Can we handle benefits better?

The way we handle cut off points for denying benefits seems counter-productive. Example: Social Security disability benefits. Assume you are receiving benefits but decided to try to go back to work. You are allowed to work so much but once you achieve a certain point you lose all benefits. This is an incentive not to work unless the new individual income is greater than the current benefits receiving plus taxes paid on the new income plus the cost of working. The cost of working includes possible increased costs in transportation, clothing, meals, baby-sitting, etc, plus the lost of time.

A better system would be a partial cut in benefits. For example for each additional $3 earn, a $1 decrease in benefits. This would provide an incentive to work while also decreasing the cost to agency. In this case the agency actual cost is decreased by $1, plus $0.45 ($3 *15% combined SS tax, individual and company match). And if they person is "wealthy"enough, the state and federal government will also receive income tax.


Links:
substantial gainful activity (SGA)

trial work period