Social Security Administration Payments to State Vocational Rehabilitation Agencies for Beneficiaries Who Work: Evidence from Linked Administrative Data

DRC Working Paper Number: 2017-02
Publisher: Washington, DC: Center for Studying Disability Policy, Mathematica Policy Research
Mar 31, 2017
Jody Schimmel Hyde and Paul O'Leary

Key Findings:

  • Payments from SSA to SVRAs were relatively rare during our period of study. Among all beneficiaries who first applied for VR services from 2002 through 2007 (including those who ultimately have their case closed before receiving services), approximately one in 20 have work activity that triggers a payment from SSA to an SVRA.
  • The total BFW accrued among beneficiaries who applied for services from SVRAs dwarfed the payments SSA made to the SVRAs for serving those beneficiaries. Total BFW was nearly seven times higher than the total payments made, even under our most restrictive criteria.
  • Many beneficiary VR applicants are not served when they initially apply for services, perhaps because fiscal constraints affect SVRAs’ ability to serve all applicants. Yet, a share of these beneficiary applicants reapply and receive services later, with some generating BFW and ultimately working at a level to trigger payments from SSA.
  • There is wide agency-level variation in the share of beneficiaries for whom SSA makes a payment to an SVRA. Some agencies collect a low share of payments given how many beneficiary applicants they serve while others collect a disproportionately high share of payments. 
This paper examines federal disability beneficiaries who apply for services from a State Vocational Rehabilitation Agency (SVRA) and work at a level substantial enough to forgo cash disability benefits. When the beneficiary earns above the substantial gainful activity level for a sustained period, SVRAs can generally ask SSA to pay them, either under a traditional cost reimbursement scheme or through Ticket to Work. We compare these payments to estimates of the cash benefits forgone for work (BFW) using linked data from the 2012 Disability Analysis File (DAF12) and Rehabilitation Services Administration (RSA-911) case closure files. For beneficiaries applying for VR from 2002 through 2007, we found that the total BFW they accrued was many times higher than the payments SSA made on their behalf. The ratio of BFW to payments varied by beneficiary characteristics, whether the applicants ultimately received VR services, and the SVRA that provided services.