[Title 20 CFR 404.1576]
[Code of Federal Regulations (annual edition) - April 1, 1996 Edition]
[Title 20 - EMPLOYEES' BENEFITS]
[Chapter III - SOCIAL SECURITY ADMINISTRATION]
[Part 404 - FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )]
[Subpart P - Determining Disability and Blindness]
[Sec. 404.1576 - Impairment-related work expenses.]
[From the U.S. Government Publishing Office]
20
EMPLOYEES' BENEFITS
2
1996-04-01
1996-04-01
false
Impairment-related work expenses.
404.1576
Sec. 404.1576
EMPLOYEES' BENEFITS
SOCIAL SECURITY ADMINISTRATION
FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
Determining Disability and Blindness
Sec. 404.1576 Impairment-related work expenses.
(a) General. When we figure your earnings in deciding if you have
done substantial gainful activity, we will subtract the reasonable costs
to you of certain items and services which, because of your
impairment(s), you need and use to enable you to work. The costs are
deductible even though you also need or use the items and services to
carry out daily living functions unrelated to your work. Paragraph (b)
of this section explains the conditions for deducting work expenses.
Paragraph (c) of this section describes the expenses we will deduct.
Paragraph (d) of this section explains when expenses may be deducted.
Paragraph (e) of this section describes how expenses may be allocated.
Paragraph (f) of this section explains the limitations on deducting
expenses. Paragraph (g) of this section explains our verification
procedures.
(b) Conditions for deducting impairment-related work expenses. We
will deduct impairment-related work expenses if--
(1) You are otherwise disabled as defined in Secs. 404.1505,
404.1577 and 404.1581-404.1583;
(2) The severity of your impairment(s) requires you to purchase (or
rent) certain items and services in order to work;
(3) You pay the cost of the item or service. No deduction will be
allowed to the extent that payment has been or will be made by another
source. No deduction will be allowed to the extent that you have been,
could be, or will be reimbursed for such cost by any other source (such
as through a private insurance plan, Medicare or Medicaid, or other plan
or agency). For example, if you purchase crutches for $80 but you were,
could be, or will be reimbursed $64 by some agency, plan, or program, we
will deduct only $16;
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(4) You pay for the item or service in a month you are working (in
accordance with paragraph (d) of this section); and
(5) Your payment is in cash (including checks or other forms of
money). Payment in kind is not deductible.
(c) What expenses may be deducted--(1) Payments for attendant care
services. (i) If because of your impairment(s) you need assistance in
traveling to and from work, or while at work you need assistance with
personal functions (e.g., eating, toileting) or with work-related
functions (e.g., reading, communicating), the payments you make for
those services may be deducted.
(ii) If because of your impairment(s) you need assistance with
personal functions (e.g., dressing, administering medications) at home
in preparation for going to and assistance in returning from work, the
payments you make for those services may be deducted.
(iii)(A) We will deduct payments you make to a family member for
attendant care services only if such person, in order to perform the
services, suffers an economic loss by terminating his or her employment
or by reducing the number of hours he or she worked.
(B) We consider a family member to be anyone who is related to you
by blood, marriage or adoption, whether or not that person lives with
you.
(iv) If only part of your payment to a person is for services that
come under the provisions of paragraph (c)(1) of this section, we will
only deduct that part of the payment which is attributable to those
services. For example, an attendant gets you ready for work and helps
you in returning from work, which takes about 2 hours a day. The rest of
his or her 8 hour day is spent cleaning your house and doing your
laundry, etc. We would only deduct one-fourth of the attendant's daily
wages as an impairment-related work expense.
(2) Payments for medical devices. If your impairment(s) requires
that you utilize medical devices in order to work, the payments you make
for those devices may be deducted. As used in this subparagraph, medical
devices include durable medical equipment which can withstand repeated
use, is customarily used for medical purposes, and is generally not
useful to a person in the absence of an illness or injury. Examples of
durable medical equipment are wheelchairs, hemodialysis equipment,
canes, crutches, inhalators and pacemakers.
(3) Payments for prosthetic devices. If your impairment(s) requires
that you utilize a prosthetic device in order to work, the payments you
make for that device may be deducted. A prosthetic device is that which
replaces an internal body organ or external body part. Examples of
prosthetic devices are artificial replacements of arms, legs and other
parts of the body.
(4) Payments for equipment. (i) Work-related equipment. If your
impairment(s) requires that you utilize special equipment in order to do
your job, the payments you make for that equipment may be deducted.
Examples of work-related equipment are one-hand typewriters, vision
aids, sensory aids for the blind, telecommunication devices for the deaf
and tools specifically designed to accommodate a person's impairment(s).
