If the individual is receiving Supplemental Security Income (SSI), follow the instructions in SM 01005.170 and SM 01305.105.

Input in the Supplemental Security Income Record (SSR) EN field as type “D” income:

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  the amount of income to be excluded (earned and unearned); or

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  $0.01 (1 cent) with a “C” frequency code when only resources are being excluded or for an active PASS with no current income exclusions.

If an SSI application is pending, advise the field office (FO) of the appropriate inputs. For instructions on entering PASS information in the SSI Claims System, see MS 08114.067.

Input type “D” income of $0.01 (1 cent) with an “N” frequency code for the month the denial notice is dated.

Schedule a progress check within 30 to 60 days of approval, or the first milestone, if earlier. Usually, a brief telephone call can confirm the participant is following the plan steps and does not have questions. Set up a schedule of subsequent progress checks between progress reviews based on the circumstances of each PASS. PASS participants frequently encounter problems related to saving PASS funds as agreed, retaining proof of expenditures, and handling unanticipated expenses shortly after being approved, see SI 00870.055.

Schedule progress reviews based on the following:

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  time allowed ends for a goal of “Vocational Rehabilitation (VR) evaluation;”

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  critical milestones;

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  six-month intervals during which funds will be accumulated for PASS expenses but not disbursed;

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  when the individual files a self-employment tax return;

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  when achievement of the work goal is expected; and

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  any other factor you consider appropriate.

Assume that a work goal is feasible and the plan for achieving it is viable when the goal is “VR evaluation,” and when the PASS was prepared by any of the following:

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  a State VR counselor;

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  a public or private vocational counselor, case manager, social worker, or other individual who is licensed or certified by (1) a government agency, (2) the Commission on Rehabilitation Counselor Certification (CRCC), or (3) the Certification of Insurance Rehabilitation Specialists Commission (CIRSC); or

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  an individual acting on behalf of an agency that has been certified by the above or accredited by an appropriate, but unrelated, local or nationally recognized organization such as the American Association for Counseling and Development or the National Rehabilitation Association.

If in doubt, ask for evidence of the preparer's credentials, or those of the organization for which the preparer works, and create a precedent file.

Do not apply the assumption in SI 00870.025B.3.a if there is evidence to the contrary. Some examples of such evidence are:

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  an obvious mistake or oversight on the part of the preparer that could jeopardize successful completion of the PASS;

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  a history of problems with plans developed by the preparer; or

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  the individual would have insufficient income and resources to pay for usual living and PASS expenses if the PASS were approved.

When the conditions in SI 00870.025B.3.a in this section do not apply, consider the work goal in terms of:

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  the nature of the individual's impairment and the limitations imposed by it, based on available evidence, including medical evidence in the FO or the diagnostic code on the SSR or Master Beneficiary Record (MBR);

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  the individual's age (extreme youth or advanced age may contribute to making some work goals unrealistic);

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  the individual's strengths and abilities, based on available indicators; and

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  any observations made by the claims specialist (CS) who conducted the initial PASS interview.

Evaluate the viability of the plan based on consideration of the following factors:

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  the individual’s prior work history, education, and training;

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  how milestones, and target dates for completing them, relate to the work goal; and

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  the individual's familiarity with the requirements and duties of the work goal.

For a self-employment goal, evaluating the viability of the plan includes evaluating the business plan. For more information about business plans and examples of knowledgeable third parties that might help you evaluate the business plan, see SI 00870.026.

If you doubt the feasibility of the work goal or the viability of a plan, or the individual has had two or more unsuccessful plans, proceed as follows:

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  Discuss your concerns with the individual and the preparer, if the individual has given permission to contact the third party. If you continue to believe that the PASS should not be approved as submitted, discuss possible modifications.

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  If the individual is unwilling to modify the PASS, request the individual’s permission to have a knowledgeable third party evaluate the PASS.

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  With the individual's permission, contact a rehabilitation agency, preferably one that has worked with the individual in the past, or another knowledgeable source (e.g., a therapist or the individual's physician) to evaluate the PASS. Provide the third party with all pertinent information including your concerns.

NOTE: Any cost for this “second opinion” can be included as a PASS expense if the PASS is approved. If the individual will not agree to either a third-party evaluation or necessary modifications, explain why you cannot approve the PASS application before issuing a denial notice.

