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Happy 40th: Does Supplemental Security Income (SSI) need reform?

Last month marked the 40th anniversary of the Supplemental Security Income (SSI) program. Signed into law by President Nixon, the program was established to provide systematic financial support to help prevent poverty among the disabled and elderly.

Though the program has substantially improved quality of life for recipients who were dependent on institutionalized rather than family or community care, there are ways that could improve the system for seniors and individuals with disabilities in Los Angeles, California and nationwide.

Currently, the program provides vital support to the most vulnerable senior citizens and disabled. To increase economic security in this group, the program could be improved since its enactment in several ways:

  • Update out-of-date asset limits: Currently recipients are limited to $2,000 in individual assets and $3,000 for couples. To match rates of inflation, these limits should be nearly $7,000 for individuals and $10,500 for couples. Extremely low asset limits are counterproductive and prevent families from having any savings to deal with unexpected costs.
  • Update earned income disregard: The SSA disregards $20 of unearned income and $65 of earned income when calculating SSI benefits. These numbers have also not been updated, meaning that many beneficiaries trigger overpayments for even a modest amount of work. Increasing earned income disregard would make it easier for beneficiaries to work and save.
  • Adjust benefits to reflect real-wage growth: Currently SSI benefits increase based on the "cost-of-living adjustment" which takes into consideration rates of inflation. These rates, however, do not reflect real wage growth in the economy. This means that benefits have remained unchanged in real terms for decades.
  • Provide the SSA with needed administrative funding: Currently the agency is overburdened with claims and does not have the funding to appropriately fund operations. To effectively process applications, adjust benefits, and perform reviews to ensure eligibility, the agency needs additional funding and reform.

Source: The Huffington Post, "Happy Birthday, SSI: A Safety Net for Vulnerable Americans," Donna Meltzer, Oct. 30, 2012

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