Change in SSDI/WC Offset Included in ABLE Act (HR 647) Passed in the House

By an overwhelming vote of 404 -17 the House of Representatives yesterday passed the Achieving a Better Life Experience Act (HR 647). The bill has as its primary purposes (1) to encourage and assist individuals and

families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life and (2) to provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary’s employment, and other sources.

To pay for the legislation, a series of offsets were added, including a change in the age at which the SSDI/WC offset would be applied from 65 to the revised retirement age under federal law. The change is projected to result in federal savings of an estimated $220 million over ten years. It may also affect the computation of reverse offsets in many states. The amendment language is provided below for reference.

SEC. 201. CORRECTION TO WORKERS COMPENSATION OFFSET AGE.

(a) RETIREMENT AGE.—Section 224(a) of the Social Security Act (42 U.S.C. 424a(a)) is amended, in the matter preceding paragraph (1), by striking ‘‘the age of 65’’ and inserting ‘‘retirement age (as defined in section 216(l)(1))’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to any individual who attains 65 years of age on or after the date that is12 months after the date of the enactment of this Act.

An explanation of the change was provided by congressional staff

“Sec. 201. Technical correction to worker’s compensation offset age. Under current law, Disability Insurance (DI) benefits are generally offset when the beneficiary also receives worker’s compensation (WC) benefits, to ensure total benefits do not exceed 80 percent of average current earnings from before the worker became disabled. The offset ends the month the worker reaches age 65 or the month the worker’s compensation payment stops, whichever occurs first. Prior to 1983 amendments, the WC offset applied to any DI beneficiary who was also receiving WC. However, when Congress increased the full retirement age (FRA) to ultimately reach age 67, it did not increase the age until which the WC offset applied. Under the provision, the age until which the WC offset applies would be aligned to the increased FRA for Social Security. This change was proposed by the Social Security Administration in 2007 and 2008. The legislation would be effective for those under the FRA beginning one year after enactment. According to CBO, the provision would decrease spending by $220 million over 2015-2024.”

The bill now heads to the Senate where it also has very broad support as the result of a Senate companion bill (S 313) introduced by Senator Bob Casey (D-PA). It is likely that the ABLE Act in some form will pass the Senate and that offsets, including this change will be enacted this year and signed by the President.