The Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) provisions that govern the treatment of post-entitlement earnings are complex and administratively burdensome to implement.  There is considerable interest by SSA, policymakers and advocates in reducing the complexity of the SSDI and SSI work incentive provisions in ways that promote employment among beneficiaries, make them easier for SSA to administer, and ultimately lead to savings to the federal government.

This study analyzes an array of work incentive redesign options and simulates outcomes for an existing cohort of SSDI beneficiaries under each.  Specifically, we consider common, a $1 for $2 offset applied to annual earnings and starting at half of the annualized SGA amount (Smith 2013), a new generalized benefit offset schedule that offers significant work incentives (Gokhale 2013), and options to alter administrative processing by reducing the number of work rules being considered by SSA (Wittenburg et al. 2012).

We use data from multiple years of the National Beneficiary Survey that have been matched to SSA disability program administrative data to examine existing beneficiary work characteristics and outcomes.  We then simulate the extent to which beneficiaries use the work support provisions proposed for elimination or modification in a given year, and assess the characteristics of those who use them and would potentially be affected by their modification.  We also integrate information available from public reports and journal articles to make assumptions  about and assess potential behavioral responses to each policy option. The study addresses SSA’s interest in reducing program costs and program work disincentives in programs, and simplifying work rules. It provides new information about the potential distributional and other effects of promising policy options.