Social Security Disability Insurance (SSDI) Demonstration Projects

Social Security Disability Insurance (SSDI) Demonstration Projects

Social Security Disability Insurance (SSDI)
Demonstration Projects
Scott D. Szymendera
Analyst in Disability Policy
William R. Morton
Analyst in Income Security
April 10, 2014
Congressional Research Service
RL33585

Social Security Disability Insurance (SSDI) Demonstration Projects

Summary
Congress authorized the Social Security Administration (SSA) in 1980 to conduct demonstration
projects to test changes to the agency’s Social Security Disability Insurance (SSDI) and
Supplemental Security Income (SSI) programs. The demonstration authority granted by Congress
allowed the SSA, on its own, to temporarily waive program rules, including rules regarding
program eligibility and benefit administration, in order to test the impact of these changes on the
return to work rate of program beneficiaries and the size of the SSDI and SSI benefit rolls.
Although Congress granted the SSA permanent authority to conduct SSI demonstrations in the
1980 amendments, the authority given the agency to conduct SSDI demonstrations was
temporary and expired in 1985. Since 1985, Congress has passed five temporary extensions of the
agency’s SSDI demonstration authority. The most recent of these extensions expired in 2005
leaving the SSA without the authority to begin any new SSDI demonstration projects. At that
time, the SSA was in the process of planning and administering eight SSDI demonstration
projects. Five of these demonstration projects have been completed, two were cancelled before
implementation, and one is ongoing.
In 2004 and 2008, the Government Accountability Office (GAO) criticized the SSA for its
administration of its disability demonstration projects. The GAO found that the SSA did not use
the authority granted to it by Congress to test a wide enough variety of program options and did
not have in place a system to identify program changes and policy options that should be tested in
demonstrations. In addition, the GAO criticized the SSA for the methodological limitations of
some of its demonstration projects and found that the results of these projects were not properly
shared within the agency, with Congress, or with the public. Because of this, the GAO concluded
that these SSA demonstration projects had little impact on the overall policy debate or on the
ways that Congress and the agency could work to improve the historically low return to work rate
of SSDI and SSI beneficiaries and reduce the rolls of these large disability benefit programs.
This report presents a summary of the five completed and one ongoing SSDI demonstration
projects. The objective of this information is to aid Congress in its ongoing discussions of the
future of the SSA disability benefit programs and the decision to temporarily or permanently
extend the demonstration authority of the agency.

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Contents
Social Security Disability Benefit Programs ................................................................................... 1
Social Security Disability Insurance ......................................................................................... 1
Supplemental Security Income ................................................................................................. 1
Legislative History of the SSA’s Disability Demonstration Authority ............................................ 2
The Social Security Disability Amendments of 1980 ............................................................... 2
Extensions of SSDI Demonstration Authority .......................................................................... 3
GAO Evaluations of SSA’s Use of Its Demonstration Authority .............................................. 3
Status of SSDI Demonstration Projects ........................................................................................... 4
Completed SSDI Demonstration Projects ....................................................................................... 5
Accelerated Benefits Demonstration ......................................................................................... 5
Benefit Offset Pilot.................................................................................................................... 6
State Partnership Initiative ........................................................................................................ 6
Mental Health Treatment Study ................................................................................................ 7
Youth Transition Demonstration ............................................................................................... 8
Ongoing SSDI Demonstration Projects ......................................................................................... 10
Benefit Offset National Demonstration ................................................................................... 10

Tables
Table 1. Legislative History of SSA’s Demonstration Authority ..................................................... 2
Table 2. Status of SSDI Demonstration Projects ............................................................................. 4

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Social Security Disability Insurance (SSDI) Demonstration Projects

