posted by the system in the “IRWE/BWE MONEY AMOUNT – YOU” and/or “IRWE/BWE MONEY AMOUNT – SPOUSE” fields on MAPS screen, Work Stop Date and Work Expenses for Disability (ATWE) (See MS 03205.008).

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    For verification case interviews, input the actual dollar value of the IRWE to replace the 16.3% IRWE exclusion amount posted by the system in the “Work-Related Expenses - New Amount” field on the MAPS Verification Screen (See HI 03035.006 – Verification and Documentation Process for Medicare Application Processing System (MAPS)).

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    Do not develop the actual amount of IRWE if the individual alleges an amount that is less than the 16.3% exclusion that the system has automatically computed.

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    Do not reduce the IRWE exclusion below 16.3% if the individual alleges expenses above 16.3% but the evidence provided by the individual supports an amount less than 16.3%.

2. Blind work expenses

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    If an individual alleges BWE that exceed the 25% exclusion, follow SI 00820.535 to determine the actual value of the BWE. Verify the higher BWE per SI 00820.550C. and record the documentation in MAPS per HI 03010.040.

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    For initial claim and redetermination interviews, input the actual dollar value of the BWE to replace the 25% BWE exclusion amount posted by the system in the “IRWE/BWE MONEY AMOUNT – YOU” or “IRWE/BWE MONEY AMOUNT – SPOUSE” fields, on the MAPS screen, Work Stop Date and Work Expenses for Disability (ATWE) (See MS 03205.008).

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    For verification case interviews, input the actual dollar value of the BWE to replace the 25% exclusion amount posted by the system in the “Work-Related Expenses - New Amount” field on the MAPS Verification Screen. (See HI 03035.006 – Verification and Documentation Process for Medicare Application Processing System (MAPS)).

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    Do not develop the actual amount of BWE if the individual alleges an amount that is less than the 25% exclusion that the system has automatically computed.

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    Do not reduce the BWE exclusion below 25% if the individual alleges expenses above 25% but the evidence provided by the individual supports an amount less than 25%.

E. References

SI 00810.410 Infrequent or Irregular Income Exclusion

SI 00810.420 $20 Per Month General Income Exclusion

SI 00820.520 $65 Plus One-Half Remainder Per Month Earned Income Exclusion

SI 00820.535 Blind Work Expenses (BWEs)

SI 00820.540 Impairment-Related Work Expenses (IRWE)

SI 00830.060 Federal Tax Refunds and Advance Tax Credits for SSI Income Purposes

HI 03035.006 Verification and Documentation Process for Medicare Application Processing System (MAPS)

HI 03035.010 Verification Process - Income

MS 03205.008 MAPS Work Stop Date and Work Expenses for Disability (ATWE)

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0603020030
HI 03020.030 - Earned Income Exclusions - 12/19/2023
Batch run: 12/19/2023
Rev:12/19/2023