Employment Rehabilitation Services in Michigan

Chapter 2


Rehabilitation Services Legislation

The Rehabilitation Act of 1973,[1] as amended, authorizes over $2 billion in Federal support for training and placing persons with mental and physical disabilities into full-time, part-time, or supported employment. The program is a joint State and Federal effort, with the Federal Government providing 80 percent of the funding to State vocational rehabilitation programs, and States providing the remaining 20 percent.

The origins of the Federal-State rehabilitation program can be traced back to 1920 when Congress enacted the National Vocational Rehabilitation Act of 1920, the first civilian program assisting persons with disabilities in regaining work skills. Since that time, the act has been gradually expanded to include services to persons with a wide array of disabling conditions, and, in recent years, to focus increased attention on the need of individuals with severe disabilities. Specifically, the Rehabilitation, Comprehensive Services and Developmental Disabilities Amendments of 1978[2] placed a stronger emphasis on provision of rehabilitation services to clients with severe disabilities.

Title I of the Rehabilitation Act of 1973[3] authorizes formula grants to designated State vocational rehabilitation agencies to provide services to rehabilitate persons with disabilities. In fiscal year 1997, $2.1 billion was appropriated by Congress for vocational rehabilitation programs throughout the United States under the act. Of that amount, the Michigan Jobs Commission, Rehabilitation Services (MJC–RS) received $66.9 million and the Michigan Commission for the Blind (MCB) was allocated $9.1 million. During fiscal year 1998 the Federal appropriation for vocational rehabilitation services was $2.2 billion, with $67.3 million allocated to the MJC–RS and $9.1 to the MCB.

The Federal-State vocational rehabilitation program is an eligibility-based program, not an entitlement program. To receive vocational rehabilitation services, an individual must meet three eligibility criteria. First, the individual must have a disability that causes an impediment to employment.

The second criterion is the presumption of employability. This criterion is a major change made by Congress in the 1992 amendments to the act. Prior to that date, State vocational rehabilitation agencies determined whether a person could benefit from vocational rehabilitation services. Congress determined in 1992 that that particular eligibility criterion was weeding out individuals with severe disabilities on the assumption that, in fact, they were too severe to be employable. So in 1992, Congress said State vocational rehabilitation agencies will assume that everybody who has a disability can work. The onus was placed on the State vocational rehabilitation agencies to rebut that presumption.

The third eligibility criterion is that the individual requires vocational rehabilitation services in order to become employed. In Michigan the MJC–RS and MCB provide services to individuals who have difficulty preparing for, obtaining, or retaining employment.

Title II of the act establishes the National Institute on Disability and Rehabilitation Research (NIDRR).[4] Title III of the act authorizes grants and loans to cover the cost of constructing rehabilitation facilities and to support training projects designed to increase the numbers of qualified personnel available to provide services to persons with disabilities. Title IV authorizes the establishment of an independent National Council on Disability.[5] The council and its staff are charged with reviewing all Federal statutes related to persons with disabilities. Title V advances employment opportunity for individuals with disabilities with the Federal Government. Title VI establishes programs aimed at enhancing employment opportunities for persons with disabilities in such areas as community service employment and funding joint projects with industry. Title VII of the Rehabilitation Act authorizes several programs aimed at assisting persons with mental, physical, and sensory disabilities in achieving and maintaining independent living.[6]

The Rehabilitation Act of 1986[7] amended the definition of a “severe handicap” to include functional as well as categorical criteria.[8] In addition, a definition of “employability” was inserted in the act for the first time, to clarify that part-time work is a viable outcome of rehabilitation services.[9] Prior to 1986, each State vocational rehabilitation agency exercised its own discretion in determining whether a person was employable, and thus qualified for rehabilitation services.

In addition, the 1986 amendments required the States not only to provide evidence that they have policies governing the order in which clients are selected for services, but also to justify these policies. Moreover, the amendments added a new supplementary formula grant program under which the States were authorized to conduct interagency collaborative projects to provide supported employment services to persons with severe disabilities.

