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What Are Work Incentives?

One of the Social Security Administration’s highest priorities is to help Supplemental Security Income (SSI) recipients, including students, achieve a more independent lifestyle by taking advantage of employment opportunities. SSI work incentives are intended to give SSI recipients the support they need to enter the workforce. Work incentives allow individuals receiving SSI to deduct specified expenses from their gross earnings in calculating SSI payments and continued Medicaid eligibility. These incentives may be of advantage to transition-age students, particularly those participating in community paid employment programs as part of their transition plan. Four of the major work incentives applicable to students are:

Plan for Achieving Self-Support (PASS): Allows a student to set aside income and/or resources for a specified period of time to apply toward a work goal. For example, a student may set aside money for postsecondary education or starting a business.

Impairment Related Work Expense (IRWE): Costs of certain impairment-related items and services that a student needs to work can be deducted from gross earnings. This can be helpful in obtaining transportation, job coaches, and assistive devices needed on the job.

Earned Income Exclusion: Allows a portion of a student’s earned income to be excluded when figuring SSI monthly payments. For students under age 22, the Student Earned Income Exclusion allows a portion of earned income to be excluded when figuring SSI monthly payments; this exclusion is applied before the Earned Income Exclusion.

Adapted with permission from The Study Group, Inc. and The Institute on Community Integration (1998). Meeting the needs of youth with disabilities: Handbook on Supplemental Security Income work incentives and transition students. Minneapolis: Institute on Community Integration, University of Minnesota.

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