Social Security Disability Benefit Programs
The Social Security Administration (SSA) administers two programs, Social Security Disability
Insurance (SSDI) and Supplemental Security Income (SSI), which provide income and benefits to
persons unable to work because of serious disabling conditions.1 In both programs, disabled
individuals must pass the same statutory test of disability as outlined in Titles II and XVI of the
Social Security Act.2
Social Security Disability Insurance
The SSDI program pays benefits to disabled individuals under the provisions of Title II of the
Social Security Act. SSDI benefits are paid to those who meet the statutory test of disability and
have completed a five-month waiting period from the onset of disability.3 SSDI is an insured
program and beneficiaries must have sufficient work histories in employment covered by Social
Security to qualify for benefits.4 Benefits and administrative costs are paid out of the Disability
Insurance (DI) Trust Fund, which is funded by a portion of the payroll taxes collected on
earnings.5 The SSDI program pays monthly benefits based on past earnings and, after two years,
participants are eligible to receive Medicare.6 Benefits are also paid to the spouses and dependent
children of SSDI beneficiaries.
In February 2014, the SSDI program paid benefits to nearly 11.0 million people, including more
than 8.9 million disabled workers, 153,000 of their spouses, and almost 1.9 million of their
dependent children. That month, the SSDI program paid out more than $10.9 billion in benefits
with disabled workers each receiving an average monthly cash benefit of $1,145.91.7
Supplemental Security Income
Under the provisions of Title XVI of the Social Security Act, disabled individuals are entitled to
benefits from the SSI program if they meet the statutory test of disability and have income and

1 For more information on the SSDI and SSI programs, see CRS Report RL32279, Primer on Disability Benefits:
Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
2 42 U.S.C. §§423(d) and 1382c. A person is disabled under the terms of the statute if he or she is unable to engage in
any substantial gainful activity (for 2014, earnings of $1,070 per month for non-blind persons and $1,800 per month for
blind persons) because of a medically determinable physical or mental impairment. This impairment must be expected
to result in the impaired person’s death, or be expected to last at least 12 consecutive months. In addition, this
impairment must prevent a person from engaging in his or her previous work or in any other work that exists in the
national economy. Special rules apply to persons who are blind.
3 For more information on the five-month waiting period, see CRS Report RS22220, Social Security Disability
Insurance (SSDI): The Five-Month Waiting Period for Benefits.
4 A detailed explanation of the insurance requirements can be found in CRS Report RL32279, Primer on Disability
Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
5 For information on the DI trust fund, see CRS Report R43318, Social Security Disability Insurance (DI) Trust Fund:
Background and Solvency Issues, by William R. Morton.
6 For more information, see CRS Report RS22195, Social Security Disability Insurance (SSDI) and Medicare: The 24-
Month Waiting Period for SSDI Beneficiaries Under Age 65.
7 Social Security Administration, Monthly Statistical Snapshot, February 2014, March 2014, Table 2,
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot (hereinafter cited as “SSA Monthly Statistical Snapshot”).
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assets that fall below program guidelines. SSI benefits are paid out of the general revenue of the
United States and all participants receive the same basic monthly benefit.8 In most states, adults
who collect SSI are automatically entitled to coverage under the Medicaid health insurance
program.9
In February 2014, nearly 8.4 million people, including more than 1.3 million disabled children,
received SSI benefits. That month, the average benefit received was $535.10 and the program
paid out a total of $4.7 billion in SSI cash benefits.10 Moreover, some SSI beneficiaries may
qualify for SSDI. In February 2014, over 1.6 million disabled individuals under the age of 65
received both Social Security and SSI cash benefits.11
Legislative History of the SSA’s Disability
Demonstration Authority
Table 1. Legislative History of SSA’s Demonstration Authority
Expiration Date of
Public Law
SSDI’s Demonstration
Number
Public Law Name
Authority
P.L. 96-265
Social Security Disability Amendments of 1980
June 9, 1985
P.L. 99-272
Consolidated Omnibus Budget Reconciliation Act of 1985
June 19, 1990
P.L. 101-239
Omnibus Budget Reconciliation Act of 1989
June 10, 1993
P.L. 103-296
Social Security Independence and Program Improvements Act of 1994 June 10, 1996
P.L. 106-170
Ticket to Work and Work Incentives Improvement Act of 1999
December 18, 2004
P.L. 108-203
Social Security Protection Act of 2004
December 18, 2005
Source: The Congressional Research Service (CRS).
The Social Security Disability Amendments of 1980
Congress first granted the SSA the authority to conduct disability demonstration projects with the
passage of the Social Security Disability Amendments of 1980 (P.L. 96-265). The 1980
amendments conferred upon the SSA the authority to conduct SSDI demonstration projects for

