With historic levels of polarization dominating American politics, it may seem there’s nothing left and right can agree on. But one issue that presents a rare opportunity for bipartisan cooperation—and which would dramatically improve the lives and economic security of millions of disabled and older people in the United States—is updating the woefully outdated $2,000 asset limit in Supplemental Security Income, or SSI, which hasn’t been adjusted for inflation in nearly forty years.
Signed into law by President Richard Nixon in 1972, SSI provides monthly income assistance to nearly 8 million people with significant disabilities and older adults 65 or older who have very little in income and assets. As of July 2023, roughly 4.1 million SSI beneficiaries were nonelderly adults with disabilities, just under 1 million were disabled children living in very low-income households, and roughly 2.3 million were very low-income seniors. In addition to meeting rigid financial eligibility criteria, in order to receive SSI on the basis of disability, individuals must also meet the same strict medical criteria used for Social Security Disability Insurance—and more than six out of ten applications for SSI disability benefits are denied. An important counterpart to Social Security, SSI is administered by the Social Security Administration (SSA).
While modest, the income support that SSI provides is nothing short of life-sustaining for millions of disabled and older people in the United States; furthermore, SSI eligibility comes with Medicaid coverage, which for many disabled and older beneficiaries is even more vital than the program’s income support. But because this critical part of America’s safety net has been left to wither on the vine for decades, outdated program rules now consign millions of disabled people and older adults to deep and enduring poverty, when the program was put in place to give them a lifeline out of it. One of SSI’s most egregiously outdated rules is its antiquated asset limit, which has remained stuck at $2,000 for individuals and $3,000 for couples since Congress last adjusted them for inflation in 1984. These levels have lost nearly all of their value in the nearly four decades since they were last adjusted; had they been indexed to inflation when SSI was initially signed into law in 1972, for example, they would be $10,840 and $16,260, respectively, today.
Now, more than fifty years after the SSI program’s founding, bipartisan momentum is finally growing to reform its antiquated asset limits, in recognition that they have become one of the most regressive anti-savings measures in federal law. Bipartisan legislation led by Senators Sherrod Brown (D–OH) and Bill Cassidy (R–LA), and Representatives Brian Higgins (D–NY), and Brian Fitzpatrick (R–PA)—the SSI Savings Penalty Elimination Act—would update SSI’s asset limits to $10,000 for an individual and $20,000 for a couple, to ensure the program’s beneficiaries are able to build modest savings without losing survival income and health insurance. Importantly, the legislation would also remedy Congress’s original error, by indexing the limits to the Consumer Price Index (CPI-W), to ensure they keep pace with inflation moving forward.
SSI’s antiquated asset limits have become one of the most regressive anti-savings measures in federal law.
Updating SSI’s asset limits has the support of economic policy experts across the political spectrum, as well as disability advocates, advocates for older adults, antipoverty advocates, social service providers, faith groups, corporate leaders, and a broad array of stakeholders. Here are the top five reasons everyone agrees that SSI’s asset limits are overdue for an upgrade:
- Federal policy shouldn’t punish people for saving. Yet, that’s exactly what SSI’s pitifully outdated asset limits now do. SSI’s asset caps–-which limit how much beneficiaries are allowed to have in savings and other qualifying resources, such as retirement accounts, education savings, and even burial insurance—directly penalize disabled and older people, as well as families with a disabled child, from having even modest emergency savings, let alone planning for the future. Since anyone exceeding the limits is disqualified from receiving SSI, these out-of-date limits are directly counterproductive to the SSI program’s goal of boosting economic security and preventing hardship for disabled and older people in the United States. Public policy should encourage, not penalize, saving for the future, and the importance of emergency savings to protect against financial shocks has been well documented. Even before the pandemic, a large and growing body of research confirmed that asset limits are counterproductive to economic stability in that they penalize savings, creating chilling effects on interacting with banks and preventing people from having a rainy day fund to help them stay afloat financially in the event of an emergency or unexpected expense. As such, increasingly, the trend in recent years among policymakers at all levels of government has been to reform and even eliminate asset limits in income assistance programs to better enable low-income individuals and families to be prepared for emergencies and to save for the future.
- SSI’s antiquated savings caps prevent disabled and older Americans from living in dignity. SSI was established with bipartisan support to ensure that older adults and people with disabilities in the United States “would never have to live on below-poverty incomes.” Yet the program’s outdated eligibility criteria now make it even harder for disabled and older Americans to meet their basic needs—the very opposite of the program’s original intent. The COVID-19 pandemic served as a stark reminder of the importance of emergency savings, and federal agencies such as the Centers for Disease Control and the Consumer Financial Protection Bureau urge Americans to have emergency savings on hand as part of disaster preparedness. Yet under SSI’s current rules, millions of older and disabled Americans are prevented by federal law from having even a rainy day fund to help them stay afloat in the event of a broken furnace, needed car repair, or unexpected medical expense, let alone a natural disaster or pandemic. SSI’s antiquated asset caps also serve as a major barrier for disabled and older people seeking to secure safe and stable housing—or to leave an institution in favor of independent, community-based living—as renting an apartment typically requires an upfront payment of a security deposit as well as the first and last month’s rent. As one current SSI beneficiary said in response to a call by Senator Sherrod Brown for beneficiaries to share their stories on social media about what updating SSI would mean to them: “It will mean that I have options for the future. Right now I have none. I can’t marry. I can’t move. I can’t save. I can’t try to start a business. I’m trapped and trying to survive. It’s an impossible position for anyone who becomes disabled, especially when they’re young.”
