NABWIS Corner

By Raymond A. Cebula, III, J.D.
Program Director, Senior Extension Associate
K. Lisa Yang and Hock E. Tan Employment and Disability Institute
ILR School, Cornell University

Income Averaging and  the Trial Work Period

SSA clean up from the pandemic has been both hectic and a bit concerning.  The Work Incentive Support Center (WISC) located at the Yang-Tan Institute on Employment and Disability has received several questions concerning the use of “income averaging” during the Trial Work Period (TWP) from benefits planners and Employment Networks (ENs).  Benefits Planners and ENs expressed concerns about this practice as one that is detrimental to a new worker’s return to work effort.  ENs have also expressed issues with the payment of services by SSA as well as the use of “claw back” after an averaging process has been used.

The TWP has always been a very precious work incentive.  Testing the ability to work, testing capacity, trying different jobs are all possible when the TWP is carefully planned.  Planning small work efforts to resolve doubts about the process can be used in order to preserve TWP months for the time when the new worker is ready to give work at the substantial gainful activity (SGA) level a try will truly test the ability to work.  Remember the TWP level is well below SGA and fails to provide a true test of work if only exceeding TWP in a minimal way.

SSA efforts to clean-up work-related backlogs are admirable but at least one “short cut” threatens the very meaning of a TWP.  In order to preserve this important work incentive SSA cannot “average” any period of income to use TWP months if any of those months were actually not “service months”.  To allow this treatment of income is to violate the very notion of TWP as well as supporting regulation and POMs.

Let’s look at the POMS.   DI 13010.060(C) discusses determining service months.  “It is important to determine how many months in the TWP are actual service months.”  Section (C)(1) states that the claims specialist must “(u)se verified earnings information on the supplemental security income record (SSR), along with the beneficiary's statement of work to determine service months for TWP purposes. Further, this section instructs a claims specialist to “not rely solely on SSR wage information to determine if a beneficiary has used a TWP month” in order to determine whether a “service month” exists”.  The POMS section does provide other means of securing wage information but nowhere is “averaging” discussed or allowed.  The only link in this section refers to a TWP during which a CDR is occurring.  In 2023, a “service month” is one in which the new worker earns more than $1050 in gross wages.

Let’s look at the federal regulations.  42 CFR 404.1592 discusses the TWP.  Section (b)(1)(ii)(A)&(B) discusses “services”.  

            (1) If you are an employee. We will consider your work as an employee to be services if:

(i) Before January 1, 2002, your earnings in a month were more than the amount(s) indicated in Table 1 for the year(s) in which you worked.

(ii) Beginning January 1, 2002, your earnings in a month are more than an amount determined for each calendar year to be the larger of:

(A) Such amount for the previous year, or

(B) An amount adjusted for national wage growth, calculated by multiplying $530 by the ratio of the national average wage index for the year 2 calendar years before the year for which the amount is being calculated to the national average wage index for 1999.

Note that the terms work “month” and “earnings in a month” are used.  There is not mention of “averaging” earning to create “service months”.

Lastly, The Red Book indicates that “Your TWP starts when you begin working and performing “services.” We consider your work to be services for the TWP if your gross earnings are above the monthly threshold”.  No notion of “averaging” income is mentioned.

There appears to be no authority allowing SSA to average income over a period of months, or a year, to determine which months were “service months” for the purposes of using TWP months.  In order to protect the use of TWP months by our new workers, SSA must determine TWP months by using verified wages for each month that exceeds the then effective amount of gross wages representing a “service month”. 

Using the proper method of determining if a TWP month has been used is the only way to preserve and respect the very meaning and intention of the TWP and its value to our new workers as well as payments made to ENs whose efforts support our new-workers.

SSA must cease the use of income averaging during the Trial Work Period.

The “service month” also includes a reference to 80 hours of work for a “self-employed” worker.  This article is not intended to address and self-employment issue.

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