8 The basic monthly federal benefit amount for 2014 is $721 for a single person and $1,082 for a couple. This amount is
supplemented by a majority of the states and the District of Columbia. A participant in the SSI program receives the
federal benefit amount, plus any state supplement, minus any countable income. SSI benefits are not available to
residents of Puerto Rico, Guam, or the U.S. Virgin Islands. Residents of these jurisdictions are eligible to receive
federal benefits from their commonwealth or territorial government under provisions of Titles I, X, XIV and XVI of the
Social Security Act. These benefits are administered by the Department of Health and Human Services.
9 For more information on Medicaid for persons with disabilities, see CRS Report R43357, Medicaid: An Overview,
coordinated by Alison Mitchell.
10 Because SSI benefits are reduced by countable income, the average monthly SSI benefit is lower than the basic
federal benefit amount. SSA Monthly Statistical Snapshot, Table 3.
11 SSA Monthly Statistical Snapshot, Table 1. The vast majority of SSI beneficiaries under the age of 65 in concurrent
receipt of Social Security draw SSDI cash benefits; however, some SSI beneficiaries under age 65 receive dependent
benefits from the Old-Age and Survivors Insurance (OASI) program.
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five years and permanent authority to conduct SSI demonstration projects. The 1980 amendments
also outlined the type of demonstration projects that should be undertaken and the rules that
should govern these projects.
Although Congress granted the SSA permanent authority to conduct SSI demonstrations in the
1980 amendments, the authority given the agency to conduct SSDI demonstrations was
temporary and expired in 1985. Since 1985, Congress has passed five temporary extensions of the
agency’s SSDI demonstration authority. The most recent of these extensions expired in 2005
leaving the SSA without the authority to begin any new SSDI demonstration projects.
Extensions of SSDI Demonstration Authority
Congress first extended the agency’s SSDI demonstration authority in 1986 with the passage of
the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272). Section 2101 of this
act extended the SSDI demonstration authority of the SSA until 1990. Before this expiration date,
Congress further extended the agency’s SSDI demonstration authority with the passage of the
Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239). Section 10103 of this act extended
the agency’s SSDI demonstration authority until 1993. This authority was further extended until
1995 by Section 315 of the Social Security Independence and Program Improvements Act of
1994 (P.L. 103-296).
When the SSA’s authority to conduct SSDI demonstrations expired in 1995, it was not renewed
again until the passage of the Ticket to Work and Work Incentives Improvement Act of 1999,
which granted the agency a five-year extension of its demonstration authority (P.L. 106-170).
This authority was extended a final time in 2004 with the passage of the Social Security
Protection Act of 2004 (P.L. 108-203). Section 401 of this act granted a final extension of the
agency’s demonstration authority until December 2005. With the expiration of this provision, the
SSA currently does not have the authority to begin any new SSDI demonstration projects but does
have the authority to continue projects that began before the expiration of the demonstration
authority.
President Barack Obama’s Fiscal Year (FY) 2015 budget proposes to restore the SSA’s
demonstration authority for the SSDI program, and SSA officials have urged Congress to support
this proposal in the past.12
GAO Evaluations of SSA’s Use of Its Demonstration Authority
Section 303(e) of the Ticket to Work Act directed the GAO to study the results of the SSA’s
disability demonstration projects. The report, entitled Social Security Disability: Improved
Processes for Planning and Conducting Demonstrations May Help SSA More Effectively Use Its
Demonstration Authority, was released in November 2004. In the report, the GAO criticized the
SSA for not testing a wide enough variety of policy alternatives in its demonstrations, for the

12 Office of Management and Budget, Analytical Perspectives, Budget of the United States Government, Fiscal Year
2015, March 2014, p.67, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/spec.pdf. See also
U.S. Congress, House Committee on Ways and Means, Subcommittee on Social Security, Chairman Johnson
Announces Hearing on Encouraging Work Through the Social Security Disability Insurance Program, Testimony of
David Weaver, Associate Commissioner of SSA’s Office of Program Development and Research, 113th Cong., 1st sess.,
June 19, 2013, http://waysandmeans.house.gov/uploadedfiles/weaver_testimony_61913ss.pdf.
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methodological limitations of many past demonstrations, and for the SSA’s lack of
communication of the results of these demonstrations with the public, Congress, or within the
agency.13 The report concluded that the SSA’s disability demonstration projects had little impact
on the overall efforts of the agency and Congress to improve the historically low return to work
rate of SSDI and SSI program participants.
Four years after the 2004 report, the GAO issued another report critical of the SSA’s management
of its demonstration projects.14 In this 2008 report, the GAO found that while the SSA had taken
steps to improve agency management of disability demonstration projects, several problems
found in the 2004 report remained, including a lack of research protocols to govern demonstration
projects. As it had concluded four years earlier, the GAO in 2008 found that the SSA’s
demonstration projects had little impact on disability policy and the SSDI and SSI programs.
Status of SSDI Demonstration Projects
In its 2008 report, the GAO identified eight demonstration projects that the SSA had begun under
its SSDI demonstration authority before this authority expired in 2005.15 Of these eight projects,
six are related to the SSDI program and two are related to both the SSDI and SSI programs. The
GAO further identified that two of these projects had been canceled.16 As of this report, five
demonstration projects have been completed and one is ongoing. Table 2 provides a summary of
the status of the eight SSDI demonstration projects.
Table 2. Status of SSDI Demonstration Projects
Project
Focus
Status
Accelerated Benefits Demonstration
SSDI
Completed