(ii) Residential modifications. If your impairment(s) requires that
you make modifications to your residence, the location of your place of
work will determine if the cost of these modifications will be deducted.
If you are employed away from home, only the cost of changes made
outside of your home to permit you to get to your means of
transportation (e.g., the installation of an exterior ramp for a
wheelchair confined person or special exterior railings or pathways for
someone who requires crutches) will be deducted. Costs relating to
modifications of the inside of your home will not be deducted. If you
work at home, the costs of modifying the inside of your home in order to
create a working space to accommodate your impairment(s) will be
deducted to the extent that the changes pertain specifically to the
space in which you work. Examples of such changes are the enlargement of
a doorway leading into the workspace or modification of the workspace to
accommodate problems in dexterity. However, if you are self-employed at
home, any cost deducted as a business expense cannot be deducted as an
impairment-related work expense.
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(iii) Nonmedical appliances and equipment. Expenses for appliances
and equipment which you do not ordinarily use for medical purposes are
generally not deductible. Examples of these items are portable room
heaters, air conditioners, humidifiers, dehumidifiers, and electric air
cleaners. However, expenses for such items may be deductible when
unusual circumstances clearly establish an impairment-related and
medically verified need for such an item because it is essential for the
control of your disabling condition, thus enabling you to work. To be
considered essential, the item must be of such a nature that if it were
not available to you there would be an immediate adverse impact on your
ability to function in your work activity. In this situation, the
expense is deductible whether the item is used at home or in the working
place. An example would be the need for an electric air cleaner by an
individual with severe respiratory disease who cannot function in a non-
purified air environment. An item such as an exercycle is not deductible
if used for general physical fitness. If it is prescribed and used as
necessary treatment of your impairment and necessary to enable you to
work, we will deduct payments you make toward its cost.
(5) Payments for drugs and medical services. (i) If you must use
drugs or medical services (including diagnostic procedures) to control
your impairment(s) the payments you make for them may be deducted. The
drugs or services must be prescribed (or utilized) to reduce or
eliminate symptoms of your impairment(s) or to slow down its
progression. The diagnostic procedures must be performed to ascertain
how the impairment(s) is progressing or to determine what type of
treatment should be provided for the impairment(s).
(ii) Examples of deductible drugs and medical services are
anticonvulsant drugs to control epilepsy or anticonvulsant blood level
monitoring; antidepressant medication for mental disorders; medication
used to allay the side effects of certain treatments; radiation
treatment or chemotherapy for cancer patients; corrective surgery for
spinal disorders; electroencephalograms and brain scans related to a
disabling epileptic condition; tests to determine the efficacy of
medication on a diabetic condition; and immunosuppressive medications
that kidney transplant patients regularly take to protect against graft
rejection.
(iii) We will only deduct the costs of drugs or services that are
directly related to your impairment(s). Examples of non-deductible items
are routine annual physical examinations, optician services (unrelated
to a disabling visual impairment) and dental examinations.
(6) Payments for similar items and services--(i) General. If you are
required to utilize items and services not specified in paragraphs (c)
(1) through (5) of this section but which are directly related to your
impairment(s) and which you need to work, their costs are deductible.
Examples of such items and services are medical supplies and services
not discussed above, the purchase and maintenance of a dog guide which
you need to work, and transportation.
(ii) Medical supplies and services not described above. We will
deduct payments you make for expendable medical supplies, such as
incontinence pads, catheters, bandages, elastic stockings, face masks,
irrigating kits, and disposable sheets and bags. We will also deduct
payments you make for physical therapy which you require because of your
impairment(s) and which you need in order to work.
(iii) Payments for transportation costs. We will deduct
transportation costs in these situations:
(A) Your impairment(s) requires that in order to get to work you
need a vehicle that has structural or operational modifications. The
modifications must be critical to your operation or use of the vehicle
and directly related to your impairment(s). We will deduct the costs of
the modifications, but not the cost of the vehicle. We will also deduct
a mileage allowance for the trip to and from work. The allowance will be
based on data compiled by the Federal Highway Administration relating to
vehicle operating costs.
(B) Your impairment(s) requires you to use driver assistance,
taxicabs or other hired vehicles in order to work.
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We will deduct amounts paid to the driver and, if your own vehicle is
used, we will also deduct a mileage allowance, as provided in paragraph
(c)(6)(iii)(A) of this section, for the trip to and from work.
