Navigating the Benefits Cliff: The Role of Benefit Eligibility in the Decision to Work and More for People With Disabilities in New York State

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November 2, 2023

Leigh Wedenoja
Laura Schultz
Ryan Wilcox


People with disabilities face substantial barriers to employment and limitations in both the jobs they can take and the hours that they can work. Only two in five working-age adults with a disability participate in the labor force compared to four in five of those without a disability. Among those employed, only 62 percent work on a full-time basis compared to 75 percent of their peers without a disability. One under studied barrier to employment is benefits eligibility rules. Nearly 9.4 million working-age individuals with a disability receive cash payments through the Social Security Administration (SSA). Those cash payments are in part means-tested, which means the higher a person’s income, the lower the benefit to which they are entitled. For a person with a disability, the more they work, the lower those stable cash benefits will be. Eligibility for SSA cash benefits also allows recipients access to health insurance through Medicare or Medicaid, which is often crucial to people with disabilities navigating complex health conditions.

This brief discusses the role the social safety net and the benefits cliff plays in the employment decisions of people with disabilities. First, is a general overview of the social safety net and benefits cliff then a discussion of the employment status of people with disabilities in New York, including a working definition of disability and survey data on the employment of people with disabilities and their peers without disabilities. This is followed by an in-depth discussion of the main benefits available to people with disabilities: Supplemental Social Security Income (SSI) and Social Security Disability Insurance (SSDI), including their eligibility rules and enrollment process. The discussion of benefits programs concludes by examining the relationship between SSI and SSDI with their associated health insurances: Medicaid for SSI and Medicare for SSDI and a discussion of other benefits commonly used by people with disabilities including the Earned Income Tax Credit (EITC), the Supplemental Nutritional Assistance Program (SNAP), the Section 8 Housing Choice Voucher (HCV), the Home Energy Assistance Program (HEAP), and the Weatherization Assistance Program (WAP).

The brief concludes with a discussion of three simplified theoretical examples of the tradeoffs an individual with disabilities may make when deciding whether to be employed and how much to work. The goal is to highlight the sometimes complicated intersection of different benefits and employment choices. There are separate examples of the intersection of employment with SSI and SSDI. The section explores three work arrangements in each case: not working at all, working at $15 per hour for 15 hours per week, and working at $20 per hour for 30 hours per week. The brief then concludes with a discussion of a potential policy research agenda.

Read the full policy brief.