The Rehabilitation Act Amendments of 1992[10] mandated that priority in service be provided to individuals with the most severe disabilities. In implementing the act, States interpret who are the individuals with the most severe disabilities. Under the act, priority in service must be given to those individuals with the most severe disabilities, especially if the State follows an order of selection for services. In addition, because consumer and advocacy groups expressed concern that State agencies were not serving those individuals with the most severe disabilities, the 1992 amendments established a presumption that any individual can benefit from vocational rehabilitation services to reach an employment outcome.

State Rehabilitation Services

Michigan Rehabilitation Services (MRS) is the primary State agency that helps eligible persons with disabilities prepare for, find, and retain employment. MRS is a division of the Michigan Jobs Commission. There are 37 MRS offices throughout the State.

A person with a disability is eligible for MRS services if the disability causes substantial problems in getting or keeping a job. The individual must need vocational rehabilitation services in order to work. All applicants for MRS services are presumed able to work. Persons who are legally blind are served by the Michigan Commission for the Blind.

Provision of MRS services is based on the availability of State and Federal funds. Clients with the most severe disabilities are served first when MRS is unable to serve all eligible clients. MRS provides medical and vocational evaluations, counseling, job placement, and followup services free of charge. Other services are coordinated through public and private agencies in the community. If financially able, clients are expected to help pay for part of the services they receive. The core services provided directly by MRS for persons with disabilities include: 

MRS also provides services purchased through outside organizations. These may include:

In addition, MRS provides services to businesses either directly, contractually, or by fee for service so as to increase employment opportunities for persons with disabilities. Such programs include:

In fiscal year 1997 the number of persons with disabilities served by MJC–RS was 40,292.[11] The number of persons with disabilities assisted into jobs by MJC–RS was 6,591. The average time for an individual to be in the program was 20 months.[12] The percentage of persons served by MJC–RS by disability category is indicated in table 2.

The annual budget for MJC–RS in fiscal year 1997 was $89,150,744. The agency receives 80 percent of its funding from the Federal Government, either through grants under title I of the Rehabilitation Act of 1973 ($65,834,659), Social Security Administration funds ($1,845,775), or other Federal funding sources ($3,459,699). The State provides only 10 percent of the agency’s funding ($9,531,180), and local matching funds, which are almost 9 percent of the agency’s budget ($7,726,512), nearly equal the State’s contribution.[13] Table 3 shows MJC–RS funding sources.

Table 2
Persons Served by MJC–RS by Disability, FY 1997





Mental retardation


Mental illness


Learning disabilities


Hearing impairment


Alcohol and drug dependence


Other mental/emotional disabilities


Visual impairments




Other disabilities


Source: Michigan Jobs Commission-Rehabilitation Services.

Table 3
MJC–RS Funding Sources

Category                                                                                         Expenditure

Federal basic funding support



Other Federal support



Social Security Administration



State general funds



Local matching funds



Fee for service



Funds from other State depts.






Source: Michigan Jobs Commission-Rehabilitation Services. FY 1997 figures, the most recent available.

Federal Monitoring of Rehabilitation Services

The Rehabilitation Services Administration (RSA) was established within the Department of Health, Education, and Welfare by the Rehabilitation Act of 1973. The RSA was delegated the responsibility for administering all rehabilitation programs authorized under the act. The RSA was later transferred to the Department of Education under the terms of the Education Organization Act, where it remains today.[14] 

The Rehabilitation Act Amendments of 1992 primarily amended the 1973 rehabilitation statute by focusing on accountability. The amendments contain a new requirement for evaluation standards and performance indicators for State rehabilitation service programs. Section 107 of the act requires the RSA to conduct annual reviews and monitoring of established standards and measures. During fiscal year 1996 and again in fiscal year 1997, the RSA review focused on MJC–RS achievement in three areas:

In addition to the three focus areas, the RSA also reviewed performance of the MJC–RS in the areas of (1) due process, (2) consumer satisfaction, (3) order of selection, (4) budget and financial management, and (5) reporting. The RSA’s evaluation of the agency’s service to persons with severe disabilities and its service and outreach to the minority community are of particular relevance to this study.

