Tag Archives: countable resources

The Impact of Current Resource & Income Limits on SSI Recipients

Supplemental Security Income, often referred to as SSI, is a federal welfare program that focuses on assisting the elderly and disabled who do not qualify for benefits under the various programs that are comprise Social Security. SSI recipients can receive a monthly income equal to the Federal Benefit Rate. This currently is less than 75 percent of the federal poverty guidelines. While that is not much, it at least is subject to cost-of-living adjustments. Meanwhile, much of this program seems completely frozen in time.

Because the SSI program is basically a welfare program, it has strict limits on earnings and resources that permit eligibility for these benefits. During 2013, Representative Raúl Grijalva of Arizona introduced legislation to raise resources that are counted when determining financial eligibility for SSI as well as the monthly exclusions of both unearned and earned incomes (“income disregards”) by approximately 550 percent. While this proposal may sound excessive, it is not so extravagant when viewed in the context of history of the program.

The starting point for Supplemental Security Income dates back to the presidency of Richard Nixon, who signed legislation creating the program in 1972. Since that time, the National Senior Citizens Law Center estimates that the cost of living has grown by more than 5-and-a-half times the amount from 1972. Meanwhile, the rate of growth of countable resources, as well as both types of income disregards, has been anemic, at best.

Countable resources did experience a growth spurt in the latter half of the 1980s. When the program began, these resources, which generally consider bank accounts, cash, and similar types of property, could not exceed $1500 for an individual and $2250 for a couple who both received SSI. This was true from 1974 through 1984 before these amounts were permitted to grow. In fact, for a five-year span from 1985 into 1989, the level of countable resources increased, reaching $2000 for individuals and $3000 for a couple receiving SSI. This amounted to the resource level – so long stagnant – increasing by one third in half of a decade.

However, an even more noteworthy situation has occurred during the 25 years that followed. Countable resources have remained at the 1989 level. Due to this, SSI recipients often are unable to afford to have cars and other common household equipment repaired because repair costs have advanced with the times — liquid assets such as savings accounts need to be tapped to pay for these. Meanwhile, a person on SSI continues to be allowed have relatively small amounts of such resources for emergency expenditures. People on SSI have little room to maneuver when unexpected problems arise because their incomes generally are far below the poverty level while lack virtually any resources to have the flexibility needed to handle emergencies.

The income disregards tell much the same story. In fact, these situations have been even worse over time. In a month, a person who receives SSI can receive unearned income, such as dividends, interest, or capital gains, totaling $20 before this type of income would result in a dollar-for-dollar deduction from SSI. While there was the brief five-year period when countable resource amounts did increase, the unearned income disregard of $20 today is the same amount as the unearned income disregard established at the program’s inception in 1974. Assuming that the cost of living has jumped 550 percent during this time frame, this means, relatively speaking,  that the unearned income disregard has plummeted to a level that is roughly equivalent to $3.64 in 1974, based on the cost of living from that year to the present time.

As for the earned income disregard, it may be $65 per month instead of $20 per month, but it did not have to climb to that level. Again, today’s amount equals the value from 1974, four decades ago. It should be noted that the earned income disregard can be as much as $85 if there is no unearned income and that earned income above the disregarded amount reduces SSI benefits by 50 cents for every dollar earned. However, this does not change the basic fact that recipients of SSI have fallen even farther behind the rest of the population in keeping pace with the cost of living.

What can be gained by raising the threshold levels mentioned here? It would not be a forced transfer of wealth but, instead, would allow SSI recipients to actually be able to use their resources and any additional income to help themselves. At the very least, providing fair increases in the current levels for countable resources and income disregards can offer new, if only modest, possibilities to those who are forced by law to remain deeply impoverished to do more for themselves while not taking anything away from others, an idea that would seem worthy of consideration.