SSI Should Be Strengthened, Not Cut

March 27, 2014 at 11:22 am

House Budget Committee Chairman Paul Ryan’s misleading review of the safety net attacks Supplemental Security Income (SSI) — an important program that provides cash income to seniors, the blind, and people with severe and long-lasting disabilities who have little income and few assets.  This vital program aids some of the poorest and most vulnerable Americans and, rather than attack it, policymakers should strengthen it.

In December 2013, 8.4 million people collected SSI:  2.1 million seniors age 65 or older, 4.9 million disabled adults age 18-64, and 1.3 million disabled children under age 18.  Until the deep recession caused a modest uptick, SSI participation had generally been flat or falling as a share of the population since at least the mid-1990s (see graph).

SSI benefits alone don’t lift recipients living independently out of poverty; the maximum benefits for individuals ($721 a month) and couples ($1,082, if both spouses qualify) are about three-fourths of the poverty level.  But SSI greatly reduces the number of people in extreme poverty and lessens the burden on other family members.  A Social Security Administration study found that, in 2010, the poverty rate (based on family income) of recipients would be 65 percent without counting SSI payments; the actual rate, including SSI, was 43 percent.  Most families with an SSI recipient remained below 150 percent of the poverty threshold.  SSI benefits fall when recipients have other income (or live in a Medicaid facility or with relatives who provide support), so the average payment is just $529 a month.

Because SSI participants are elderly or have severe disabilities, it’s no surprise that relatively few of them work, even though program rules allow and encourage them to do so.  Nevertheless, nearly one-third of SSI recipients age 18-64, and three-fifths of elderly beneficiaries 65 or older, have worked enough — at least one-fourth of their adult lives — to qualify for Social Security benefits.  And two-thirds of children with disabilities who receive SSI and live in two-parent families — and one-third of those in single-parent families — have a working parent.

Severe disability in childhood — exacerbated by poverty — hampers adult outcomes (see here, here, and here), and about two-thirds of child beneficiaries reaching age 18 continue to qualify for SSI based on disability.  It’s not appropriate, as Ryan’s report implicitly does, to compare statistics like high school graduation rates and job-holding for young people who received SSI as children with statistics for those who didn’t.  The two groups differ in fundamental ways.  Similarly, there’s no basis for calling the adult struggles of those who received SSI as children an “effect” of their benefit receipt, as Ryan does.  Their underlying health problems coupled with their low incomes play an important role in their academic achievement and adult employment prospects, and at least one study suggests that childhood SSI benefits improve adult outcomes.

Special SSI program rules — like the Student Earned Income Exclusion — are designed to encourage a successful transition to adulthood for child beneficiaries, and the agency is rigorously testing even more targeted efforts.  Early results are mixed, but if the pilots are successful, such interventions would require more funding, not less, for this special group of young adults.

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More About Kathy Ruffing

Kathy Ruffing

Kathy Ruffing is a Senior Fellow at the Center on Budget and Policy Priorities, specializing in federal budget issues.

Full bio | Blog Archive | Research archive at CBPP.org

1 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. RJ #
    1

    Saying that SSI rules “encourage” people to work is misleading. The 50% cuts to benefits once you earn more than $65/month combined with phasing out of other benefits, plus employment taxes, usually results in a marginal tax rate of 75% or more. If people think this tax rate encourages work, they should support much higher taxes on everybody else



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