Make sure the PASS contains the following:

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  a list and, if necessary, description of the items and services to be purchased (broad categories or groupings as listed in g. are sufficient unless you question the expense);

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  an estimate of the cost for each article on the list (if the estimate seems unreasonable, obtain verification per d.);

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  an explanation of why each article is needed to achieve the work goal (unless the reason is obvious);

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  an indication that the individual's income other than SSI and resources will cover the proposed PASS expenses;

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  an indication that the individual’s SSI benefits, resources, and income will cover living expenses. If information provided on the SSA-545-BK is incomplete or questionable, supplement those answers by having the individual complete the Average Monthly Living Expenses form located in the Initial PASS Applications section of the PASS Clusters.

Treat all expenses incurred during the first 18 months, or longer if warranted, of a PASS involving self-employment as excludable start-up costs if the expenses are both necessary and reasonable. This provision also applies to ongoing expenses incurred during this period. You may approve expenses the individual incurs after the start-up period if the individual would not otherwise have sufficient remaining income and resources to cover living expenses, medical expenses, and work expenses as described in SI 00870.006A.1.

EXAMPLE: In August 2018, a State VR counselor contacts a PASS Specialist about setting up a PASS for Joan King. Joan is a blind SSI recipient who has a private insurance benefit of $425 a month and plans to open a candy shop in December 2018.

To open the shop, Joan will need $15,000 worth of stock and counter supplies; $350 for the first year's liability, fire, and theft insurance; $150 for utilities hook-up; $250 for the first month's rent; and a security deposit of $500. Thereafter, costs will be an estimated $1,000 a month for stock, $350 a year for insurance, $250 a month for rent, and $125 for utilities.

The counselor says that VR will provide the initial stock and counter supplies, and that the PASS will be needed to help with the other items.

You advise Joan that they can set aside funds under their PASS to cover at least the first 18 months of the business's operation, December 2018 through May 2020, that are not otherwise paid by VR. Their start-up costs include:

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  the $350 for the first year's insurance plus any additional insurance premiums for coverage due through May 2020;

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  the $750 for the combined security deposit and first month’s rent plus recurring monthly rent of $250.00 due through May 2020;

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  the $150 for utilities hook-up plus the cost for utilities through May 2020; and

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  re-stocking of inventory at $1,000 a month through May 2020.

You advise Joan that SSA will exclude $405 of their insurance benefit, since the $20 general exclusion would apply, and any earnings from the store they choose to set aside for their PASS until either:

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  they have paid for all of the start-up costs; or

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  beginning June 2020 or later, they earn a sufficient income from the store to cover their living, medical, and work expenses, see SI 00870.006A.1.

Determine whether each of the planned expenditures is needed to achieve the goal. Allow only those, or that part of the cost of the expense, that did not exist when the individual began actively pursuing the goal (which may have been before the individual submitted the PASS).

For instructions on when it may be appropriate to defer the decision on a particular expense, see SI 00870.006B.12.

If you doubt the need for a particular expense, contact any provider or agency involved for an explanation. If no provider or agency is involved, obtain an explanation and any available related documentation from the individual.

Determine whether a less expensive alternative would meet the individual's needs. If not, check various reliable resources for the cost of similar goods or services. If the cost is excessive by comparison, or you cannot find a similar item, determine the item's current market value (CMV) per SI 01110.400.

Fees for services are based on actual time spent providing the services. If the PASS indicates that necessary services were provided before the PASS was submitted, document the file with the individual's signed statement (SSA-545-BK) confirming that the services were provided. If the individual has already paid for these services, obtain proof of payment.

For items rented or leased by the hour, day, etc., allow only charges for units of time related to the PASS unless:

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  the charge reflects a minimum rental period; or

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  a longer rental period is more economical or practical than frequent shorter periods.

EXAMPLE: An individual who runs a cleaning service uses a floor buffer two days a month. The daily rental rate is $40, which equates to $960 a year. The individual could buy the buffer for $600. You may allow the cost of buying the buffer. If the individual cannot afford to buy it, or wishes to rent until they are better established, you may allow the expense for renting it.

Document the file as to whether the fee (or some portion of it) for preparing a PASS is reasonable. In assessing the reasonableness of the fee, consider the overall involvement the preparer had in the development of the PASS, such as aptitude testing, counseling, and any other pertinent services.

