Benefit Offset Four-State Pilot Demonstration

In August 2005 we initiated a pilot demonstration in four States to test alternate methods of treating work activity in the Social Security Disability Insurance (SSDI) program. The purpose of the Benefit Offset projects was to identify and work through the administrative issues involved in operating a benefit offset demonstration.  We used this information to inform the benefit offset national demonstration (BOND) project.

We designed the BOPD to test a $1 reduction in SSDI benefits for every $2 in earnings in combination with employment supports for a period of up to 72 months, with the goal of helping beneficiaries with disabilities return to work.  Participants maintained ongoing eligibility for health care benefits and other supports linked to SSDI eligibility.  The results of the 4-State Pilots informed the design and implementation of the National Benefit Offset Demonstration that we implemented in January 2011.

The Benefit Offset demonstration pilot program is being tested in the four States listed.

SSA anticipates that the strategies developed for this project will reduce barriers to work and allow beneficiaries with disabilities to increase their employment, earnings and financial independence. SSA used the results from this 4-State pilot project to inform the national demonstration project.

On December 11, 2008, SSA published a notice in the Federal Register announcing our plans for a gradual phase-out of this project. Approximately 400 beneficiaries who completed their trial work periods by December 31, 2008 will continue in the project until the end of the special 72-month Extended Period of Eligibility. Beneficiaries who did not complete their trial work periods by December 31, 2008 returned to regular program rules effective January 1, 2009. As of April 2011 there are 299 beneficiaries still in the pilot, with about 117 of them in benefit offset.

This demonstration project has assisted in the development of effective return-to-work policies by allowing us to obtain valuable, relevant data in advance of implementing the BOND project.  We simplified the BOND design based on the recommendations from the pilot staff and we initiated the development of a BOND Stand-Alone System to provide automation of the benefit calculation and notices arising from the project.  We streamlined the work review process that is needed before a beneficiary can receive the benefit offset.  The BOND Stand-Alone System will provide timely and accurate benefit adjustments for beneficiaries and will automate a reconciliation process that will minimize operational involvement and lessen the administrative burden for field office operations staff.

We used our administrative data to estimate the impact of the $1 reduction in benefits for every $2 in earnings on beneficiary work behavior.  We estimate that the change from the abrupt loss in benefits to a more gradual reduction led to a 25 percent increase in the number of beneficiaries with annual earnings above the annualized SGA earnings amount of $11,760 in 2009 dollars.

Finally, the benefits counseling provided to beneficiaries in the BOPD pilot was essential to communicate the effect of policy changes for the participants and their families.  Beneficiaries participating in benefits counseling during the pilot realized greater earnings, and we have incorporated this concept into the BOND project by offering enhanced benefits counseling to one of the treatment groups.

There is a summary page and full description fact sheet that provides information about the Benefit Offset National Demonstration.