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Subsidized Earnings - Letter From Employer


There are times when employers subsidize the income of people returning to work -- paying more than the work they're doing is worth.

If your earnings are subsidized, Social Security does not count the amount of the subsidy as income.

If you work and allege that you are being subsidized by your employer, Social Security will request verification from your employer before reducing your earnings by the amount of the subsidy.

The statement from your employer concerning the part of your earnings which were subsidized should include answers to the following questions:

  • Need for Services. (Omit if Employer Is a Sheltered Workshop.)
  • Why was the individual hired?
  • What are the individual's job duties?
  • How much time does the individual spend on those duties?
  • Who performed the duties before the individual was hired; and how much time did that person spend on those duties?
  • If the individual were separated from the job, would he/she be replaced; if so, how much time would the replacement spend on the individual's duties?
  • How often is the individual absent from work?
  • Does someone else do the individual's work when he/she is absent?
  • How much time does the temporary replacement take to do the individual's job?
  • What is the relationship of pay to services?
  • How are the individual's total earnings computed?
  • Is the individual's pay reduced proportionately when he/she is absent from work? (Compare the employer's practice concerning an individual with an impairment to that of an unimpaired individual, explaining any difference.)
  • Does the individual receive any unusual assistance or supervision? (Describe.)
  • If the individual's pay is not set according to normal business practices, what consideration is given to the size of the individual's family, number of years of past service with the employer, previous earnings, friendship or relationship to the employer, or other factors unrelated to the performance of the work?
  • Does the employer consider the individual's work to be worth substantially less than the amount paid and, if so, what are the employer's reasons for this view? (Give the employer's estimate of the value of the services and explain how this estimate was reached.)
  • If the individual is still on the payroll, despite unsatisfactory work, what is the employer's reason for retaining him/her?
  • If the individual is no longer employed, what led to the termination of employment?

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