If the preparer has filed an SSA-1696-U4 to serve as the individual's appointed representative, be sure that no part of the preparation fee is for services performed as the representative. Payments to a representative involve a specific SSA billing process, see GN 03920.001.

If a PASS must be modified, do not approve charges for preparing the modification. Do not allow fees for monitoring the person's progress towards an approved work goal.

EXAMPLE: A PASS includes a $1,000 expense for a local private VR agency's assistance with the PASS. You contact the agency to determine whether the expense is reasonable.

You learn that the agency has been certified by the state, worked closely with the individual in developing the PASS, and assessed the individual's interests and abilities to help identify an appropriate work goal. The agency also plans to monitor the PASS to ensure that the individual complies with all requirements.

The agency estimates that a counselor spent 12 hours assessing the individual's vocational abilities and an additional 8 hours developing the PASS. It values this assistance at $35 per hour, for a total of $700. The rest of the fee is for the planned monitoring services.

You determine that $420 (12 hours at $35 per hour) is reasonable for a vocational assessment by a state-certified private VR agency. You also determine that $280 (8 hours at $35 per hour) is a reasonable fee for preparing the PASS itself. However, you inform the VR agency and the individual that fees for monitoring a PASS are not allowable expenses, and the PASS must be modified to remove the $300 portion of the overall fee that is for monitoring.

If the PASS calls for the purchase of an item of unusual value, such as a vehicle or a computer, the individual must explain why the item is necessary to reach the goal. The individual must justify the cost of the item if it does not appear to be reasonable. You must explain that you cannot approve the expense without this information.

Determine whether the item is necessary and whether the cost is reasonable. To make the determination use the criteria in SI 00870.006. If you need assistance in evaluating the individual's explanation of why the item is necessary or justification of the cost, you may consult an objective, knowledgeable third party, such as a professional in the field of vocational rehabilitation and employment, someone in computer sales, Regional Office (RO) systems staff, etc.

If the individual cannot justify the need for the item, or can justify the need but not the stated cost, but the PASS can still be allowed, advise the individual that the PASS can be amended to include the item (or revised cost for the item) at such time as satisfactory justification is provided.

When considering whether to defer your decision on an expense pending completion of a particular milestone, take into account any effect that deferral would have on other types of assistance the individual receives, such as food stamps. Discuss your reasoning with the individual and explain why deferral may be in the individual’s best interest. Consider a short-term rental or lease as an appropriate alternative until the individual reaches one or more milestones under the PASS.

The following list, which is not all-inclusive, contains examples of items and services for which expenses can be allowed under a PASS, provided that they satisfy the criteria in this section:

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  attendant care

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  basic living skills training, see SI 00870.006A.8

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  childcare

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  dues and subscription costs for publications for academic or professional purposes

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  equipment, supplies, operating capital, inventory required to establish and carry on a trade or business, see SI 00870.026

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  equipment and tools, including safety equipment, whether specific to the individual's condition or designed for use by a non-disabled person

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  finance and service charges connected with obtaining any of the above, including finance and service charges related to a bank account that is set up solely for the purpose of keeping PASS funds separate and identifiable

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  food and shelter while temporarily absent from one's permanent residence to attend educational, training, employment, trade, or business activities, if there is also a cost associated with maintaining the permanent residence

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  job coaching or counseling services

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  job search or relocation expenses

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  meals consumed during work hours (including job training and school)

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  modifications to buildings, vehicles, etc., for operational or access purposes for persons with disabilities

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  PASS preparation fees

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  taxes and government-imposed user fees (e.g., permits and licenses) connected with obtaining any item on this list, except that income taxes or government-imposed penalties or fines are not allowable

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  transportation: hire of private or commercial carriers, or hire of person to drive the individual's vehicle

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  transportation: lease, rental, or purchase of a vehicle, plus associated costs for fuel, insurance, maintenance, registration, taxes, etc.

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  transportation: public transportation and common carriers

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  tuition, books, supplies, and all fees and costs imposed by or in connection with an educational or occupational training facility, including fees for tutoring, testing, counseling, etc.

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  uniforms, specialized clothing, safety equipment, and appropriate attire (e.g., suits, dresses) needed for job interviews or to begin working in an office or professional setting