(C) Your impairment(s) prevents your taking available public
transportation to and from work and you must drive your (unmodified)
vehicle to work. If we can verify through your physician or other
sources that the need to drive is caused by your impairment(s) (and not
due to the unavailability of public transportation), we will deduct a
mileage allowance, as provided in paragraph (c)(6)(iii)(A) of this
section, for the trip to and from work.
(7) Payments for installing, maintaining, and repairing deductible
items. If the device, equipment, appliance, etc., that you utilize
qualifies as a deductible item as described in paragraphs (c) (2), (3),
(4) and (6) of this section, the costs directly related to installing,
maintaining and repairing these items are also deductible. (The costs
which are associated with modifications to a vehicle are deductible.
Except for a mileage allowance, as provided for in paragraph (c)(6)(iii)
of this section, the costs which are associated with the vehicle itself
are not deductible.)
(d) When expenses may be deducted. (1) Effective date. To be
deductible an expense must be incurred after November 30, 1980. An
expense may be considered incurred after that date if it is paid
thereafter even though pursuant to a contract or other arrangement
entered into before December 1, 1980.
(2) Payments for services. A payment you make for services may be
deducted if the services are received while you are working and the
payment is made in a month you are working. We consider you to be
working even though you must leave work temporarily to receive the
services.
(3) Payments for items. A payment you make toward the cost of a
deductible item (regardless of when it is acquired) may be deducted if
payment is made in a month you are working. See paragraph (e)(4) of this
section when purchases are made in anticipation of work.
(e) How expenses are allocated. (1) Recurring expenses. You may pay
for services on a regular periodic basis, or you may purchase an item on
credit and pay for it in regular periodic installments or you may rent
an item. If so, each payment you make for the services and each payment
you make toward the purchase or rental (including interest) is
deductible in the month it is made.
Example. B starts work in October 1981 at which time she purchases a
medical device at a cost of $4,800 plus interest charges of $720. Her
monthly payments begin in October. She earns and receives $400 a month.
The term of the installment contract is 48 months. No downpayment is
made. The monthly allowable deduction for the item would be $115 ($5520
divided by 48) for each month of work during the 48 months.
(2) Nonrecurring expenses. Part or all of your expenses may not be
recurring. For example, you may make a one-time payment in full for an
item or service or make a downpayment. If you are working when you make
the payment we will either deduct the entire amount in the month you pay
it or allocate the amount over a 12 consecutive month period beginning
with the month of payment, whichever you select.
Example. A begins working in October 1981 and earns $525 a month.
In the same month he purchases and pays for a deductible item at a cost
of $250. In this situation we could allow a $250 deduction for October
1981, reducing A's earnings below the SGA level for that month.
If A's earnings had been $15 above the SGA earnings amount, A
probably would select the option of projecting the $250 payment over the
12-month period, October 1981-September 1982, giving A an allowable
deduction of $20.83 a month for each month of work during that period.
This deduction would reduce A's earnings below the SGA level for 12
months.
(3) Allocating downpayments. If you make a downpayment we will, if
you choose, make a separate calculation for the downpayment in order to
provide for uniform monthly deductions. In these situations we will
determine the total payment that you will make over a 12 consecutive
month period beginning with the month of the downpayment and allocate
that amount over the 12 months. Beginning with the 13th month, the
regular monthly payment will be deductible. This allocation process will
be for a shorter period
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if your regular monthly payments will extend over a period of less than
12 months.
Example 1. C starts working in October 1981, at which time he
purchases special equipment at a cost of $4,800, paying $1,200 down. The
balance of $3,600, plus interest of $540, is to be repaid in 36
installments of $115 a month beginning November 1981. C earns $500 a
month. He chooses to have the downpayment allocated. In this situation
we would allow a deduction of $205.42 a month for each month of work
during the period October 1981 through September 1982. After September
1982, the deduction amount would be the regular monthly payment of $115
for each month of work during the remaining installment period.
Explanation:
Downpayment in 10/81.......................... $1,200
Monthly payments 11/81 through 09/82.......... 1,265
------------
12) 2,465 =$205.42
Example 2. D, while working, buys a deductible item in July 1981,
paying $1,450 down. However, his first monthly payment of $125 is not
due until September 1981. D chooses to have the downpayment allocated.
In this situation we would allow a deduction of $225 a month for each
month of work during the period July 1981 through June 1982. After June
1982, the deduction amount would be the regular monthly payment of $125
for each month of work.
