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A federal program for low-income seniors and people with disabilities — known as Supplemental Security Income — includes savings limits for beneficiaries that have not been largely updated since the program was created in 1972.
Individuals receiving SSI benefits can only have $2,000 in assets, while married couples or single families with children who are recipients can have $3,000, according to the Center on Budget and Policy Priorities.
The list of assets that count toward the limit includes money in bank accounts, cash, retirement savings, stocks, mutual funds, savings bonds, life insurance, funeral funds and household items, according to the nonpartisan Research and Policy Institute.
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It may also include property owned by parents, spouses or immigration sponsors.
Two categories that don’t count include primary residences or vehicles.
The current asset thresholds of $2,000 to $3,000 for individuals and couples were set between 1985 and 1989, according to the research.
This is up from the original resource limits of $1,500 per individual and $2,250 per couple when the program was established in 1972.
Today, those thresholds are only one-sixth their 1972 value, the Center on Budget and Policy Priorities notes, and their value continues to decline each year with inflation.
If indexed to inflation, the 2023 limits would be $9,929 for an individual and $14,893 for a couple.
In new research, the Center on Budget and Policy Priorities considers the effects of increasing or eliminating asset limits that SSI has on recipients.
“A higher limit would encourage – rather than penalize – saving and allow people to retain savings to use when they actually need those resources,” the research said.
About 100,000 SSI recipients have their benefits suspended or terminated each year because they exceeded asset limits, according to Kathleen Romig, director of Social Security and Disability Policy at the Center on Budget and Policy Priorities.
This can be triggered even by a small inheritance or birthday present. People who exceed the limits may owe benefits and have to adjust their life plans when they lose benefit income, Romig noted.
“On the Hill, they often talk about waste in terms of government spending,” Romig said. “This is such a waste to put people through all this.”
The research found that raising the thresholds would not dramatically increase enrollment in the program.
If the limits were raised to $10,000 per recipient and $20,000 per couple, SSI participation would increase by as much as 3%, the research found, based on an analysis of Census Bureau data.
One account – the one Supplemental Security Income Recovery Act – calls for raising asset limits to these thresholds while indexing them to inflation.
The bill was introduced last April by two senators from Ohio, Democrat Sherrod Brown and Republican Rob Portman. While Portman has since left, there are plans to reintroduce the proposal.
“We should not punish seniors and Ohioans with disabilities who are doing the right thing and saving money for an emergency by taking away the money they rely on,” Brown said in a statement, calling the rules “arbitrary and outdated.”
“I plan to reintroduce my bill that would update these rules for the first time in decades so that beneficiaries can save without jeopardizing their benefits,” he said.
If SSI resource limits were raised even further, to $100,000 per recipient, about 5% more people would qualify for benefits, the Center on Budget and Policy Priorities found.
That $100,000 limit would be in line with the amount SSI recipients can currently hold without penalty in ABLE accounts, tax-advantaged savings programs for people with disabilities.
ABLE accounts are currently available to individuals who become disabled at age 26. Recent legislation called Secure 2.0 will raise the disability age to 46, making the majority of SSI recipients eligible for these accounts, the Center on Budget and Policy Priorities notes.
Another change—excluding consideration of retirement accounts—could also help strengthen eligibility for the SSI program.
Eliminating the asset test entirely would increase participation in the program by 6%, the nonpartisan research and policy institute found.
SSI asset limits can make it impossible for recipients to deal with financial situations that are even a little complicated, says Kristen Dama, an attorney with Community Legal Services of Philadelphia, who represents about 1,100 clients in SSI matters each year.
Even if recipients don’t have certain assets that the Social Security Administration believes they have, it may be up to them to provide the necessary paperwork to prove it, according to Damo.
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Increasing the limits can not only prevent interruptions in benefit payments, but also reduce the administrative burden on the Social Security Administration.
Higher asset limits would allow the Social Security Administration to no longer have to look at every single bank statement, Dama noted, saving time for employees who already face heavy workloads.
About 35% of the Social Security Administration’s administrative spending is currently devoted to administering SSI, according to the Center on Budget and Policy Priorities.
“It’s going to be an easier program to administer for Social Security and it’s going to save taxpayer dollars,” Dama said of loosening the SSI asset limit.