Trump Administration Proposes Cutting SSI to Nearly 400,000 Recipients

Reports indicate that the Trump administration is weighing a proposal to cut Supplemental Security Income (SSI) benefits for nearly 400,000 low-income older people and severely disabled adults and children.

Two types of disability benefits

To better understand who the administration’s proposal would affect, it helps to understand what SSI is and how it differs from Social Security benefits. Social Security pays retirement and disability benefits to people who have worked and paid Social Security taxes for long enough to have earned work credits. Work credits are an essential part of the formula determining how much a person qualifies for in Social Security benefits. Social Security disability (SSDI) covers people who are unable to work due to disability. After two years of receiving SSDI, these people also qualify for Medicare.

By contrast, SSI is a needs-based program for disabled, blind, or elderly people with limited assets. Funded by general tax revenues, SSI provides monthly payments that help recipients cover basic living costs. These same recipients typically qualify for Medicaid coverage as well.

What’s being targeted?

Currently, nearly 400,000 SSI beneficiaries who are blind, disabled, or over the age of 65 live with family or friends. Statistics show that a large portion of these friends and family have serious financial issues of their own. They may have low-paying jobs, own a small mom-and-pop store, or otherwise struggle to make ends meet. If the administration moves forward with its proposal, SSI beneficiaries living with friends or family would likely have their benefits cut by hundreds of dollars per month or lose SSI eligibility entirely.

An August report from the Center on Budget and Policy Priorities (CBPP) says the proposal would make it more difficult for eligible Americans to get and keep SSI by creating more red tape. The issue would be exacerbated by the SSA’s reduced and overburdened staff.

Here’s why

Currently, people receiving SSI can have their benefits reduced by up to one-third if they receive “in-kind support and maintenance.” In-kind support and maintenance includes being given a place to stay or food to eat. Therefore, a blind, elderly, or disabled person living with a relative or friend would be susceptible to a benefit reduction or loss of benefits entirely.

SSI recipients can also have their benefits slashed based on the income of their spouse, or parent if they’re under 18. In each case, it’s assumed that the spouse or parent will incorporate the SSI recipient’s living expenses into their own monthly budget.

The proposal

The administration’s proposed change would mean that the program would revert to rules first established 45 years ago. In 1980, the program most associated with low-income families was Aid to Families with Dependent Children (AFDC). The SSA could identify families as “public assistance households” by determining who was on AFDC. Over time, AFDC was replaced by Temporary Assistance for Needy Families (TANF). According to CBPP, far fewer households receive TANF cash assistance today than received AFDC four decades ago.

Today, receiving Supplemental Nutrition Assistance Program (SNAP) benefits is the best indicator that a household needs the entirety of its income to cover the cost of basic needs and is unable to contribute to the care of another person. Due to the role SNAP plays in identifying financially struggling households, the SSA changed its rules last year. According to the new rules, an SSI recipient living with a family or a friend receiving SNAP benefits won’t have SSI benefits cut.

CBPP says that under the administration’s anticipated proposal, receiving food assistance from SNAP would no longer be enough to qualify a family as a “public assistance household.” The result would be cuts to the SSI benefits of older and disabled recipients living in those homes.

SSI recipients aren’t people with enough money to purchase housing stocks — they simply need a safe place to live. While cutting benefits is currently in the planning stage, it’s easy to understand why some SSI recipients would be concerned.

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