- SSI’s antiquated asset limits present barriers to work and opportunity for millions of people with disabilities. More than three decades after the Americans with Disabilities Act (ADA) was signed into law, disabled people in the United States continue to face poverty rates nearly twice as high as their nondisabled counterparts, due in large part to a broad array of barriers to employment, including persistent ableist myths and stereotypes that cause hiring discrimination to remain widespread even in 2023. Fortunately, a growing number of businesses have begun prioritizing disability inclusion in hiring, recognizing it as a win–win; however, several of the nation’s largest employers—such as J.P. Morgan Chase and Microsoft—as well as the Chamber of Commerce, have noted that SSI’s outdated asset rules serve as a major barrier to inclusive hiring and employment. For example, a 2022 J.P. Morgan Chase report examining the economic impacts of SSI’s asset limits found that they create barriers to employment and career advancement; restrict saving for education, retirement, and unexpected expenses for disabled people and families with a disabled member; and that updating and simplifying SSI’s asset limits would help expand economic opportunity and mobility for people with disabilities while advancing a more inclusive workforce. Updating SSI’s asset limits would remove a major barrier to employment for disabled people; reduce a significant burden for employer benefits teams tasked with ensuring disabled employees’ income and health insurance is not unintentionally harmed by a raise or a bonus; and move the needle significantly towards improving the dismal economic picture for disabled workers in the United States.
- SSI’s out-of-date asset limits are extremely costly and burdensome for SSA to administer. Because SSI’s asset caps are so low, administering this policy is extraordinarily expensive for the Social Security Administration. As a result, according to analysis by the Niskanen Center, while SSI benefits equal just 5 percent of SSA’s outlays each year, outdated and complex rules like the program’s asset limits mean the cost of running SSI amounts to a staggering 35 percent of SSA’s budget. Put differently, administering SSI’s asset limits and other outdated rules costs roughly 80 percent of what it costs SSA to run the much-larger Social Security program, which serves eight times as many people as SSI. Updating SSI’s archaic asset caps would greatly simplify one of the agency’s most burdensome and costly workloads, saving taxpayer dollars and freeing up SSA’s overburdened employees. What’s more, SSI’s too-low asset limits also result in needless churn for SSA, as beneficiaries face suspension or even termination of survival income—as well as the health insurance through Medicaid that comes with SSI—if they amass even a few dollars over the $2,000/$3,000 limits. This only compounds SSA’s already heavy administrative workload, while creating immense hardship and stress for beneficiaries and their families, and forcing many to seek out legal assistance to help them navigate the process of maintaining or regaining eligibility for the income and health coverage they rely on to make ends meet.
- Americans across party lines agree: SSI’s out-of-date asset limits are due for an upgrade. Even amidst historic political polarization in the United States, updating SSI’s asset limits is one issue Americans of all political stripes can agree on. According to polling by The Century Foundation and Data for Progress conducted in April 2022, more than eight in ten Democrats, more than seven in ten Independents, and more than seven in ten Republicans support updating SSI’s asset limits to $10,000 for individuals and $20,000 for couples and indexing the limits to inflation moving forward. This proposal enjoys support from more than eight in ten disabled voters, as well as nearly three-quarters of nondisabled voters. Most Americans would like to see policymakers go even farther; more than six in ten Americans support eliminating SSI’s asset limits altogether. It’s not just everyday Americans who agree on this issue across party lines; updating SSI’s asset limits is an issue that has brought together leading conservative and progressive social insurance experts who agree on little else.
The Road Ahead
As Senator Sherrod Brown put it during a 2021 Senate Finance Committee hearing on the need to update SSI: “Poverty in America is a policy choice. And it’s up to this Committee and this Congress to finally make a different choice. There are millions of people with disabilities and seniors relying on us to act.”
While updating SSI’s asset caps was already long overdue well before recent trends in inflation, these reforms are even more urgently needed now as inflation continues to rise, squeezing low-income individuals and families the hardest. Meanwhile, adding even further urgency to this common-sense reform, the COVID-19 pandemic spurred the largest influx of new entrants to the disability community in modern history due to millions with long COVID, many of whom will need to turn to SSI to stay afloat.
Critically, policymakers shouldn’t stop at updating SSI’s asset limits. Other outdated components of SSI include income rules that have never been adjusted for inflation since 1972 when the program was signed into law; marriage penalties that keep SSI beneficiaries from marrying the person they love; and an antiquated prohibition on “in-kind support and maintenance” that penalizes SSI beneficiaries for accepting as a bag of groceries or a couch to sleep on to get them off the street. As bipartisan momentum for bringing SSI into the twenty-first century continues to grow, these similarly overdue reforms should be prioritized as next steps ripe for future bipartisan action.
But for now, federal policymakers should seize this rare opportunity for bipartisan cooperation and act swiftly to reform SSI’s asset limits so that the federal government no longer forces SSI recipients and their families to choose between survival income today and economic security tomorrow. SSI beneficiaries have waited long enough.