Breaking the Cycle
of SSDI and SSI Benefits
Molly Sullivan
Griffin-Hammis Associates
1
The Facts
 Approximately 14.2 million people under 65 receiving
SSDI and/or SSI
 7.9 million SSDI only
 4.6 million SSI only
 1.6 million both
 Less than ½ of 1% of those receiving benefits earn so
much the benefits stop
 Why are people choosing not to work?
 Combination of several factors, must explore the
barrier(s) for each person
2
Contributing Factors
 Benefits Barrier
 Must demonstrate you can’t work to be found eligible
 Work rules confusing, letters from agency scary, some work
rules not supportive to working
 How to address: provide encouragement that it’s possible
and refer to the Work Incentive Planning and Assistance
Program for expert advice to cut through unfounded fears
 http://ftw.sd-ccd.org/media/ftwsdccdorg/WIPAbrochure01072009.pdf
3
Contributing Factors
 Transportation Barrier




Rural communities have limited transportation options
Some people can drive but can’t afford a vehicle
Some people can’t drive
How to address: No simple/single solution – explore all
possibilities (i.e., SSA Plan to Achieve Self-Support to
purchase a car, carpooling, SSA IRWE to offset cost of
paying someone)
4
Contributing Factors
 Accommodation Barrier
 Disabilities can pose a barrier to accessing a physical building (or
parts of it)
 Disabilities can pose a barrier to completing some or all the job
duties for a given job
 How to address:
 Physical barriers: brainstorm as a team, Job Accommodation
Network (JAN) (www.askjan.org)
 Job duty barriers: use customized employment strategies
(DOL/ODEP (fact sheets and videos):
http://www.dol.gov/odep/topics/CustomizedEmployment.htm)
5
Contributing Factors
 Behavioral Economics - unconscious beliefs and behaviors
(we all experience!)
 Unconscious beliefs we have about money and work affect our
decisions about work (i.e. no employer will hire me, it’s easier
to not work and just live with what I’ve got—no net gain
possible)
 Unconscious behaviors about money (behavior economics)
affect our decisions about work
 How to address: talk about beliefs and unconscious behaviors
about money during career planning (new concept)
6
How Relevant Is This Concept to
Breaking the Cycle of Poverty?
 Example: Budgets
 If beliefs and unconscious
behaviors are the basis of
financial decisions—that
means bringing them to
light is essential to
breaking the cycle of
poverty
7
Behavior and Money
 Traditional economic theory viewed people as:
 Rational in their thoughts and actions about money
 Able to weigh the costs and benefits of items and
situations and choose the best financial option
 Not influenced by other people’s behaviors, their own
experiences or belief
 Sounds more like a robot than a person!
8
Behavioral Economics
 A different way of thinking: Behavioral Economics
 Merging of psychology and economics as related to
human judgment, decision-making, and behavior
 Views people a different way:
 People’s choices are made because of other people,
their experiences and their emotions
 Beliefs influence our behaviors
 People are irrational, but in predictable ways
9
Case Study: Joan
 Joan is 20 years old, lives
with dad who gets SSDI
and doesn’t work,
receives $721 of SSI and is
transitioning out of high
school
 Joan wants to work, but
only 10 hours a week
 Why would that be?
10
Behavioral Economics Concept #1:
Representation
 People impose patterns where they do not exist
based on stereotypes drawn from experiences with a
few members of a group
 Joan’s dad hasn’t been able to work because of his
disability, as a result Joan believes she can’t work
because of her disability
 Joan’s friend at school went to work and ended up with
a huge overpayment and got in trouble with their
parents, as a result she thinks she should only work a
small amount
11
Behavioral Economics Concept #2:
Loss Aversion
 The level of unhappiness that people feel about
something being taken away is higher than the
happiness when it is first received. They are more
likely to go out of their way to prevent loss than to
achieve a gain
 Joan has been offered a job making $1,300/month. She
and her dad found out her SSI would be reduced to
$113.50 so they decided work wasn’t a good idea (even
though her total income will be $1,413.50).
12
Behavioral Economics Concepts #3:
Status Quo Bias
 People have a hard time overcoming the inertia of
doing something the same way. They will keep going
on autopilot rather than make a change (even one
that they know is better for them).
 Joan has her routine of volunteering at the church
daycare after school each day. When asking whether
she’d want a paying job at a different day care she said
no she is happy where she is.
13
Behavioral Economics Concept #4:
Complexity
 Too many or too much of any product or service
impedes a person’s ability to sort through choices
rationally.
 Joan and her dad were given the details on how her SSI
check would change when working ($20 GIE, $65 EIE,
one-half disregard, potential IRWEs or PASS). They
decided work wasn’t a good idea because it would mess
up her benefits.
14
How to Use Behavior Economics in
Breaking the Cycle
 Step 1: Recognize behaviors don’t change in a day





Be careful of your expectations
Introduce possibilities
Help bring unconscious behaviors into the light
Provide alternatives
Be prepared to revisit this barrier throughout the
employment process
15
How to Use Behavior Economics in
Breaking the Cycle
 Step 2: Get the focus on the motivating factor money
 Ask about money goals: Go over handout “What would
you do with a little more money?”
 Draft rough budget –a ballpark
 Use the Living Wage Calculator:
http://livingwage.mit.edu/states/46/locations
 Identify Top Financial Concerns and goals
16
Joan’s Budget
Not Working
($721 SSI only)
Working 35 hr/week at
a daycare ($220 SSI +
$920 = $1,140)
Room/Board
$600
$700
Cell Phone
$40
$40
Misc./Fun/Transpor
tation
$81
$200
Saving for Goal(s)
$0
$200
$721
$1,140
17
Takes a Team
 Step 3: Referrals – You aren’t a financial planning expert. Be
prepared to refer the person for financial education, services,
supports
 Education: Identify local financial education classes and/or refer to
Money Smart:
http://www.fdic.gov/consumers/consumer/moneysmart/adult.html
 Budgeting support: Identify personal or local support (i.e. Center
for Independent Living)
 Credit/Debt Management: Identify local services
 Asset Development: Learn about Individual Development Accounts,
Family Self-Sufficiency Programs, EITC, other local tools
18
10-Minute Overview
 Step 4: Explain how our unconscious behaviors can
work against us –take a few minutes to explain beliefs
and behaviors about money affect our ability to reach
our goals
 Go over the handout “Thinking About Money and
Behavior”—Remember, Knowledge is POWER!
 Be careful not to impose your beliefs about money on
the person – respect where they are and their beliefs
19
Final Thoughts
 We all come to this moment with our own life experiences (do not
judge)
 Those experiences shape our beliefs and conscious behaviors
 Be prepared to address the usual barriers (benefits, transportation,
accommodations, etc.)
 Also be prepared to address unconscious beliefs and behaviors that
may be keeping a person in the cycle of poverty
 Help identify the money motivation “What would you do with a little
extra money”
 Provide appropriate referrals
 Help bring those limiting unconscious beliefs and behaviors to light
20