Regarding service by the MJC–RS to persons with severe disabilities, the RSA monitoring report reads:

Persons in Michigan with severe disabilities achieved competitive employment at a percentage rate of 91.4 percent for all rehabilitants in competitive employment. The difference of 1.2 percent was the largest difference between those with severe disabilities and all others who achieved competitive employment. Persons with nonsevere disabilities may require fewer services, achieved within a shorter time, and have a greater degree of independence in seeking employment than those with severe disabilities that may account for the difference.[15]

Regarding outreach by the MJC–RS to minorities and rehabilitation rates for persons from minority backgrounds, the RSA monitoring report reads:

MRS has heeded the recommendation made in the RSA final report on the comprehensive review of MRS, “to continue to improve uniformity of intensive outreach efforts already underway in areas of high minority concentration” by forming a Minority Rehabilitation Issues Task Force. . . . 

MRS achieved a rehabilitation rate of 62.1 percent for all severe cases for FY 1995. In comparison, African Americans in the Michigan Rehabilitation program achieved only a rehabilitation rate of 53.32 percent and American Indians achieved a rate of only 49.21 percent. While the African American rate is within 10 percentage points usually identified as acceptable, in Michigan this tends to be a significant number of our customers who are achieving at less than the average rate. The rate for American Indians is considered significant. 

In an attempt to respond to the data suggesting service inequities for minority populations in the Rehabilitation Act Amendments of 1992, MRS provides service in ways that will meet the needs of our minority customers. All MRS staff have received training in cultural diversity awareness and MRS developed and implemented a multicultural policy several years ago. MRS convened a multicultural/diversity committee to develop a plan for recruiting candidates from minority backgrounds to staff position. As a result the MRS staff is becoming more diverse. This relates to increased satisfaction of our customers from minority backgrounds if they have a counselor who can speak to them in their own language and relates to their cultural differences. MRS has established a new committee, the Minority Issues Committee, to bridge the successful outcome gap that exists between the minority and majority client populations. This committee will become implementation focused to drive action in resolving the differences in outcomes between minority and nonminority outcomes. MRS has developed a cash match agreement with Hannahville Indian Reservation to provide outreach and ensure this population receives the unique and sufficient services to achieve employment. 

MRS will continue to develop, expand, and replicate programs aimed at minority outreach and inclusion in all priorities such as transition services through community development, liaisonships and grant resources. . . .

Case service costs vary from one ethnic background to another, from one disability group to another with no one ethnic group maintaining dominance across the table. Asian closures have significantly higher case costs as a total group, resulting primarily from costs associated with orthopedic cases being five times the case costs for American Indians, four and a half times the costs for African Americans and three times the cost for Caucasians. A low number of individuals received extraordinarily high cost services. African Americans had higher case costs for amputations and mental retardation cases and hearing impairment cases than other groups due to various reasons. An increasing number of hearing disabilities in this population with fewer opportunities to seek comparable benefits may be a factor. The high cost of absence of limbs cases may result from fewer opportunities for comparable benefits and a high referral rate from a Detroit rehabilitation hospital of complex high cost cases. The low cost of substance abuse case costs for African Americans may result from an initiative beginning in 1994 to develop closer partnerships with substance abuse agencies. The initiative resulted from a Federal grant to the state to provide Drug Abuse and Alcohol Referral Monitoring. 

