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Supplemental Security Income (SSI)

The Problems Necessitating the Policy

The problems which necessitated the SSI program include:

1. Financial Vulnerability: Individuals with disabilities, blindness, or advanced age face

challenges in securing employment or generating sufficient income to meet their basic

needs.

2. Healthcare Costs: People with disabilities often incur higher healthcare costs due to

medical needs and may struggle to cover these expenses. SSI helps by providing a basic

income stream that can contribute to meeting healthcare needs and serve as a gateway to

eligibility for other programs, such as Medicaid.

3. Preventing Poverty: The SSI program is instrumental in preventing individuals with dis-

abilities, blindness, or advanced age from falling into poverty. Without financial assis-

tance, these individuals may struggle to afford necessities such as food, shelter, and

healthcare.

4. Supporting Independence: For individuals who are unable to work due to disabilities or

age, SSI supports a degree of financial independence. It allows them to maintain a certain

standard of living and participate in their communities to the extent possible.

Overall, the SSI program addresses the financial and economic challenges faced by vulnerable

populations, ensuring that they have a basic level of income to support their needs and maintain a

reasonable quality of life (Erlanger, H. S., & Roth, W.,1985).

Historical Development

President Franklin Roosevelt selected the social insurance approach as the pivotal element

in his efforts to address the issue of economic security. On June 8, 1934, in a message to Con-
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gress, he declared his intention to establish a social security program, encompassing what is now

recognized as SSI and other social insurance programs. The bill was successfully passed in June

1935. Upon signing the Social Security bill into law, President Roosevelt emphasized, "This law

represents a cornerstone in a structure which is being built but is by no means complete" (Mur-

ray, J. E., 2014).

President Roosevelt's assertion held true; it was a relatively modest law that provided assis-

tance to the elderly, poor, dependent children, the blind, and some disabled children. In 1950, it

was amended to incorporate disability benefits. The amendments broadened the reach of the So-

cial Security Act to encompass benefits for disabled workers and their dependents, a provision

not present in the original legislation. In 1972, Congress created SSI to replace the federal grants

to states to supplement income to citizens who were ineligible for social security. The establish-

ment of SSI resulted from the 1972 amendments, aiming to tackle the issue of poverty among the

aged, blind, and disabled individuals who were either not covered or inadequately covered by ex-

isting social security programs (Erkulwater, J. L., 2015). Prior to the introduction of SSI, diverse

state programs existed to assist the aged, blind, and disabled, but there was a lack of a consistent

federal program to guarantee a minimum level of income support for this demographic (Koll-

mann, G. (n.d.), 2000).

Policy Description

The policy in focus aims to enhance economic security by establishing a safety net contributing

to the overall well-being of American citizens. Initiated in 1972 to combat poverty among the

aged, blind, and disabled individuals who were inadequately covered by existing social security

programs, SSI provides crucial cash assistance for basic needs such as food, clothing, and shel-

ter. Designed as a means-tested initiative, eligibility is contingent on financial need, thereby sup-
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plementing the income of those with limited or no other financial resources. The policy specifi-

cally targets vulnerable populations often left underserved by other social security programs, de-

livering monthly benefits to individuals who are blind, aged 65 or older, or have a qualifying dis-

ability (Sweeney, E. P., & Fremstad, S. (n.d.), 2005).

The program's eligibility criteria and federal payment standards are nationally uniform, with in-

dividuals typically considered ineligible if their resources exceed specified thresholds. While

some states augment SSI benefits with additional payments, Mississippi stands out as an excep-

tion, providing no supplemental support to individuals receiving SSI. SSI is open to individuals

meeting its eligibility criteria, supported by the General Fund of the U.S. Treasury. Overall, the

program's overarching goal is to ensure that these individuals attain and maintain a basic stan-

dard of living (U.S. Social Security Administration, O. of R. and D. P. (n.d.), 2005).

