If You Have Unearned Income Only
This is probably the simplest PASS plan to write because unearned income (e.g.., SSDI, VA Benefits, etc.) is readily available for PASS expenses, and exclusion of the unearned income establishes SSI and Medicaid eligibility.
SSDI $750 - $20 (general income exclusion) -$730 (SSDI sheltered for PASS) = $0 countable unearned income.
With all countable unearned income set aside in a PASS, you are eligible for $603/month in SSI (2006) and Medicaid.
At first glance, you may wonder how this will benefit you. After all, it looks like you might lose your ability to pay for living expenses ($494 as opposed to $750). The trick is to incorporate current expenses into the PASS as much as possible. For example: vehicle payments, insurance, and upkeep may be paid by the PASS; telephone expenses; work clothing; if there is to be a home office, a portion of the rent. If the person is currently paying for medication out of his/her SSDI check, Medicaid eligibility will drastically lower those expenses. Often you will have more cash after PASS authorization than before. Plus you are using the $750 per month to pay for services and equipment for a self-sufficiency. Over a period of 36 months, that is $27,280 to put toward an employment objective.
Case - Larry gets $600 in SSDI. He wants to start his own truck farm business. His PASS plan allows him to set aside his SSDI benefits for business related expenses (Such as his truck) and makes him eligible for $494 from SSI and Medicaid.
Note: This example illustrates what occurs if the entire SSDI check amount is put back for the PASS items. The amount of SSDI to be put into a PASS is negotiable, however before this person is eligible for SSI/Medicaid, he must put $237 of his $730 SSDI check or more into the PASS. $730-$237=$493 (below the FBR rate) SSI/Medicaid eligibility.
Another readily available source of funds to be put aside for PASS plans is SSDAC. In the earlier example, the scenario of a person with a $302 SSDAC check, and a $192 SSI check was mentioned. In this case, the entire $302 - $20 (General Income Exclusion) is unearned income available for immediate PASS utilization. $282 x 36 months is $10,152 toward PASS expenses.
SS Child Benefits
$302.00 - $20.00 (general income exclusion) - $282.00 (SSDAC sheltered for PASS = $0.00 Total = $494.00
$192.00 Total =$494.00
Interestingly, when the SSDAC is sheltered in a PASS (and is zeroed out), the SSI check goes up to FBR or $494 per month! The person loses no money because of the PASS expense.
Person With Both Earned & Unearned Income
This person has gross monthly earnings of $285 at his job. He also receives $825 per month SSDI. Calculations of his maximum PASS amount:
SSDI $825.00 -$20.00 (Exclusion) - $805.00 (SSDI PASS)
Earnings $285.00 - $65.00 (earned income Disreagard) =$220.00. $220.00 divided by 2 = (reg. earnings calc.) $110
$805.00 + 110 = $916 Available for PASS
At this point, because he is spending all of his earned and unearned income in the PASS, he is eligible for SSI and begins receiving an SSI check of $494 per month and Medicaid. And he has $32,580 over 36 months to pay for PASS expenses.
Case - Marge receives $700 from SSDI and works part time, earning $225 a month. She wants to go to school to become an accountant. Her PASS plan lets her set aside $680. of her SSDI benefits and $80. of her pay check for school expenses. This reduces her SGA level and makes he eligible for SSI benefits and Medicaid.
In most instances, writing PASS plans using unearned income resources (SSDI, DAC) is effective and produces excellent outcomes for people who wish to work or develop a business. The available funding through Title II can be quite adequate for initial start-up or for leveraging funding through other sources. The Title II beneficiary may be confused when he/she recognizes that (for the most part) during the duration of the PASS plan, he/she is going to be living on what appears to be far less money. The $494 FBR is less than the SSDI benefit amount for most Title II beneficiaries. The PASS counselor must look to Medicaid benefits associated with the SSI to defray medication costs as an advantage for developing the PASS. Also, the inclusion of current living/working expenses in the PASS, and the savings that they entail, may help convince the person of the value of PASS development and submission.