Training was provided to MRS counselors and the substance abuse staff in their communities and a product of this training was a formalized agreement to work together, develop referral procedures and coordinate services for increased services to this disability group and a cost savings for both agencies. Many of these efforts were focused on the areas of the state with a high African American population. In all areas, American Indian case costs were lower than all or most of the other minority groups or the nonminority group. This will be an area addressed by the Minority Issues Committee to develop the appropriate resolution.[16]

The RSA monitoring report compares the costs of services for cases successfully closed by disabling conditions for minorities with severe disabilities and nonminorities:

The relationship of case costs [for minorities] by disability groups compared with the costs for nonminority cases compares similarly for those with severe disabilities as with all disabilities. There is no significant variance identified according to severity of disability.[17]

Definitions of Disability

Title I of the Rehabilitation Act of 1973, as amended, requires service providers to give priority to clients with the most severe disabilities. The act further requires that in the event that vocational rehabilitation services cannot be provided to all eligible individuals with disabilities in the State who apply for the services, an order of selection for vocational rehabilitation services will be established with individuals with the most significant disabilities being selected first for the provision of vocational rehabilitation services.[18]

Under the act, an “individual with a disability” means any individual who:[19]

(a) has a physical or mental impairment that constitutes or results in a substantial impediment to employment; and
(b) can benefit in terms of an employment outcome from vocational rehabilitation services. . . .[20]

An “individual with a significant disability” means an individual with a disability who:[21]

(i) has a severe physical or mental impairment which seriously limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) in terms of an employment outcome;
(ii) whose vocational rehabilitation can be expected to require multiple vocational rehabilitation services over an extended period of time; and
(iii) who has one or more physical or mental disabilities resulting from amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, respiratory or pulmonary dysfunction, mental retardation, mental illness, multiple sclerosis, muscular dystrophy, musculo-skeletal disorders, neurological disorders (including stroke and epilepsy), paraplegia, quadriplegia, and other spinal cord conditions, sickle cell anemia, specific learning disability, end-stage renal disease, or another disability or combination of disabilities determined on the basis of an assessment for determining eligibility and vocational rehabilitation needs described in subparagraphs (A) and (B) of paragraph (2) to cause comparable substantial functional limitation.[22]

Under the Rehabilitation Act of 1973, as amended, the term “employment outcome” means:

(a) entering or retaining full-time or, if appropriate, part-time competitive employment in the integrated labor market;
(b) satisfying the vocational outcome of supported employment; or
(c) satisfying any other vocational outcome the Secretary determines to be appropriate in a manner consistent with the Act.[23]

[1] P.L. 93-112 as amended by P.L. 93-516, P.L. 94-230, P.L. 96-374, and P.L. 99-506, 29 U.S.C. §§ 701–703.

[2] P.L. 95-602.

[3] Title I, Rehabilitation Act of 1973, P.L. 93-112.

[4] 29 U.S.C. § 762.

[5] 29 U.S.C. § 780.

[6] Section 13 of the Rehabilitation Act of 1973, as amended, requires an annual report to the President and the Congress on Federal activities related to the Rehabilitation Act of 1973, as amended. The report is organized following the titles and sections in the act and contains data from various reports required in the act and its regulations. 

[7] P.L. 99-506.

[8] 29 U.S.C. § 706(h).

[9] 29 U.S.C. § 701(6).

[10] P.L. 102-569.

[11] Michigan Jobs Commission, Rehabilitation Services, “Program Facts and Figures,” 1998. FY 1997 figures are the most recent available. 

[12] Ibid.

[13] Ibid.

[14] P.L. 96-88.

[15] Rehabilitation Services Administration, U.S. Department of Education, FY 1997 Annual Monitoring Review: Michigan Rehabilitation Services, September 1997, p. 6.

[16] Ibid., pp. 11–12.

[17] Ibid., p. 13. 

[18] Title I, Rehabilitation Act of 1973, as amended, § 105.

[19] 29 U.S.C. § 705(20).

[20] Ibid., § 7.

[21] 29 U.S.C. § 705(11).

[22] Ibid.

[23] Ibid.