Explanation:
Downpayment in 07/81.......................... $1,450
Monthly payments 09/81 through 06/82.......... 1,250
------------
12) 2,700 =$225
(4) Payments made in anticipation of work. A payment toward the cost
of a deductible item that you made in any of the 11 months preceding the
month you started working will be taken into account in determining your
impairment-related work expenses. When an item is paid for in full
during the 11 months preceding the month you started working the payment
will be allocated over the 12-consecutive month period beginning with
the month of the payment. However, the only portion of the payment which
may be deductible is the portion allocated to the month work begins and
the following months. For example, if an item is purchased 3 months
before the month work began and is paid for with a one-time payment of
$600, the deductible amount would be $450 ($600 divided by 12,
multiplied by 9). Installment payments (including a downpayment) that
you made for a particular item during the 11 months preceding the month
you started working will be totaled and considered to have been made in
the month of your first payment for that item within this 11 month
period. The sum of these payments will be allocated over the 12-
consecutive month period beginning with the month of your first payment
(but never earlier than 11 months before the month work began). However,
the only portion of the total which may be deductible is the portion
allocated to the month work begins and the following months. For
example, if an item is purchased 3 months before the month work began
and is paid for in 3 monthly installments of $200 each, the total
payment of $600 will be considered to have been made in the month of the
first payment, that is, 3 months before the month work began. The
deductible amount would be $450 ($600 divided by 12, multiplied by 9).
The amount, as determined by these formulas, will then be considered to
have been paid in the first month of work. We will deduct either this
entire amount in the first month of work or allocate it over a 12-
consecutive month period beginning with the first month of work,
whichever you select. In the above examples, the individual would have
the choice of having the entire $450 deducted in the first month of work
or of having $37.50 a month ($450 divided by 12) deducted for each month
that he works over a 12-consecutive month period, beginning with the
first month of work. To be deductible the payments must be for durable
items such as medical devices, prostheses, work-related equipment,
residential modifications, nonmedical appliances and vehicle
modifications. Payments for services and expendable items such as drugs,
oxygen, diagnostic procedures, medical supplies and vehicle operating
costs are not deductible for purposes of this paragraph.
(f) Limits on deductions. (1) We will deduct the actual amounts you
pay towards your impairment-related work
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expenses unless the amounts are unreasonable. With respect to durable
medical equipment, prosthetic devices, medical services, and similar
medically-related items and services, we will apply the prevailing
charges under Medicare (part B of title XVIII, Health Insurance for the
Aged and Disabled) to the extent that this information is readily
available. Where the Medicare guides are used, we will consider the
amount that you pay to be reasonable if it is no more than the
prevailing charge for the same item or service under the Medicare
guidelines. If the amount you actually pay is more than the prevailing
charge for the same item under the Medicare guidelines, we will deduct
from your earnings the amount you paid to the extent you establish that
the amount is consistent with the standard or normal charge for the same
or similar item or service in your community. For items and services
that are not listed in the Medicare guidelines, and for items and
services that are listed in the Medicare guidelines but for which such
guides cannot be used because the information is not readily available,
we will consider the amount you pay to be reasonable if it does not
exceed the standard or normal charge for the same or similar item(s) or
service(s) in your community.
(2) Impairment-related work expenses are not deducted in computing
your earnings for purposes of determining whether your work was
``services'' as described in Sec. 404.1592(b).
(3) The decision as to whether you performed substantial gainful
activity in a case involving impairment-related work expenses for items
or services necessary for you to work generally will be based upon your
``earnings'' and not on the value of ``services'' you rendered. (See
Secs. 404.1574(b)(6) (i) and (ii), and 404.1575(a)). This is not
necessarily so, however, if you are in a position to control or
manipulate your earnings.
(4) The amount of the expenses to be deducted must be determined in
a uniform manner in both the disability insurance and SSI programs.
(5) No deduction will be allowed to the extent that any other source
has paid or will pay for an item or service. No deduction will be
allowed to the extent that you have been, could be, or will be,
reimbursed for payments you made. (See paragraph (b)(3) of this
section.)
(6) The provisions described in the foregoing paragraphs of this
section are effective with respect to expenses incurred on and after
December 1, 1980, although expenses incurred after November 1980 as a
result of contractual or other arrangements entered into before December
1980, are deductible. For months before December 1980 we will deduct
impairment-related work expenses from your earnings only to the extent
they exceeded the normal work-related expenses you would have had if you
did not have your impairment(s). We will not deduct expenses, however,
for those things which you needed even when you were not working.
(g) Verification. We will verify your need for items or services for
which deductions are claimed, and the amount of the charges for those
items or services. You will also be asked to provide proof that you paid
for the items or services.
[48 FR 21936, May 16, 1983]
Widows, Widowers, and Surviving Divorced Spouses