Last June, the Supplemental Security Income Restoration Act, was introduced in Congress that would update the requirements and parameters of the SSI program.
SSI, which is part of the Social Security system, is designed to provide supplemental financial assistance for low-income seniors as well as people with disabilities or those who are unable to work. Currently, about 8.1 million Americans receive SSI benefits, but the bill's sponsors, Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and Bernie Sanders (I-Vt.) say it doesn't do enough to keep people out of poverty.
Warren: SSI doesn't lift people out of poverty
The SSI program was established by President Richard Nixon in 1974, but it has gone largely without updates since then. In 2022, based on SSI's criteria, the full monthly federal benefit for a person receiving SSI is $841 while a couple would get $1,261 — both are below the federal poverty line. But the average recipient receives less than that, just under $600 per month.
In addition to the low payments, the lawmakers cited other concerns with the SSI program. To qualify for the benefit, an individual must have less than $2,000 in assets, or $3,000 for couples. So, if they are able to save any money and accumulate more than that, they will no longer be eligible for SSI.
Another concern is the stipulation that if the individual or couple receives meaningful income from any other sources, that amount is deducted from their SSI benefits. Recipients are only allowed to keep the first $20 per month from other non-employment sources, like regular Social Security benefits or a pension, without a deduction, and $65 per month from work income without a deduction. These thresholds were determined in 1974, when the cost of living was five times lower. But not only that, they disincentivize working for those who can.
As a result, according to Warren, about 40% of those who receive SSI benefits are living in poverty. Warren laid out her concerns with the law at hearing held by the U.S. Senate Special Committee on Aging back on Jan. 22.
So [a woman receiving SSI benefits] is at half of the poverty level that we've established in this country, and if she goes over $20 in terms of collecting her Social Security, it will just reduce her benefits dollar for dollar. So here she is. She's below the poverty level because of her circumstances. She receives an SSI check, but she's going to be punished for working, punished for claiming Social Security, and punished if she saves any money.
And I want to add that one. She will be punished if she saves too much. Because SSI beneficiaries are allowed a maximum of only $2,000 in savings, and that includes their retirement accounts. By the way, she will also be punished for marrying because SSI benefits and asset limits kick in for married recipients. And she will even be punished for receiving groceries from a friend, or housing from her family.
In other words, every avenue she would try to take to lift herself out of poverty is an avenue that she will be penalized for under our current law.
The SSI Restoration Act seeks to modernize the program with several important changes. One, it would raise the monthly payout to 100% of the federal poverty level, a 31% increase from where it is now, and then tie the subsequent increases to inflation. Also, it would double the amount for married couples.
In addition, it would increase the eligibility requirement to $10,000 in assets for individuals and $20,000 for couples.
Further, the bill would increase the amount people can earn from working to $399 per month and boost the amount of income from other sources to $123 per month, without penalty or reductions in SSI benefits.
“SSI's original goal was to ensure that no elderly or disabled American would be forced to subsist on below-poverty-level incomes,” Warren added at the hearing. “And yet, that is exactly what this law has turned into. We can — and we must — change the law so that it fulfills its original goals.”
There has been no action on the SSI Restoration Act yet but there had been a push to include it in the Build Back Better Act before it was derailed.
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