Don’t make it impossible for people with disabilities to save money
SSI provides a small income to those who are limited in how much they can work because of age or disability and who lack savings to fall back on.
Because of his autism, Gyasi BurksAbbott has struggled to hold a job that lets him be fully self-supporting. For years in the 1990s, federal Supplemental Security Income helped Burks-Abbott stay afloat. But whenever he found a part-time job or worked for minimum wage at a program for people with developmental disabilities, the joint bank account he held with his mother would build up, and he would get a call from the Social Security office. If the account exceeded $2,000, he would lose SSI. He had to think carefully about what jobs he could accept, since the salary could jeopardize his benefits without paying him enough to live on.
Setting aside some money for emergencies is one of the first tips financial advisers often give. But as Burks-Abbott experienced, the low asset limit for the program creates a perverse disincentive against earning and saving.
“I think how much stress occurred for both me and my mom when I was in my late 20s and early 30s that wasn’t related to my disability per se,” Burks-Abbott said. “It was related to my interface with the Social Security system.”
Burks-Abbott, 50, ultimately qualified for disability benefits that weren’t means-tested. Today, he lives in an affordable housing apartment in Bedford and works in disability-related consulting and teaching.
Supplemental Security Income was started in 1972 as a last-resort cash assistance program for low-income people who have a disability or are age 65 or older. It provides a small income to those who are limited in how much they can work because of age or disability and who lack savings to fall back on.
Some limit is justified. But the current SSI asset limit is far too low. Under federal law, any individual who accumulates savings of $2,000, or $3,000 for a married couple, becomes ineligible for assistance. (A person’s home, car, household goods, and certain financial resources like burial funds are excluded.)
A bipartisan bill introduced in the last session of Congress by Ohio Senators Sherrod Brown, a Democrat, and Rob Portman, a Republican, would have increased the asset limit to $10,000 per beneficiary and $20,000 for a married couple, and adjusted the limit for inflation each year.
The asset limit has not been updated since 1989, and it makes saving for an unexpected expense nearly impossible. Someone can get stuck in a bad living situation because they cannot save enough to move into a new apartment that requires paying first and last month’s rent and a security deposit. A recipient can’t save to pay for a college class or fix a car.
“The asset limit means SSI recipients can’t have any money put aside for any kind of emergency,” said Linda Landry, senior attorney at the Boston-based Disability Law Center. “It really keeps SSI recipients trapped and in poverty.”
The left-leaning think tank Center on Budget and Policy Priorities notes that if the asset limits set in 1972 ($1,500 for an individual, $2,250 for a couple) had been indexed to inflation, they would now be $9,929 and $14,893.
Recipients of SSI include blind or disabled children and adults, as well as adults over 65. According to the Washington, DC-based advocacy group Justice in Aging, there are 7.5 million US residents receiving SSI, and their average monthly payment is $675. The maximum federal benefit is $914 for an individual, but that amount is reduced when someone has other income.
Having an asset limit makes some sense, since it reserves government assistance for those most in need. But keeping it so low that it discourages saving and makes it impossible for recipients to handle emergencies harms beneficiaries while adding administrative complexity.
If a recipient saves more than $2,000 and still gets benefits, the government tries to claw back the money as an overpayment. Kate
Lang, director of federal income security for Justice in Aging, said often the Social Security Administration will get data from a bank account and flag money that should not count toward the asset limit, like a recent tax refund. The burden is then on the recipient to appeal.
“We see a lot of administrative churn because of the low asset limit,” Lang said.
Raising the asset limit to $10,000 would increase participation in SSI by 3 percent, or around 224,000 people, according to the Center on Budget and Policy Priorities. It would cost an additional $8 billion over 10 years in SSI spending, according to Social Security actuaries. There may be additional Medicaid costs since in most states, receiving SSI makes someone eligible for Medicaid.
Other programs have eliminated low asset limits. The Affordable Care Act let states eliminate asset tests for Medicaid recipients under age 65. In Massachusetts, MassHealth is now provided to non-elderly adults based on income, not assets, although asset limits remain for older adults and those in long-term care facilities.
Congress helped some people with disabilities avoid the asset limit with the 2014 creation of ABLE Accounts, where people disabled before age 26 can save money without losing SSI eligibility. But according to the Center on Budget and Policy Priorities, fewer than half of SSI beneficiaries are eligible for ABLE Accounts, and only 137,000 accounts have been opened nationwide. Even fewer people are enrolled in Social Security-run work incentive programs, which aim to let people work without jeopardizing their benefits. Ari Ne’eman, a disability rights advocate and Harvard PhD candidate, said the programs are complicated, so they are used mainly by those with means, like a middle-class parent saving for their child with a disability.
A 2021 bill sponsored by several Democrats that would have broadly overhauled SSI failed to gain traction in Congress. The 2022 BrownPortman bill, a version of which is expected to be reintroduced this fall, focuses solely on lifting the asset limit.
Allowing low-income people who are elderly or disabled to save a little bit of money is something politicians from both parties should be able to get behind.