Testimony of Martin H. Gerry,
- Committee on Ways and Means, SuDeputy Commissioner, Social Security Administration
before committee on Social Security
Hearing on SSA's Management of the Ticket to Work Program


Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me today to discuss implementation by the Social Security Administration (SSA) of the Ticket to Work and Self-Sufficiency Program (the "Ticket  to Work program") authorized by The Ticket to Work and Work Incentives Improvement Act of 1999 (the "Act"), PL 106-170.

As you know, Mr. Chairman, SSA administers both the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. These programs provide benefits to about 10.5 million Americans with disabilities.  The Ticket to Work program allows these beneficiaries greater flexibility and expanded choice in obtaining the rehabilitation, employment and other support services that they need to go to work and attain their employment goals.

I would like to express my thanks to you, Mr. Chairman, Mr. Matsui, and members of the Subcommittee, for your hard work and support in making the Ticket to Work program a reality.  I know we will continue to work together closely to strengthen the program in a way which will build on our early successful experience and expand the participation we have already seen in the program.

Commissioner Barnhart and I have been fortunate to participate in Ticket to Work program activities throughout the nation. I know that she has especially fond memories of kicking off the Ticket to Work program in February 2002 alongside the late Senator William Roth.  Among the other Ticket events she attended that year was one in Representative Hayworth's district.  In addition, senior agency staff have traveled throughout the country to help introduce this program to the American people.  Today I would like to provide an update on the implementation of the Ticket to Work program, and touch on a few related issues.

An Overview of the Ticket to Work Program

First, let me briefly describe how the program works.  SSA currently provides benefits under the SSDI and SSI programs to approximately 10.5 million Americans with disabilities. Under current agency regulations, an SSDI or SSI beneficiary with a disability receives a Ticket to Work if he or she is between the ages of 18 and 64 and has a medical condition that is not expected to improve in the near future.  Approximately 9.1 million, or over 85 percent, of all beneficiaries with disabilities meet this standard.

Under the Act, SSA enters into agreements with Employment Networks (ENs) and with State Vocational Rehabilitation Agencies ("State VR Agencies").  ENs are qualified State, local, or private organizations that offer employment support services.  These organizations include One-Stop Career Centers established under the Workforce Investment Act of 1998; single providers of services; or groups of providers organized to combine their resources into a single entity.

A beneficiary who receives a Ticket to Work can choose to assign it to any EN that provides services within the community or to the State VR Agency.  Together, these organizations are referred to as "Ticket Providers." An EN may decide whether or not to accept the assignment of a Ticket. The Act requires that an EN accept a measure of risk whenever it agrees to provide services to a beneficiary. ENs may only be paid based on their success in assisting beneficiaries to secure and maintain employment and move off the disability benefit rolls. An EN might never be paid if a beneficiary's cash benefits do not stop as a result of work.  State VR Agencies are receiving approximately $2.6 billion from the Department of Education for the primary purpose of providing employment services to individuals with significant disabilities.  VR agencies are therefore better capitalized than small or new ENs and incur less financial and actuarial risk than ENs serving smaller numbers of individuals.

Once a Ticket is assigned by a beneficiary to a Ticket Provider, the beneficiary and the Provider jointly develop and implement a plan of employment, vocational, or other support services designed to lead to and maintain employment.  Providers may provide these services directly or by entering into agreements with other organizations or individuals to provide the appropriate services at no cost to the beneficiary.

Ticket Providers may be paid based only on their success in assisting beneficiaries to secure and maintain employment and move off the disability benefit rolls. Where this occurs, an EN may elect to receive payment under one of two systems.  Under the Outcome Payment System an EN will be paid for each month, up to sixty months, in which a beneficiary it is serving does not receive cash benefits due to work or earnings.  Under the Outcome-Milestone Payment System, an EN will receive payment when a beneficiary it is serving reaches one or more milestones toward self-supporting employment.  Under this second

payment system, the EN will also receive reduced outcome payments for each month, up to sixty months, that a beneficiary does not receive cash benefits due to work or earnings.  The agency has provided up to four milestones for which an EN can be paid. 

