VCU-BARC

Subsidy

Subsidy is used when a Claims Representative examines work effort to determine if the work an individual performs is Substantial Gainful Activity. Subsidy exist at the time of the determination, for the sole purpose of evaluating work activity. It is the SSA's job to decide if a subsidy exists, and how much of a subsidy can be established for a given circumstance.

What is a Subsidy?

Sometimes a person's disability will result in the need for extra assistance, a reduced production rate, frequent breaks, or fewer job duties than coworkers in a similar job. When that happens, the individual's income is not only pay for their work product, but also represents either direct help from someone else, like a supervisor or job coach, or full pay for lower productivity than other employees. SSA is only interested in assessing earnings that can be attributed directly to the individual and the earnings potential if those supports weren't in place. Therefore, the SSA adjusts the value of the income by deducting the cost attributed to the extra help or special situation that each person experiences.

When Subsidy is Considered?

The SSA considers Subsidy when making an SGA determination for Social Security Disability Insurance (SSDI), Childhood Disability Benefits (CDB formerly known as SSDAC), or Disabled Widow(er)s benefits (DWB). Thus, Subsidy doesn't apply during the Trial Work Period, doesn't apply to SSI at all after the person is eligible, and isn't relevant if the earnings are below SGA without deductions. It applies only as part of the whole package of SSDI work incentives used in an SGA determination: Subsidy, Impairment Related Work Expenses, Unsuccessful Work Attempts (UWA), and income averaging. Unlike Income averaging, and UWA, Subsidy and IRWE may still be used after the consumer has a Cessation month, to allow payment continuation even though gross earnings exceed the current SGA limit.

VCU-BARC Briefing Paper