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50 Years In, Most SSI Recipients Live in Poverty. That is a Policy Choice . . .

Summary:
By Stephen Nuñez Roosevelt Institute Excellent piece by Stephen Nuñez on SSI and it not adjusting or growing with the changes in economic needs from 50 years ago. Indeed, for the few dollars given out, SSI appears to penalize people rather than assist them. It is ripe for a change to be more supportive of the millions of beneficiaries using it. This year marks the golden anniversary not just of Nixon’s resignation or the Happy Days premiere, but of a safety net program that’s been showing its age for a while now: The Social Security Administration’s Supplemental Security Income (SSI) program.1 Fifty years ago, SSI launched with the goal of offering aid to adults and children with disabilities, and to older adults with little to no income or

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by Stephen Nuñez

Excellent piece by Stephen Nuñez on SSI and it not adjusting or growing with the changes in economic needs from 50 years ago. Indeed, for the few dollars given out, SSI appears to penalize people rather than assist them. It is ripe for a change to be more supportive of the millions of beneficiaries using it.

These changes in statutory implementation can make a difference on the margin, ensuring SSI recipients can access more of the SSI benefit. But regulatory tweaks can only go so far. There are larger problems we still need to address, and these will require legislation.

Though people can access more of it, the benefit is still paltry. The maximum benefit has hovered between 71 and 75 percent of the federal poverty line for its entire history. To make matters worse, benefits are subject to a particularly extreme form of means testing. SSI offers few exemptions in its benefits formula . . . most income, whether earned or unearned, counts against the SSI benefit.

This includes “in-kind support and maintenance,” which counts the “market value” of living with a relative or a friend making meals, reducing monthly benefits. The program does exclude a portion of income from the means test—a whopping $20 for unearned and $65 for earned income each month—but these have not been updated since the program launch (the real value of those income disregards have declined by roughly 84 percent since then). And while most means-tested benefits phase out gradually as income increases, SSI benefits are reduced by $1 for every $2 in earned income. This is effectively a 50 percent tax on income (much higher than the highest marginal income tax rate of 37 percent paid by the highest-income Americans), making it difficult, if not impossible, for SSI recipients to get ahead.

1Unlike Old-Age, Survivors, and Disability Insurance (OASDI), the program people often refer to colloquially as “social security,” SSI is not primarily a retirement benefit.

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