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Happy Birthday, SSI: A Safety Net for Vulnerable Americans

Posted: 10/30/2012 12:21 pm

Today marks the 40th anniversary of the Supplemental Security Income (SSI) program. Signed into law by President Richard Nixon in 1972, SSI provides critical benefits to about 8 million Americans who are elderly, blind, or disabled. SSI plays a crucial role in reducing poverty and helping these vulnerable individuals meet their basic needs and avoid homelessness. Along with Medicaid, SSI is a vital support that enables people with disabilities to live in the community, instead of in costly and isolating institutions.

SSI replaced a patchwork of existing federal-state programs that provided aid to the elderly and people who are blind or have disabilities. In his signing statement, President Nixon noted that people receiving benefits under these programs were "subject to great inequities and considerable red tape inherent in the present system of varying State programs with different benefits, eligibility standards, and rules." A federal study of SSI's implementation found that "the quality of life of the aged and disabled who are poor has improved greatly since they were transferred to SSI from former state programs."

Until the 1960s, people with disabilities typically lived in large state-run institutions, isolated from their families and communities. In a 1962 survey, 71 percent of the public said that people with develop­ment disabilities should be cared for in institutions rather than at home. American attitudes have changed since then, and we have shifted away from institutional care for people with disabilities, to family and community-based care.

Harvin, a 54-year-old resident of Philadelphia, is just one example. He has severe bipolar disorder with frequent major depressive episodes and hallucinations. He was homeless for a number of years, and was beaten up multiple times while sleeping on the streets. The support from SSI has enabled him to get off the streets and into safe and stable housing, and to get back into mental health treatment. Harvin said, "SSI has given me the opportunity to have dignity, pride, and respect. SSI is a blessing."

A CRITICAL LIFELINE FOR SENIORS AND PEOPLE WITH DISABILITIES.

A person must be 65 or older or have a severe disability, and also have extremely limited income and assets to qualify for SSI. The disability standard is so strict that less than 40 percent of SSI disability applicants are awarded benefits.

Benefits are modest. The maximum SSI benefit is $698 per month for 2012 -- about 75 percent of the federal poverty level for a single person -- but the average benefit is just about $520 per month. For about three-fifths of beneficiaries, SSI provides their sole source of income. While modest, these benefits are critical to reducing poverty among the elderly and people with disabilities.

In December 2002, 41 percent of SSI recipients lived in extreme poverty (less than half the federal poverty level) without counting their SSI income. Nearly three-quarters of these beneficiaries saw their incomes increase to between 50 and 99 percent of the poverty line when their SSI income was counted.

For such an effective anti-poverty support, SSI represents a very small share of the federal budget. Spending on SSI benefits, about $49 billion in 2011, represents just about 1.4 percent of the federal budget and .32 percent of GDP. Spending on SSI payments as a share of GDP is expected to tick down after 2014, and decline to .25 percent of GDP by 2036.

VITAL SUPPORT FOR CHILDREN WITH DISABILITIES.

About 1.25 million children with disabilities receive SSI. The standard for childhood disability is strict -- most children who apply are denied, and less than one quarter of children with disabilities in the U.S. receive benefits.

Raising a child with a disability is expensive. These high costs lead many families caring for a disabled child to experience serious material hardships. Over 70 percent of low-income families with disabled children experience hardships like running out of food or skipping meals, having phone service shut off, postponing needed medical care, being unable to pay rent, and being at risk of homelessness. SSI helps families provide for their children's basic needs, such as food, clothing and shelter; replaces some lost parental income due to caregiving responsibilities, and offsets some of the additional costs of raising children with disabilities -- like transportation to frequent specialists and doctors' appointments, and specialized childcare, and home modifications.

By providing critical income support, SSI enables families to care for their children with disabilities at home, instead of in institutions. Institutional care is extremely costly: the average monthly cost of state-institutional care is $16,200 -- more than 27 times the average SSI benefit amount for a disabled child. Remaining at home and in their communities gives children and youth with disabilities a greater chance at an independent, productive, and rewarding life, including the world of work as adults.

STRENGTHENING SSI FOR SENIORS AND PEOPLE WITH DISABILITIES.

SSI is an effective anti-poverty program that provides vital support to vulnerable seniors and people with disabilities. It can and should be strengthened to further increase economic security and opportunity for beneficiaries.

· Update out-of-date asset limits. The asset limits of $2,000 for individuals and $3,000 for couples have only been updated once since the program's establishment in 1972 -- in 1989. If these limits had kept up with inflation, they would be nearly $7,000 for individuals and $10,500 for couples today. These extremely low limits are counterproductive and leave SSI recipients and their families unable to keep precautionary savings for repairing a broken water heater, fixing a leaky roof, or other unforeseen emergencies.

· Update very low income disregards. Like the asset limits, the amounts of unearned and earned income that SSA disregards when calculating SSI benefits ($20 and $65 respectively) have not been updated since the program was established. This means many beneficiaries' earnings trigger overpayments for even relatively modest amounts of work. Nearly half of SSI beneficiaries who work earn less than $200 per month. Increasing the earned income disregard and indexing it for inflation would help beneficiaries and make it easier for them to work.

· Adjust benefit levels to reflect real wage growth in the economy. Currently, SSI benefits increase with inflation by a cost-of-living adjustment, but are never adjusted to reflect real wage growth in the economy. Thus, unlike wages, SSI benefits have remained virtually unchanged in real terms for decades.

· Provide the Social Security Administration with needed administrative funding. In recent years, SSA has received inadequate funding to administer its programs including SSI. As a result, it has been forced to cut service hours and even close some local field offices. SSA must be adequately funded in order to keep up with processing applications, adjusting benefits, and performing periodic reviews to ensure continued eligibility.

Earlier this year, we celebrated the 22nd anniversary of the Americans with Disabilities Act, and the 13th anniversary of the Supreme Court's landmark Olmstead decision. As we consider ways to reduce our federal deficit, now is not the time to take steps backward for our nation's seniors and people with disabilities. By preserving and strengthening vital programs like SSI, we can continue ensuring that people with disabilities are able to live in their communities, with the dignity they deserve.

 
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