The Ticket to Work Act provides three additional incentives to encourage work activity by beneficiaries.  First, SSA will not schedule a periodic continuing disability review (CDR) for a beneficiary who is receiving services from a Ticket Provider. Second, work activity by an SSDI beneficiary will not trigger a CDR if the beneficiary has received benefits for at least 24 months.  Finally, an individual whose benefits terminated because of work activity can request that benefits start again without having to complete a new application for benefits. 

Implementation of the Ticket to Work Program

SSA is implementing the Ticket to Work program in three phases. During the first phase of the program, from February through October 2002, about 2.4 million beneficiaries with disabilities in 13 states received Tickets to Work. During the second phase, which ran from November 2002 through September 2003, we mailed Tickets to approximately 2.6 million beneficiaries in 20 additional States and the District of Columbia.  Then beginning in November 2003, we started releasing Tickets to the approximately 4.1 million beneficiaries in the remaining 17 States and the U.S. Territories during the third and final implementation phase. 

Through February 2004, Tickets have been mailed to over 6.9 million disabled beneficiaries.  By September 2004, the remaining 2.2 million eligible beneficiaries will have been mailed a Ticket to Work, and any eligible beneficiary who has yet to receive a Ticket to Work in the mail can obtain one by asking for it. To date, we have certified almost 1,100 ENs to participate in the Ticket program.

The Act calls for the Commissioner to enter into agreements with Program Managers to assist the Agency in administering the Ticket to Work program.  Among the duties of our Program Manager, Maximus , Inc. , are recruiting, recommending, and monitoring the ENs selected by SSA to provide services; facilitating beneficiary access to the ENs; facilitating payment to Ticket Providers; and resolving disputes between beneficiaries and Ticket Providers under the program.

Ongoing Operation of the Ticket to Work Program

As of the beginning of this month, 40,441 SSDI and SSI beneficiaries who had received Tickets to Work ("Ticket Holders") had assigned them to Ticket Providers.  Of this total, 36,525 (90%) were assigned to a State VR Agencies and 3,916 (10%) were assigned to other ENs.  Approximately 30 percent of ticket assignments have been made in the last 5 months.

The first milestone payment was made by Maximus during May 2002.  The first outcome payment was paid in July 2002.  Through February 2004 we have made more than 1,600 payments to nearly 120 ENs totaling over $530,000 based on the work of 450 beneficiaries. 

Our early experience shows us that the Ticket is already proving it can provide beneficiaries with more opportunities to obtain employment support services to help them reach their employment goals.  It is our mission to see that the ticket lives up to its potential to return people to work

Evaluation of the Ticket to Work Program

Section 101(d) of the Ticket to Work Act requires the Commissioner to submit periodic evaluation reports of the Ticket to Work program to Congress. SSA has contracted with Mathematica Policy Research, Inc. ("Mathematica ") to evaluate the impact of the Ticket to Work program.  Mathematica has provided a draft of its first in a series of evaluation reports.  I will be happy to provide the Subcommittee with a copy of the final version of this report which we expect to be available shortly, and will also be happy to brief you on its findings. 

Mathematica's preliminary findings are generally consistent with our experience with the program.  Most beneficiaries who use Tickets to Work have assigned them to traditional State VR agencies.  Ticket assignments to ENs have been concentrated among a few ENs, and the ENs as a group feel that SSA needs to move quickly to make the process friendlier to providers.

As Mathematica notes in the draft report, overall, it is clear that SSA has made great progress in developing such a system to assist individuals with disabilities to find work and remain in the workforce.  This undertaking, which required SSA to develop new capabilities to integrate information

from the SSI and DI programs, so that beneficiaries work could be appropriately considered in determining theirs and their service providers eligibility to benefits.

The Work of the Adequacy of Incentives Advisory Group

The Ticket to Work and Work Incentives Improvement Act of 1999 identified four groups of people with disabilities as potentially "at risk." These groups are: 1) individuals with a need for ongoing support and services; 2) individuals with a need for high-cost accommodations; 3) individuals who earn a sub-minimum wage; and 4) individuals who work and receive partial cash benefits.