Benefit Offset National Demonstration (BOND)
SSDI

Ongoing

Benefit Offset Pilot
SSDI
Completed

California RISE (HIV and autoimmune disorders)
SSDI

Canceled
Early Intervention Demonstration
SSDI

Canceled
Mental Health Treatment Study
SSDI
Completed

State Partnership Initiative (SPI)
SSDI and SSI
Completed

Youth Transition Demonstration
SSDI and SSI
Completeda

Source: CRS table with information from U.S. Government Accountability Office, Social Security Disability:
Management Controls Needed to Strengthen Demonstration Projects, GAO-08-1053, September 26, 2008; Social

13 U.S. Government Accountability Office, Social Security Disability: Improved Processes for Planning and
Conducting Demonstrations May Help SSA More Effectively Use Its Demonstration Authority, GAO-05-19, November
4, 2004.
14 U.S. Government Accountability Office, Social Security Disability: Management Controls Needed to Strengthen
Demonstration Projects, GAO-08-1053, September 26, 2008.
15 The GAO also identified six SSI demonstration projects, three of which had been cancelled. This CRS report does
not provide information on SSI demonstration projects.
16 This CRS report does not provide any additional information on cancelled projects.
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Security Administration, Annual Report on Section 234 Demonstration Projects, May 2010, May 2010; Social Security
Administration, Annual Report on Section 234 Demonstration Projects, May 2011, May 2011; and Social Security
Administration, Annual Report on Section 234 Demonstration Projects, June 2013, June 2013.
a. The last Youth Transition Demonstration (YTD) project site closed in FY2012; however, the final
comprehensive YTD evaluation report will not be completed until the fourth quarter of FY2014. No
funding was requested for the YTD in FY2014. For more information, see Social Security Administration,
Justification of Estimates for Appropriations Committees Fiscal Year 2015, March 2014, p. 85, http://www.ssa.gov/
budget/FY15Files/2015FCJ.pdf.
Completed SSDI Demonstration Projects
Accelerated Benefits Demonstration
The purpose of the Accelerated Benefits (AB) demonstration project was to test the impact of
providing immediate medical coverage on new SSDI beneficiaries. Under current program rules,
new beneficiaries are not eligible for Medicare coverage for a period of 24 months after receiving
benefits. Evidence shows that the lack of access to medical coverage during the 24-month
Medicare waiting period can have a negative impact on the health, disability status, and
employment of SSDI beneficiaries.17 The demonstration project targeted new SSDI beneficiaries
without any other form of insurance in the hope that by providing them with immediate access to
medical coverage, the agency could increase their prospects for medical improvement and
employment and decrease the amount of time they spend on the benefit rolls.
Participants in the Accelerated Benefits demonstration project were randomly assigned into a
control group, which received no interventions, or one of two treatment groups. The AB treatment
group received comprehensive health insurance, which covers outpatient services, hospitalization,
prescription drugs, and vision and dental care with no premiums. The AB Plus treatment group
received the same health insurance as the AB treatment group as well as additional
interventions.18
An evaluation report released in 2011 by SSA contractor MDRC found that treatment group
members reported fewer unmet healthcare needs than those in the control group and were less
likely than control group members to delay or forgo healthcare for financial reasons.19 In addition,
members of the AB Plus treatment group were more likely than the AB treatment or control
groups to use vocational rehabilitation and return to work services. However, all three groups had
the same employment levels. Moreover, the report noted that it was unlikely that the
demonstration would be cost-neutral to SSA.

