Spotlight Exclusives

New Bipartisan Bill Would Update Outdated SSI Income Limits

Rebecca Vallas Rebecca Vallas, posted on

Advocates have long called for raising the income limits for Supplemental Security Income recipients, many of whom are often left unable to save for emergencies without losing benefits that provide a financial lifeline. On Tuesday, Sens. Bill Cassidy (R-La.) and Sherrod Brown (D-Ohio) introduced a new bill to raise the income limits, the first bipartisan, bicameral legislation to update SSI put forward in nearly 40 years. The legislation would update SSI’s asset limits—which haven’t been adjusted for inflation from $2,000 for individuals and $3,000 for couples since 1984—to $10,000 for individuals and $20,000 for couples, and index these amounts to inflation. Rebecca Vallas, a senior fellow at the Century Foundation, spoke with Spotlight about the new legislation and its potential impact. The transcript of that conversation has been lightly edited for length and clarity.

Remind our readers the basic issue this legislation is aiming to solve

Supplemental Security Income (SSI) was signed into law by President Richard Nixon in 1972, 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.” 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. But because this critical part of America’s safety net has been left to wither on the vine for decades, outdated program rules now consign millions of disabled people and older adults to deep and enduring poverty, when the program was put in place to give them a lifeline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 One of SSI’s most egregiously outdated rules is its antiquated asset limit, which has remained stuck at $2,000 for individuals and $3,000 for couples since Congress last adjusted these amounts for inflation in 1984. These asset caps 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. 

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 Yet, that’s exactly what SSI’s pitifully outdated asset limits now do.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.

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.

And what exactly would the bill do?

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.

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. The newly introduced 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 to ensure they keep pace with inflation moving forward.

And there’s bipartisan support in both houses of Congress?

With historic levels of polarization dominating American politics, it may seem there’s nothing left and right can agree on. But updating SSI’s asset limits has emerged as an issue that presents a rare opportunity for bipartisan cooperation. The SSI Savings Penalty Elimination Act marks the first introduction of bipartisan, bicameral legislation to update SSI’s asset limits in nearly 40 years. The legislation is championed by Sens. Sherrod Brown (D–OH), Bill Cassidy (R–LA), and Reps. Brian Higgins (D–NY), and Brian Fitzpatrick (R–PA).

Americans across party lines agree: SSI’s out-of-date asset limits are due for an upgrade. 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.

Meanwhile, updating SSI’s asset limits is an issue that has brought together leading conservative and progressive social insurance experts who agree on little else–from the American Enterprise Institute to the Center on Budget and Policy Priorities to the Bipartisan Policy Center, AARP, and a diverse array of disability advocatesadvocates for older adults, antipoverty advocates, social service providers, faith groups, corporate leaders joining over more than 370 advocacy organizations in the effort.

Tell us about the growing business and employer support for the legislation

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.

This legislation would improve the situation, but there are other inequities—what other changes would you like to see.

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. The program’s sub-poverty-level benefit amounts should also be increased, to at least the federal poverty level, so they’re enough to protect people from poverty. 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.

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