Policy Basics: Introduction to Supplemental Security Income
November 23, 2015
What Is the Supplemental Security Income Program?
The federal Supplemental Security Income (SSI) program provides monthly cash assistance to people who are disabled or elderly and have little income and few assets. Congress created SSI in 1972 to replace a patchwork system of federal grants to states.
SSI is distinct from Old-Age, Survivors, and Disability Insurance (OASDI), commonly known as Social Security, though many SSI recipients have worked enough that they also collect Social Security. The Social Security Administration (SSA) runs both programs.
In September 2015, 8.4 million people collected SSI benefits. For nearly three-fifths of recipients, SSI is their only source of income.
Who Qualifies for SSI and What Benefits Do They Receive?
The vast majority of all SSI recipients — 86 percent — are eligible due to a severe disability (including blindness). In September 2015, 1.3 million recipients were children. Since SSI is available only to those who are disabled (or elderly) and who have very low incomes and assets, more disabled children become eligible for SSI when poverty rates rise.
SSI recipients are limited to $2,000 in assets for individuals and $3,000 in assets for couples, with certain exceptions. Because they typically have no other source of income, more than half of recipients receive the basic monthly SSI benefit, which in 2015 is $733 for an individual and $1,100 for a couple.
SSA reduces these amounts for recipients who have other sources of income or who live in a Medicaid facility or with someone who provides support. For example, while SSA exempts the first $20 per month of unearned income when determining a person’s SSI eligibility and benefit levels, any income above that amount from sources such as Social Security benefits, pensions, interest, and child support is subtracted from SSI benefits. Each dollar of earnings above $65 per month typically reduces SSI benefits by 50 cents. Such reductions dropped the average SSI monthly benefit to $539 in September 2015.
Many states supplement the federal SSI benefit, though some have cut those additional payments over the years. In most states, SSI recipients are automatically eligible for Medicaid. Over 60 percent of SSI recipients also get SNAP (food stamps) and about one-quarter receive housing assistance.
How Has SSI Changed Over Time?
Since SSI began in 1974, it has changed from a program that mainly supplemented Social Security income for elderly adults to a broader antipoverty program that aids the disabled of all ages. SSI is increasingly important for children and adults with disabilities, partly as a result of policy changes in 1984 that expanded eligibility based on mental impairments and a 1990 Supreme Court ruling that expanded the SSI disability criteria for children — changes that Congress partly rolled back in the 1996 welfare reform law.
The percentage of people age 65 and older who receive SSI has fallen steadily since its inception. The overall number of people who receive SSI is projected to fall as a share of the population.
How Is SSI Funded?
Unlike Social Security, which is financed by dedicated payroll taxes, SSI is funded from general revenues. SSI expenditures, at a cost of $58 billion in fiscal year 2014, were just 0.34 percent of gross domestic product (GDP) that year. Roughly 93 percent of SSI spending pays for benefits; the rest covers administrative costs.
How Effective Is SSI?
Basic SSI benefits are about three-fourths of the poverty line for a single person. Thus, while SSI alone is not enough to lift someone who lives independently out of poverty, it reduces the number of people in extreme poverty and greatly lessens the burden on other family members. In 2013, the poverty rate among recipients would have been 63 percent without counting SSI payments; the actual rate, including SSI, was 42 percent, an SSA study found.
Still, over two-fifths of SSI recipients live below the poverty line even after taking their benefits into account, and many more needy elderly or disabled persons, including legal immigrants affected by the 1996 eligibility restrictions, do not get benefits.
Ways to Improve SSI
Congress can strengthen SSI by updating the asset and income limits and indexing them to inflation. The asset limits have been frozen since 1989 and the income limits have remained the same since SSI’s launch in 1974; their low levels prevent needy elderly and disabled people from qualifying for the program.
Congress can also improve SSI by increasing the basic SSI benefit, partially exempting retirement savings from the asset limits, and easing eligibility restrictions for legal immigrants.