17 Gerald F. Riley, “The Cost of Eliminating the 24-Month Medicare Waiting Period for Social Security Disabled-
Worker Beneficiaries,” Medical Care, vol. 42, no. 4 (April 2004), pp. 387-394.
18 AB Plus treatment group members received medical care management services and were given access to
employment and benefits counseling.
19 Charles Michalopoulos et al., The Accelerated Benefits Demonstration and Evaluation Project: Impacts on Health
and Employment at Twelve Months, MDRC, February 2011, http://www.ssa.gov/disabilityresearch/documents/
AB%20Vol%201_508%20comply.pdf.
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Benefit Offset Pilot
The SSA completed a four-state Benefit Offset Pilot demonstration project that was designed to
provide information that the agency could use to implement the Benefit Offset National
Demonstration (BOND). While it was expected that the pilot would yield some information on
the impact of the specific interventions on project participants, the small sample size precluded
any conclusions from this data.20
The Benefit Offset Pilot demonstration used an experimental design in which participants were
randomly assigned to a treatment group that could take advantage of the benefit offset and a
control group that followed the normal rules regarding the treatment of earnings by the SSDI
program. Participants in both the treatment and control groups also received benefits counseling
services provided by the states. Members of the treatment group were able to take advantage of a
benefit offset in which any earnings above substantial gainful activity (SGA) would not result in
termination from the SSDI program but rather reduced the amount of the monthly SSDI benefit.
The SSDI benefit was reduced by $1 for every $2 in earnings in a manner similar to the gradual
reduction of SSI benefits due to earned income. The benefit offset only applied after the trial-
work period was completed.
The primary goal of the Benefit Offset Pilot demonstration project was to inform the SSA on
process issues to assist the agency in its implementation of the national demonstration. In their
evaluations, the states and the SSA found several problems with the processes used to track
participants’ earnings and calculate benefit offsets. In addition to this process information, the
evaluations also showed that the interventions did result in a higher percentage of treatment group
members with earnings above the SGA level. The SSA’s data match also showed that because of
partial payments made to beneficiaries who otherwise would not have received SSDI because of
earnings, there was an overall increase in total benefit spending.21
State Partnership Initiative
The State Partnership Initiative (SPI) was a series of 18 state-level projects, with 12 financed by
the SSA and six by the Department of Education, Rehabilitation Services Administration,
between 1999 and 2004.22 The overall goal of the SPI was to test the impact of a wide variety of
interventions and supports on the employment of SSDI beneficiaries, SSI recipients, and other
persons with disabilities.23
Each of the 12 SPI project states was free to design its own research methodology. Three of the
12 projects used an experimental design and randomly assigned SSDI beneficiaries and SSI
recipients into treatment and control groups with the Oklahoma project having the most rigorous
research design. Other projects attempted to match participants with comparable groups, such as

20 For more information on the Benefit Offset Pilot demonstration, see Social Security Administration, Benefit Offset
Four-State Pilot, http://www.ssa.gov/disabilityresearch/offsetpilot.htm.
21 Social Security Administration, Annual Report on Section 234 Demonstration Projects, May 2011, May 2011
(hereinafter cited as “SSA, Annual Report on Demonstration Projects, 2011”).
22 This report focuses on the 12 SSA-financed projects.
23 For more information on the State Partnership Initiative, see Social Security Administration, State Partnership
Initiative (SPI) Evaluation, http://www.socialsecurity.gov/disabilityresearch/spieval.htm.
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all other beneficiaries, whereas others did not attempt any comparisons of participants and non-
participants.
Each state was free to design its own set of interventions to provide to SPI participants. In its
evaluation of the project, the Virginia Commonwealth University State Partnership Initiative
Evaluation and Information Office (VCU) identified the most common interventions offered by
the states were benefits planning and assistance services, Medicaid waivers or a Medicaid buy-in
program, and services provided through Department of Labor One-Stop centers.24
Each state was required to evaluate its SPI project and these evaluations were synthesized by the
SSA and VCU. Specifically, VCU focused on the three states—New York, New Hampshire, and
Oklahoma—that used experimental design to assess the impact of interventions in these states on
the employment of project participants. VCU found that in New York and Oklahoma, the
proportion of project participants who worked after one year increased by 9% to 18% relative to
the control groups. In New Hampshire, however, the proportion of treatment group members that
worked after one year dropped by 30% from the previous year relative to the control group.
However, despite the increase in the employment rate among participants in two states, the
interventions were found to have either no effect, or a statistically significant negative effect on
the earnings of project participants.
Mental Health Treatment Study
The purpose of the Mental Health Treatment Study (MHTS) demonstration was to determine the
impact of treatment and rehabilitation services on the health and employment of SSDI recipients
with mental disorders.25 In 2012, mental disorders were the primary diagnoses in 18% of new
SSDI awards to disabled workers, and 32% of awards to disabled workers under the age of 50.26
Mental disorders are the second most common diagnosis among all new SSDI beneficiaries and
the most common among workers under 50 years old.27 Mental disorders are also the most
common diagnosis among all current SSDI disabled-worker beneficiaries.28
The number of persons with mental disorders on the SSDI rolls is growing despite the fact that
many mental disorders are treatable. In addition, evidence shows that through a combination of
medical and rehabilitation services, many persons with mental disorders can be fully integrated
into society and can return to employment.29 However, the episodic nature of many mental
disorders requires persons with these conditions to have access to ongoing medical and
employment supports, and these types of supports are not readily available through the vocational
rehabilitation or Ticket to Work systems that are offered to SSDI and SSI beneficiaries. In
addition, the lack of health coverage during the first 24 months on the SSDI rolls, as well as gaps

