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This past fall, Senators Sherrod Brown (D-OH) and Bill Cassidy (R-LA) introduced a bill to reform the Supplemental Security Income (SSI) program.* SSI, managed by the Social Security Administration, provides supplemental income to more than 8 million people who are over the age of 65 or who have disabilities.
Currently, individuals who receive SSI cannot have more than $2,000 in assets. For married couples, the asset limit is $3,000. Assets can include retirement accounts, bank accounts, savings, stocks, mutual funds and life insurance as well as the resources of parents and/or spouses. Primary homes and cars do not count towards allowable assets. ABLE accounts, state-run savings programs that let people with disabilities save for qualifying disability-related expenses, do not count towards assets for SSI.
The current average monthly SSI benefit for individuals is $585; for approximately 60% of recipients, SSI is their only source of income.
The new bill, the bipartisan SSI Savings Penalty Elimination Act (HR 5408/S. 2767), would increase the asset limit for the first time since the 1980s to $10,000 for individuals and $20,000 for married couples. SSI was created in 1972, and asset limits haven’t changed much since then – including adjustment for inflation.
“The asset cap is contrary to everything we hear about the importance of saving for a rainy day. You know, how you should have three months’ worth of expenses saved up just in case something happens. But for people on SSI, they just can't do that,” says Kate Lang, Director of Federal Income Security at Justice in Aging, a non-profit legal advocacy organization that works to remove barriers low-income seniors face in accessing needed services.
While legislation to lift the SSI asset cap has been proposed before, Lang is hopeful about the current bill. “We're excited that this bill seems to be gaining some traction in the current Congress, with bipartisan support in both the House and the Senate, which is unusual. The momentum is there and that’s important because reforms are really needed with SSI,” Lang says.
People with disabilities are twice as likely to face poverty than people without disabilities. This is in part due to widespread employment discrimination and high costs associated with having a disability. But the need to qualify for SSI is another factor that increases the risk of poverty for people with disabilities. The asset cap also makes it near impossible for people to save enough for emergencies, to move, to buy a car or anything else that requires more than a few thousand dollars -- without being disqualified from receiving SSI benefits. Many people who receive SSI struggle to prevent their assets from going over the limit because it is so low.
Lauren lives at home with her parents in rural Indiana and receives SSI. She graduated from high school at the height of the Covid-19 pandemic and is working towards an associate degree in animal science. She dreams of one day living on her own and pursuing a veterinary technician degree. But because she receives SSI, she can’t save more than $2,000 without losing her benefits.
“I have to constantly monitor my account to make sure I am not working too much so that I can keep all my benefits,” she says. “I have not gone over the limit, but the low level does make it impossible to be responsible and save for larger purchases like a car or home of my own. I am stuck as a renter or with poor-quality transportation, and I am not able to plan for the future, like retirement—things that other people my age are able to do.”
A by the Center on Budget and Policy Priorities found that raising the asset cap – or eliminating it altogether – wouldn’t dramatically increase enrollment in SSI or be an administrative or economic burden on the SSA.
The authors (Kathleen Romig, Director of Social Security and Disability Policy; Luis Nunez, Research Associate, and Arloc Sherman, Vice President for Data Analysis and Research) analyze the consequences of raising the SSI asset cap limit as well as eliminating it altogether. They found that if the asset cap were raised to $10,000 per individual, SSI enrollment would only increase by 3%. If the cap were raised to $100,000 per individual, SSI participation would increase by 5%. Eliminating the asset cap completely would likely only result in a 6% increase in SSI participation. The authors estimate that the costs of administering the program under these scenarios would increase proportionately or slightly less than proportionately.
They note that increasing or eliminating SSI asset limits would also help reduce the number of people who get disqualified each year by exceeding the asset cap. Participants’ eligibility is reviewed every one to six years and about 70,000 beneficiaries have their benefits suspended each year for going over the cap and must pay back any benefits they received while out of compliance. Another 40,000 have their eligibility terminated. “Even going a few hundred dollars over the asset limits can trigger huge overpayments for SSI beneficiaries,” says Romig. “Typically, beneficiaries who exceed the limit, even by a small amount, must repay tens of thousands of dollars, and the agency stops paying them the benefits that they need to get by.”
“Raising the SSI asset limit is one of the most important things we can do right now to improve financial security for millions of older adults and people with disabilities,” says Darcy Milburn, Director of Social Security and Healthcare Policy at The Arc of the United States. “The current asset limits trap people in poverty, create barriers to work, and make financial independence virtually impossible. SSI beneficiaries cannot save for necessary expenses like a security deposit or car repairs without the risk of losing their benefits, leaving many just one emergency away from homelessness and hunger. The negative impacts of the current SSI asset limits extend beyond individual SSI beneficiaries to their families, communities, and our economy as a whole.”
*The bill was introduced in the House of Representatives by Congressman Brian Higgins (D-NY) along with Rep. Brian Fitzpatrick (R-PA).