HR7120-119

What This Bill Does

The Purple Heart Freedom to Work Act changes Social Security Disability Insurance work rules for beneficiaries whose disability is attributable to an injury for which they received the Purple Heart. Such a beneficiary is deemed to remain entitled to the monthly disability insurance benefit without regard to the usual termination month, but the monthly payment is reduced by $1 for each $4 of earnings above the substantial-gainful-activity amount for that month and cannot be reduced below zero. Benefits payable under section 202 based on the wages or self-employment income of the beneficiary are reduced by the same proportion. The amendments apply to benefits payable for months beginning six months after enactment.

Who Benefits and How

Purple Heart recipients with service-connected combat injuries, disabled veterans returning to work, military families receiving auxiliary benefits, veterans service organizations, and employers hiring disabled veterans benefit because beneficiaries can attempt substantial work without the usual cliff that ends disability entitlement. SSA field offices benefit from a formula that phases payments down instead of fully terminating entitlement.

Who Bears the Burden and How

The Social Security Administration, disability examiners, payroll verification staff, employers reporting earnings, and beneficiaries must track earnings above the substantial-gainful-activity threshold and calculate $1-for-$4 reductions. Federal disability trust funds may pay benefits for longer than under current termination rules, while affected family members may see proportional reductions when the worker's benefit is reduced.

Key Provisions

• Provides continued SSDI entitlement for beneficiaries whose disability is attributable to a Purple Heart injury.
• Requires a $1 benefit reduction for every $4 of earnings above the substantial-gainful-activity amount.
• Limits reductions so the monthly disability benefit cannot fall below zero.
• Requires related family benefits to be reduced by the same proportion as the worker's benefit.
• Applies the change to benefits payable for months beginning six months after enactment.