24 Virginia Commonwealth University State Partnership Initiative Evaluation and Information Office, Conclusions
Drawn from the State Partnership Initiative, May 2006, p. 26.
25 SSA, Annual Report on Demonstration Projects, 2011.
26 Social Security Administration, Annual Statistical Report on the Social Security Disability Insurance Program, 2012,
November 2013, Tables 40 and 41, http://www.ssa.gov/policy/docs/statcomps/di_asr/.
27 Ibid.
28 Ibid., Table 21.
29 For a review of this evidence, see Laudan Aron, Martha Burt, and David Wittenburg, Recommendations to the Social
Security Administration on the Design of the Mental Health Treatment Study (MHTS) (Washington: The Urban
Institute, 2005).
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in the provided Medicare coverage, leaves some SSDI recipients with mental disorders unable to
access the care they need.
The MHTS used an experimental design with random selection of participants into treatment and
control groups. Selected by the SSA for the project, demonstration participants were drawn from
22 geographic areas and consisted of adult SSDI recipients diagnosed with either schizophrenia
or an affective disorder and who indicated a desire to work. Participants selected for the control
group received no interventions, but were exempted from having the SSA perform a Continuing
Disability Review (CDR) of their status while they were participating in the demonstration.
Members of the treatment group received the same protection from CDRs as well as a customized
set of medical and employment supports provided by private-sector providers who were
reimbursed for their services by the SSA. These medical services were to be based on the
individual needs of the beneficiaries and consisted of both outpatient pharmaceutical and
psychotherapeutic treatments and were to be coupled with other traditional employment supports.
The primary contractor for the MHTS was Westat and a final report on the demonstration project
was presented to the SSA in July 2011. According to the report, the combination of medical and
employment supports resulted in better outcomes for the treatment group relative to the control
group.30 For instance, the treatment group experienced employment rates 21 percentage points
higher than the control group and exhibited a significant improvement over the control group in
mental health status.31 In addition, the treatment group earned more, worked longer hours, and
showed a significant improvement over the control group in terms of quality of life.
However, the study found that only 8% of all participants (both treatment and control) earned
above SGA over a 24-month period.32 In June 2013, the SSA noted that MHTS services had “no
impact on increasing SGA or on reducing SSDI benefit payments among beneficiaries.”33
Youth Transition Demonstration
The purpose of the Youth Transition Demonstration (YTD) was to determine if waiving SSI
income and asset rules and providing coordinated employment support services to younger SSI
and SSDI beneficiaries would ease the transition of these beneficiaries into adulthood and result
in an increased likelihood that they will leave the benefit rolls because of work. The YTD
expanded on earlier work by the SSA to determine the impact of providing coordinated benefits
planning and transition services, as well as SSI program waivers that allow beneficiaries to build
savings on the post-education employment activities of transition-aged disability beneficiaries.
The YTD used an experimental design to test the impact of a series of interventions on transition-
age disability beneficiaries. The SSA selected six sites in five states to conduct the demonstration,
and at each site, a local or state agency or organization under contract with the SSA designed and

