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Increase in SSI Asset Limit Could Help Millions of Disabled Beneficiaries

In a rare act of bipartisanship, Ohio Senators Rob Portman and Sherrod Brown have introduced a bill, S.4102 – SSI Savings Penalty Elimination Act, to raise the asset limit for eligibility for beneficiaries of Supplemental Security Income (SSI) from $2,000 for individuals and $3,000 for married couples to $10,000 and $20,000, respectively, and to index it for inflation. The current asset limit has not changed since 1984. Cumulative inflation since then has been 186%, meaning that if this limit had been indexed for inflation it would now be $5,720. In effect, we’ve experienced a gradual 40-year reduction in the asset limit for SSI.

What is SSI?

SSI is a joint federal-state income-support program for people who are disabled, blind or over the age of 65. It provides only meager support, a federal base payment of $841 a month (in 2022) for an individual and $1,261 for a married couple. States may supplement this amount and some do so to a high of $1,110.26 a month for a blind beneficiary in California. The Massachusetts benefit this year for a disabled individual is $955.39 a month.

Yet, many beneficiaries don’t receive even these amounts. The monthly benefit is offset dollar-for-dollar from income received from other sources, whether earned or gifted. (The rules here can get complicated. For instance, payments from a trust for the benefit of someone receiving SSI may or may not cause an offset depending on what’s paid for and how it is paid.) Further, many beneficiaries receive a one third reduction in their monthly benefit because someone else is paying for their food and housing. For instance, when a disabled individual reaches age 18, they can can qualify for SSI based on their own finances even if they are still living with their parents. But in Massachusetts their monthly benefit will be $648.25 instead of $955.39.

Tied Benefits

This annual stipend of $7,779 or $11,465 can be very important in helping people with disabilities make ends meet. Equally important are some of the programs that come with it. In most states, if you get SSI you are also automatically enrolled in Medicaid (MassHealth in Massachusetts). Other programs, whether SNAP benefits or group homes, also are often tied into the SSI program.

It’s Complicated

Unfortunately, becoming eligible and staying eligible for SSI is a fraught process. The receipt of just about any funds can make a beneficiary ineligible for benefits. Sometimes this results in beneficiaries being ordered to repay SSI benefits they received while over the asset limit. It means that they cannot save for any unanticipated expenses or even anticipated ones, such as for furniture, a computer, or to visit relatives for the holidays. Beneficiaries and their families must consult with lawyers just to make sure they don’t violate the SSI income and asset rules and those who don’t often find themselves running afoul of those rules, leading to the loss of benefits, lost hours dealing with the Social Security Administration, and undue stress.

ABLE Accounts

To some extent, Congress created a safety hatch with passage of the ABLE Act in 2014, permitting qualifying individuals to shelter up to $17,000 a year (up to a cap of $100,000) in specialized accounts. But only those who became disabled before age 26 are eligible for these accounts and they add one more complicating factor for those who may have assets just above the current limits. (Learn more about ABLE Accounts in our podcast here.)

It’s Got Corporate Support

Not only is the need to raise the SSI asset limit so clear that both Republicans and Democrats are behind it, but so are The Arc and JP Morgan Chase. JP Morgan notes that the structure of the SSI program acts a disincentive for people to work:

The SSI program should be updated and reformed to incentivize individuals with disabilities who are able to work to seek employment without the risk of losing their economic security. Promising proposals call for raising monthly SSI benefits to 100% of the federal poverty level and boosting asset limits to $10,000 for individuals and $20,000 for couples and families with disabled children, updating outdated income rules for inflation, and eliminating the penalty for married couples. Thereafter, program benefits,
income disregards, and asset limits should be indexed to inflation to keep pace with rising living costs. Modernizing the program with provisions such as these is estimated to cut poverty among SSI beneficiaries by more than half and lift more than 3 million people above the poverty lines, according to the Urban Institute. Moreover, the revised limits would allow people with disabilities to advance in their careers. Additionally, subminimum wages for workers with disabilities, currently allowed under Section 14(c) of the Fair Labor Standards Act, should be eliminated.

Make Your Voice Heard

The Arc is leading a campaign to urge Congress to the SSI Savings Penalty Elimination Act. You can join it here:

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