The Act requires the Commissioner to study the adequacy of incentives to Employment Networks in the Ticket to Work program for serving these four groups of beneficiaries.  SSA formed an Adequacy of Incentives Advisory Group to help determine the best approach for conducting a targeted, in-depth analysis of the "at risk" groups.  The Advisory Group has been meeting quarterly, and will complete its work this spring 2004.  Last fall, the group issued an interim report, "Recommendations for Improving Implementation of the Ticket to Work and Self-Sufficiency Program (Regulatory and Administrative Changes)."  The group will also issue a final report, which will propose projects to evaluate the effectiveness of adjusted incentives and recommendations regarding the most promising adjusted incentives.

Recommendations of the Ticket to Work Advisory Panel

The Ticket to Work Advisory Panel has been a valuable partner in studying the program and making recommendations for improvements.  They too have been concerned about the balance between State VR agencies and other ENs, and about ways in which we can encourage more beneficiaries to assign their Tickets to ENs.  They also advise us on ways to improve our public education of the program and how to market the program to both beneficiaries and potential ENs.

We have carefully considered the recommendations of the Panel with respect to establishing a corps of work incentive specialists, who will be available to advise beneficiaries on the effects of work on benefit payments, and on ways to reduce the incidence of overpayments caused

by work.  They recognize, as do we at SSA, that the fear of creating overpayments is a powerful disincentive to returning to work that our beneficiaries face.

The $1 for $2 Benefit Offset Demonstration

The Ticket to Work legislation required SSA to test a DI benefit offset similar to what is provided in the SSI program.  Generally, SSI benefits are reduced $1 for every $2 earned over the $65 earned income monthly exclusion.  Because there is no parallel provision for the DI program, DI beneficiaries are often reluctant to attempt work because of the abrupt loss of all cash benefits faced if they engage in substantial gainful activity.  

Therefore, we plan to conduct a national demonstration project to test a $1 reduction in benefits for every $2 in earnings over a certain level in the DI program in combination with interventions that offer a range of ongoing employment supports, which may include some combination of employment services, health care services, transportation assistance, training, and other similar supports. 

In addition, we plan to conduct a small-scale process demonstration of the benefit offset in four sites.  We expect this project to begin enrolling participants this fall.

Program Improvements

I would now like to discuss a number of initiatives we have already put in place on a number of fronts to improve our return to work services based on all the information that we have received.  They include simplifying the payment process for ENs, increasing the pool of ENs, improving our wage reporting process, and jointly funding with the Department of Labor a new position to help people with disabilities increase their employment opportunities.  I will discuss these in more detail.

Work Incentive Specialists

Section 1149 of the Social Security Act, as enacted by Section 121 of the Ticket Act requires SSA to establish a corps of specialists devoted to issues related to work incentives.  We have worked closely with Subcommittee staff to develop and implement this concept.

Commissioner Barnhart has expanded the pool of field employees who would be available to answer questions relating to return to work, while establishing a dedicated number of employees in each area of the region who will serve full time as Area Work Incentive Coordinators (AWICs), for a total of 58 employees nationwide.  I want to thank the Subcommittee for its advice and guidance as we worked closely with you to develop this approach.

AWICs are the focal point of contact for advocates area-wide, and serve as ombudsmen.  They monitor the area employment support workloads and work with the Area Directors to ensure that we effectively manage work incentive workloads. In addition, we have trained all of our public service employees, including staff in all local Social Security offices, on SSA  employment support programs.  AWICs work with other staff to develop any area training needs to maintain the level of expertise on work incentives for all direct contact employees and they are a ready resource for providing accurate information to those employees when questions arise.

An Improved EN Payment Process

Because many ENs found the payment process too cumbersome, we have developed a new, simpler process for paying them. Under the new process, SSA will pay ENs upon receiving a certification from the EN that a Ticket Holder is still working, provided that the EN initially submits return to work evidence.  Prior to this change, ENs were required to send in evidence of the work, such as pay stubs, monthly.  Now ENs have several options for requesting payments on either a monthly or quarterly basis without needing to submit pay stubs.