30 William D. Frey et al., Mental Health Treatment Study: Final Report, Westat, July 2011, p. EX-7,
http://www.ssa.gov/disabilityresearch/documents/MHTS_Final_Report_508.pdf.
31 Ibid. The 24-month employment rate for the treatment group was 61%, while the employment rate for the control
group was 40%.
32 Ibid., p. 9-6
33 Social Security Administration, Annual Report on Section 234 Demonstration Projects, June 2013, p. 13,
http://www.ssa.gov/disabilityresearch/demos.htm (hereinafter cited as “SSA, Annual Report on Demonstration
Projects, 2013”).
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provided a package of coordinated benefit and employment supports. Demonstration participants
were randomly assigned to either a control group or a site-specific treatment group. Members of
the control group received no interventions. All members of the site-specific treatment groups
received conditional SSI waivers, as well as interventions to provide better-coordinated
employment, education, and benefit planning supports.34 Common features among the YTD
interventions were benefits counseling, navigation services, and employment services such as
assistance with job searches.
Phase One projects (Colorado; Bronx Co., NY; and Erie Co., NY) finished providing services to
participants in 2009, while Phase Two projects (Miami-Dade Co., FL; Montgomery Co., MD; and
West Virginia) finished providing services in March 2012. Final reports on each YTD project are
expected in August 2014.35
Preliminary reports suggest that the YTD interventions from some Phase One and Phase Two
projects improved employment and earnings outcomes among program participants in the first
year after random assignment.36 For example, in West Virginia, 43% of the treatment group
worked for pay, compared with 24% of the control group.37 In addition, treatment group
participants in the West Virginia program earned roughly 51% more than the members of the
control group did.38 In the second year after random assignment, however, the share of the
treatment group that worked for pay declined for five of the six projects, including West
Virginia.39 Because many program participants are under the age of 18 or still in school, the long-
term effects of the YTD interventions on employment outcomes and benefit receipt remain
inconclusive.40

34 Treatment group members received the following conditional SSI waivers: (1) continued SSI benefits even if a
continuing disability review finds the participant is no longer disabled; (2) eligibility for the student earned income
exclusion for all students regardless of their marital status or age; (3) an earned income exclusion of the first $65 in a
month and 75% of any additional earnings; (4) eligibility to place money in an Individual Development Account and
have that money exempted from SSI resource rules; and (5) liberalized Plan for Achieving Self-Sufficiency (PASS)
account rules that allow for career exploration or post-secondary education to serve as employment goals.
35 John Martinez, Michelle S. Manno, and Peter Baird, et al., The Social Security Administration’s Youth Transition
Demonstration Projects: Profiles of the Random Assignment Projects, Mathematica Policy Research, December 11,
2008, p. 82, http://mathematica-mpr.com/publications/PDFs/SSA_YTD.pdf.
36 Thomas Fraker, The Youth Transition Demonstration: Lifting Employment Barriers for Youth with Disabilities,
Mathematica Policy Research, Issue Brief: Number 13-01, February 2013, pp. 1-4, http://www.mathematica-mpr.com/
publications/PDFs/disability/YTD_Brief13-01.pdf. Of the Phase Two projects, Miami-Dade Co., FL and West Virginia
had statistically significant positive impacts on both paid employment and total earnings. Of the Phase One projects,
Bronx Co., NY had a statistically significant positive impact on paid employment.
37 Thomas Fraker et al., The Social Security Administration’s Youth Transition Demonstration Projects: Interim Report
on West Virginia Youth Works, Mathematica Policy Research, December 3, 2012, p. xix, http://www.ssa.gov/
disabilityresearch/documents/WV%20YTD%20Report%2012-3-2012.pdf.
38 Ibid., p. xx.
39 Jeffrey Hemmeter, “Earnings and Disability Program Participation of Youth Transition Demonstration Participants
after 24 Months,” Social Security Bulletin, vol. 74, no. 1 (February 2014), http://www.ssa.gov/policy/docs/ssb/v74n1/
v74n1p1.html.
40 See SSA, Annual Report on Demonstration Projects, 2013, p. 5.
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Social Security Disability Insurance (SSDI) Demonstration Projects

