Congress Must Raise SSI Disability Benefit Asset Limits
February 11, 2023
Commentary by Tom Nash.
Supplemental Security Income (SSI)—a vital financial lifeline for adults and children with disabilities and little or no income—was signed into law more than 50 years ago by President Richard Nixon.
SSI benefits were designed for people who are “subject to great inequities and considerable red tape inherent in the present system,” Nixon said at the signing of the 1972 legislation.
Although the program was intended to provide a better financial footing for struggling families, the “great inequities” and “considerable red tape” Nixon spoke about still exist.
This year, the program will serve nearly 8 million beneficiaries with a maximum benefit of $914 per month for an individual. This adds up to less than $11,000 annually, which is below the current federal poverty level of $13,590 a year. Married couples don’t fare any better. In 2023, SSI will pay them an annual benefit of $16,452, which is nearly $2,000 less than the federal poverty level.
Middle and upper-class households often have savings accounts and other investments they can access in lean times, but to qualify for SSI benefits, recipients are strictly limited in the resources they can accumulate.
The Social Security Administration (SSA) defines a resource as, “money as well as something that you own and can turn into cash. Examples of resources are property, stocks, bonds, and bank accounts.”
To be eligible, individuals must have $2,000 or less in savings and other resources which can be converted to cash. The resource limit is $3,000 for couples. Exemptions are granted for one’s primary residence, a car, essential household goods like furniture, appliances, TVs and computers, and personal effects like jewelry, clothing, pets, and educational materials.
At first glance, these rules may seem reasonable. But in reality, the asset limits are arbitrarily low and keep people boxed into poverty where any semblance of financial independence is out of reach.
The cap was last reset to $2,000 in 1984—nearly 40 years ago!
Two thousand dollars then was a more reasonable amount, but today that barely covers the basic expenses of living like rent, food, and utilities.
According to the Bureau of Labor Statistics’ consumer price index, today’s prices are nearly three times as high as average prices in 1984. So you can see why SSI families struggle when an emergency pops up. Even something as simple as an unanticipated car repair can turn into a financial crisis.
Under the current restrictive limits, individuals on SSI are often forced to turn down job opportunities. Even a very modest paycheck risks pushing them over the tiny resource limit and can trigger a loss of their SSI and Medicaid benefits.
The time has come to raise the asset limits. As attorneys for low-income Americans, we say it is long past overdue. Some Washington lawmakers agree. They are leading a bipartisan push to update the asset limits.
A bill—the SSI Savings Penalty Elimination Act is making its way through Congress and seeks to raise the asset limits to $10,000 for individuals and $20,000 for couples. The bill would also index asset limits to inflation, so SSI will not have to play catch up after another 40 years.
Tens of thousands of recipients lose their benefits because they unintentionally exceed the asset limits. We must stop micromanaging SSI recipients—not only for their benefit, but for our benefit as taxpayers as well.
SSI has only one-eighth of the number of recipients as the rest of Social Security but it costs nearly the same amount to administer. The high administration costs are due in large part to the resource testing the SSI program requires.
Right now, the Savings Penalty Elimination Act appears to be stuck in Congress’ Committee on Finance. Our lawmakers in Washington should seize the opportunity to improve the lives of millions of Americans by moving this bipartisan bill forward.
Revising woefully outdated SSI requirements is a critical first step in building financial security for SSI recipients. It is the sensible and decent thing to do.
We encourage you to call your congressperson to encourage them to act. You can find your representative by using this link: https://www.house.gov/representatives/find-your-representative.