Expanded Choice of Employment Networks

In order to attract sufficient providers of employment services and in concert with Maximus, we have conducted 90 Employment Network Opportunity Conferences across the country.  We did this so beneficiaries will enjoy the degree of choice when selecting an EN that the Congress envisioned when the Act was passed.  These events were attended by more than 8,000 individuals, representing 6,100 organizations.  To date, 483 conference attendees have applied to become employment networks.  In addition, Maximus has made presentations about the Ticket to Work program at nearly 300 events nationwide and delivered the message to 20,000 different organizations and 50,000 individuals through 250,000 distinct contacts.  We will continue to seek out EN recruitment opportunities and process improvements so we may offer more choices for our beneficiaries who want to work.

Because we learned that the lack of upfront funding was a barrier to EN participation, SSA has developed an EN capitalization initiative that helps ENs locate and apply for additional funding to support their efforts. 

Eliminating Barriers and Disincentives

Overpayments to beneficiaries with disabilities attempting to work are a major barrier to participation in the Ticket to Work program.  Disability recipients who try to return to work deserve to know that their work information will be processed right away to prevent large overpayments that are a burden to the recipient as well as an important program integrity issue.  Accurate and prompt wage report processing is critically important. 

The Social Security Protection Act of 2004 (P.L. 108-203) imposes a requirement for a work report receipt, and we expect that our current software, known as the Modernized Return to Work, or MRTW, and our PC-CDR processes that field offices have been using, should be able to fulfill that requirement.  The issue of handling work reports is a major priority of Commissioner Barnhart, and we expect several new processes to have a positive impact on the problem, reducing both overpayments and the work disincentives caused by the threat of such overpayments.

In January 2004, we began a phased rollout of our eWork application for controlling and processing disability work activity and work CDR workloads.  It replaces the stand-alone MRTW and PC-CDR that I have just mentioned.  The eWork system automates and simplifies the processing of work issues in Title II disability cases; its key functional areas are workload management and control, case development, adjudication and decision-making, notices and forms, and automated mainframe systems inputs.  In summary, eWork connects all of the separate pieces to the whole through an electronic interface usable by authorized personnel nationwide and work to minimize the occurrence of overpayments due to work. .

Expansion of Work Opportunities

Over the last 18 months, SSA has worked closely with the Department of Labor's Employment and Training Administration and its State and local partners to jointly fund the establishment of a new position, the Disability Program Navigator.  Approximately 110 Navigators have been hired to work in DOL One-Stop Career Centers in 14 states.  A key role for Navigators is to help people with disabilities to increase their employment opportunities. Locating of the Navigator in the One-Stop Career Centers provides an important link to local employers in fulfilling this role.  Navigators will also facilitate access to programs and services that impact

successful entry or reentry into the workforce.  This includes access to housing, transportation, health care, and assistive technologies as needed to effectively participate in training services or for successful placement in employment.

SSA is also continuing to use the Employer Assistance Referral Network (EARN) managed by the Department of Labor's Office of Disability Employment Policy and the Ticket to Hire, a specialized subunit of EARN that matches employers with job ready candidates from the Ticket to Work program.


Finally, I thank you, Mr. Chairman, Mr. Matsui, and all the members of the Subcommittee, for showing continued dedication to the Ticket to Work program.  Thanks to that commitment, we look forward to providing more beneficiaries with the additional opportunities and tools they need to enter or reenter the workforce.

In addition, I would like to thank you for your work to pass H.R. 743,  the Social Security Protection Act of 2004(P.L. 108-203).  Because of the provisions in the bill regarding SSA demonstration projects, including ensuring that projects can continue to move beyond this December, we can move forward with our agenda of projects designed to provide alternative return to work services.

I would also like to acknowledge the valuable input we have received from the Ticket Advisory Panel and the Social Security Advisory Board.  We are committed to achieving the goal set by Congress to improve access to jobs for Americans with disabilities.  I believe, and I am sure you will agree, that the nation benefits greatly when all of its citizens have the opportunity to make the most of their talents.  We look forward to working with you as we continue our efforts to make the Ticket to Work program a success.