Ongoing SSDI Demonstration Projects
Benefit Offset National Demonstration
The purpose of the Benefit Offset National Demonstration (BOND) is to determine the impact of
a graduated benefit offset program on the employment of SSDI beneficiaries. Under this
graduated benefit offset program, SSDI beneficiaries who work in a given month have their
benefits reduced at a rate of $1 for every $2 in earnings above the SGA level. This type of
graduated benefit offset is already used in the SSI program. In addition to the graduated benefit
offset, demonstration participants are provided with enhanced benefits counseling.
The current SSDI and SSI programs differ in their treatment of the work activity and earnings of
beneficiaries. Under SSI program rules, one half of all earned income in a month is counted by
the SSA and used to reduce a beneficiary’s monthly benefit payment, effectively allowing an SSI
beneficiary to earn over twice as much as the maximum benefit rate and still collect some cash
benefits. Under SSDI program rules, any earnings above the SGA level in a given month, after
the completion of the Trial Work Period, result in a loss of all cash benefits, a situation that is
commonly referred to as the “cash cliff.”
This cash cliff is considered a significant barrier to the return to work efforts of many SSDI
beneficiaries, as it provides a financial disincentive to earn above the SGA level.41 It is posited
that removing this cliff through a graduated benefit offset and providing a package of additional
employment supports will encourage demonstration project participants to attempt to return to the
workforce with the ultimate goal of full-time work and independence from the disability rolls.
Stage One of the BOND was designed to test the impact of a $1 for $2 benefit offset on SSDI
beneficiary earnings and employment outcomes. Approximately 77,100 SSDI-only and
concurrent SSDI and SSI beneficiaries were randomly selected into a single treatment group that
participates in the benefit offset, while approximately 891,600 beneficiaries were selected for the
control group. Stage Two of the BOND was designed to test the impact of the interaction of the
benefit offset with enhanced work incentives counseling. Approximately 238,100 SSDI-only
participants were identified as eligible to participate in Stage Two. From that group,
approximately 12,900 beneficiaries volunteered for the demonstration and more than 4,900 of
these volunteers were randomly assigned to the control group. Of the remaining volunteers,
nearly 3,100 were randomly assigned to participate in the benefit offset only and more than 4,900
were randomly assigned to participate in the benefit offset and receive enhanced work incentives
counseling. Random assignment for Stage Two occurred between March 1, 2011, and September
28, 2012.42

41 For more information on the “cash cliff,” see Jody Schimmel, David C. Stapleton, and Jae G. Song, “How Common
is ‘Parking’ among Social Security Disability Insurance Beneficiaries? Evidence from the 1999 Change in the Earnings
Level of Substantial Gainful Activity,” Social Security Bulletin, vol. 71, no. 4 (November 2011) http://www.ssa.gov/
policy/docs/ssb/v71n4/v71n4p77.html.
42 Daniel Gubits et al., BOND Implementation and Evaluation: Stage 2 Early Assessment Report, Abt Associates Inc.,
Deliverable 24a.2, August 6, 2013, p. 6, http://www.ssa.gov/disabilityresearch/documents/
BOND_Deliverable%2024a2_3rd_revision_8-6-2013.pdf (hereinafter cited as “Daniel Gubits et al., BOND
Implementation and Evaluation: Stage 2 Early Assessment Report”).
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Social Security Disability Insurance (SSDI) Demonstration Projects

SSA contractor Abt Associates Inc. plans to provide future reports on the annual progress for
Stage Two activities in 2014-2017, as well as two additional implementation reports in 2014 and
2016. A final synthesis report for Stages One and Two is expected in 2017.43
In August 2013, the Social Security Advisory Board (SSAB) released a position paper calling for
the early termination of the BOND.44 The SSAB cited the implementation problems associated
with the Benefit Offset Pilot demonstration and the BOND’s low take-up rate as evidence that the
BOND will likely fail to increase beneficiary return-to-work rates in a cost effective manner.45
Moreover, the SSAB noted that due to administrative changes to the BOND following the
implementation of the Benefit Offset Pilot demonstration, the BOND research design “will be
unable to discriminate between results due to the offset or program simplification.”46 Instead, the
SSAB recommended discontinuing further spending on the BOND, which the board estimated at
approximately $53.1 million for FY2013-FY2015.

43 Daniel Gubits et al., BOND Implementation and Evaluation: Stage 2 Early Assessment Report, p. 2.
44 Social Security Advisory Board, The Case for Terminating the Benefit Offset National Demonstration, August 2013,
pp. 1-4, http://www.ssab.gov/REPORTS/BOND_PrePublication.pdf (hereinafter cited as “SSAB BOND Position Paper
2013”).
45 Ibid. As of April 22, 2013, the percentage of Stage Two treatment subjects using the benefit offset was 4.0%. For
more information, see Daniel Gubits et al., BOND Implementation and Evaluation: Stage 2 Early Assessment Report,
p. 69.
46 SSAB BOND Position Paper 2013, p. 3.
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