Policy Analysis

SSI functions as a safety net for individuals with minimal resources and scant Social Se-

curity or other income. States have the discretion to enhance federal payments if they choose to

do so. To qualify for SSI benefits, individuals must demonstrate adherence to the program's cri-

teria. Older adults seeking SSI based on age must satisfy nonmedical eligibility requirements.

Meanwhile, those pursuing SSI based on disability must meet both nonmedical and medical eli-

gibility criteria (Balkus, R., 2009).

All SSI applicants are obligated to disclose their income and resources to the Social Secu-

rity Administration during the application process or while receiving SSI to ensure compliance

with the program's income and resource limits. It is crucial for applicants and recipients to under-

stand the various types of income and resources they receive, identifying what needs to be re-

ported and when, to provide accurate information. Social Security Administration employees are
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responsible for verifying applicant reports and correctly applying program rules to determine SSI

eligibility and payment amounts. The intricacies of the program may pose challenges in estab-

lishing nonmedical SSI eligibility (Balkus, R., 2009).

SSI diverges significantly from Social Security, operating as a means-tested program,

whereas Social Security functions as a social insurance program. Means-tested programs, such as

SSI, are exclusively accessible to individuals with minimal income or assets, who must addition-

ally meet specific criteria, such as being elderly, blind, or disabled. Although managed by the

same agency, SSI remains distinct from the OASDI (Old-Age, Survivors, and Disability Insur-

ance) programs commonly known as Social Security. Despite their differences, there is substan-

tial overlap between the two. Many SSI recipients, having worked sufficiently to qualify for So-

cial Security, are eligible for both programs. Nearly one-third of SSI recipients under 65 and al-

most three-fifths of those over 65 also receive Social Security benefits. Described as "assistance

of last resort" by the Social Security Administration, SSI stands apart from Social Security by

not requiring a work history for eligibility. Although SSI recipients frequently receive both bene-

fits, challenges exist in ensuring high participation rates among eligible individuals in means-

tested programs like SSI (Kijakazi, K. (n.d.), 2022).

Social insurance programs, such as Social Security, aim to protect workers and their fami-

lies from economic risks, striving for universal coverage. As the largest U.S. social insurance

program, Social Security covers almost all employment, with benefits linked to a worker's pay-

roll tax contributions. Eligible individuals can start collecting Social Security benefits upon

reaching age 62 or experiencing a disability. In contrast, while SSI alone may not be sufficient to

lift independent individuals out of poverty, it significantly reduces the poverty rate for beneficia-

ries and their families from 63% to 42%. Constituting approximately three-fourths of the poverty
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line for a single person and slightly over 80% for a couple, SSI benefits play a crucial role in di-

minishing extreme poverty and easing the financial burden on family members (Kijakazi, K.

(n.d.), 2022).

A 2010 study by the Social Security Administration revealed that without SSI payments,

the poverty rate for recipients would be 65%, but with SSI, it dropped to 43%. Most families

with an SSI recipient remained below 150% of the poverty threshold. This underscores the high

effectiveness of SSI in reducing the overall poverty gap among its recipients, highlighting its

pivotal role in addressing financial hardships (Balkus, R., 2009).

Although SSI has been pivotal in mitigating poverty among the elderly, blind, and disabled,

it confronts significant challenges. The eligibility criteria may unintentionally exclude certain in-

dividuals experiencing economic hardship. Furthermore, the benefit amounts may not consis-

tently mirror the actual cost of living, particularly in regions with high living expenses. The ad-

ministration and application process of the program can be intricate, potentially creating obsta-

cles for eligible individuals. Additionally, the stringent income and resource limits might dis-

suade individuals from pursuing employment, as surpassing these thresholds could lead to a loss

of benefits (Kijakazi, K. (n.d.), 2022)

Recommendations for SSI Improvement

Enhance and modernize SSI. Support the SSI Restoration Act, presented in both the House and

Senate, which proposes augmenting benefits, raising asset and income thresholds, eliminating

marriage-related penalties, and simplifying intricate regulations. In alignment with these propos-

als, President Joe Biden, during the 2020 presidential campaign and in his 2022 budget, recom-

mended similar enhancements to SSI, though not as comprehensive as those in the SSI Restora-

tion Act (Balkus, R., 2009)..

