Transition to Work Act of 1997

Transition to Work Act of 1997 - Directs the Commissioner of Social Security to establish a demonstration Transition to Work Program (TWP) as a demonstration project in appropriate localities to determine the best practicable means of providing certain eligible individuals entitled to disability benefits under title II (Old Age, Survivors and Disability Insurance) of the Social Security Act (SSA) (social security disability benefits) prompt access to vocational rehabilitation services in order to move them to work. Requires each certified participating vocational rehabilitation service provider (which may be public or private) to develop a transition to work plan jointly with an individual (and subject to his or her approval), taking into account an employment evaluation. Includes in TWP the Ticket for Work Opportunity (TWO) Program under which the Commissioner issues a TWO to an eligible disabled individual to present to a provider for payment for the services rendered which result in a successful return to work.

Outlines provider certification requirements.

Amends the Internal Revenue Code to: (1) allow a refundable tax credit (adjusted for inflation and subject to eventual phaseout) for a specified percentage of earned income to an eligible disabled individual whose social security disability entitlement has ceased because of ability to engage in substantial gainful employment; and (2) provide for advance payment of such disabled worker credit by the individual's employer.

Amends SSA titles II and XVIII (Medicare) to: (1) provide for an additional two years of Medicare continuation coverage after an individual first leaves the social security disability roll to return to work; and (2) provide that afterwards (Medicare would now continue for a total of six years after the individual first began to work) such individuals who retained employment and made over $15,000 per year would be allowed to buy-in to Medicare part A (Hospital Insurance) based on a capped, income-related premium, with those earning less than $15,000 per year continuing to get Medicare part A coverage free.