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Increase resource limits. A current congressional bill, S.4102 - The SSI Savings Penalty

Elimination Act, proposes raising the resource limits from $2,000 to $10,000 for individuals and

from $3,000 to $20,000 for married couples. The bill suggests annual adjustments to these limits

for inflation. The proposal has been read twice and referred to the Committee on Finance, aiming

to amend title XVI of the Social Security Act to update the resource limit for supplemental secu-

rity income eligibility (Balkus, R., 2009)..

Update SSI rules. There is a pressing need for policymakers to revise SSI's regulations in

various aspects. The current maximum benefit is only three-fourths of the poverty line, and ac-

cording to a study by Richard Balkus, James Sears, Susan Wilschke, and Bernard Wixon in

2008, four in ten recipients have incomes below the federal poverty line even with their SSI ben-

efits. Regrettably, the present program falls far short of achieving its legislative goal. While SSI

offers crucial monthly cash income, the benefits are insufficient to ensure an escape from

poverty. As of 2020, the maximum federal SSI benefit stands at just $783 per month ($9,396 per

year). This benefit level is less than three-quarters of the federal poverty line, which, in 2020, is

$1,063.33 per month ($12,760 per year) for an individual (Balkus, R., 2009).

Increase the basic benefit. Recommend increasing the basic benefit, excluding retirement

savings from asset limits, and relaxing eligibility constraints for immigrants and residents in ter-

ritories. Essential to this improvement is the repeal of certain complex and intrusive rules (Kath-

leen Romig, K., & Washington, S. (n.d.), 2022).

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References

Balkus, R. (2009, March 1). Social Security Administration. Social Security Administration Re-
search, Statistics, and Policy Analysis.
https://www.ssa.gov/policy/docs/ssb/v68n4/v68n4p15.html
Erkulwater, J. L. (2015). The other welfare: Supplemental security income and U.S. Social Pol-
icy. by Edward D. Berkowitz and Larry DeWitt. Ithaca, NY: Cornell University Press,
2013. 296P. $45.00. Perspectives on Politics, 13(1), 201–202.
https://doi.org/10.1017/s1537592714003582
Erlanger, H. S., & Roth, W. (1985). Disability policy. American Behavioral Scientist, 28(3),
319–345. https://doi.org/10.1177/000276485028003003
Kathleen Romig, K., & Washington, S. (n.d.). Policymakers should expand and simplify supple-
mental security income. Center on Budget and Policy Priorities.
https://www.cbpp.org/research/social-security/policymakers-should-expand-and-simplify-
supplemental-security-income#:~:text=Some%20recent%20proposals%20would
%20update,simplify%20complex%20and%20intrusive%20rules
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Kijakazi, K. (n.d.). Annual report of the supplemental security income program. Annual Report
of the Supplemental Security Income Program .
https://www.ssa.gov/OACT/ssir/SSI22/ssi2022.pdf
Kollmann, G. (n.d.). Social Security. Social Security History.
https://www.ssa.gov/history/reports/crsleghist2.html
Murray, J. E. (2014). the other welfare: Supplemental security income and U.S. social policy. by
Edward D. Berkowitz and Larry DeWitt (Ithaca, Cornell University Press, 2013) pp. 296
$45.00. The Journal of Interdisciplinary History, 45(1), 101–102.
https://doi.org/10.1162/jinh_r_00675
Sweeney, E. P., & Fremstad, S. (n.d.). Supplemental security income: Supporting people with
disabilities and the elderly poor, Rev 8/17/05. Center on Budget and Policy Priorities.
https://www.cbpp.org/sites/default/files/archive/7-19-05imm.htm
U.S. Social Security Administration, O. of R. and D. P. (n.d.). State Statistics, December 2005.
State Statistics, December 2005 - Mississippi.
https://permanent.fdlp.gov/lps74156/lps74156/www.ssa.gov/policy/docs/factsheets/
state_stats/2005/ms.html