Authors’ note: The disability community is rapidly evolving to use identity-first language in place of person-first language. This is because it views disability as being a core component of identity, much like race and gender. Some members of the community, such as people with intellectual and developmental disabilities, prefer person-first language. In this issue brief, the terms are used interchangeably.
Supplemental Security Income (SSI) is a means-tested federal program administered by the Social Security Administration that provides basic income support to people with little to no income and few or no assets and who otherwise qualify: adults with severe disabilities who are unable to work, children with severe disabilities, and people ages 65 and older. In January 2024, 6.3 million disabled people and 1.2 million “aged” beneficiaries received support from SSI.1 SSI is the only source of income for 57 percent of beneficiaries2 and lifted 2.5 million people out of poverty in 2022.3 The majority—52 percent—of SSI beneficiaries are women or girls, meaning SSI is especially vital to the well-being of the most economically vulnerable women.4
SSI can help people avoid the most extreme material hardships, but inadequate benefits, restrictive program rules, and administrative burdens5 can trap recipients in a vicious cycle of poverty and financial fragility.6 New Center for American Progress analysis of household finances reveals that SSI households face elevated financial risks compared with non-SSI households with similar incomes. This analysis also finds that despite the fact SSI households carry less debt, their liquid savings are more leveraged. This is largely because SSI rules prevent beneficiaries from building precautionary liquid savings.
Inadequate benefits, restrictive program rules, and administrative burdens can trap recipients in a vicious cycle of poverty and financial fragility.
Modernizing SSI’s outdated limits on assets and income as well as increasing benefits to ensure they cover basic needs—including by doubling benefits for married partners to provide marriage parity—would allow people who rely on SSI to better manage the impact of unexpected expenses, avoid risky leverage, and build financial resilience. Pending legislation—including the SSI Savings Penalty Elimination Act, which would update asset limits, and the more comprehensive SSI Restoration Act—would bring long-overdue reforms to SSI.7
Low benefits and outdated rules leave beneficiaries with few assets
Despite Congress’ intent for SSI to ensure “that the nation’s aged, blind, and disabled people would no longer have to subsist on below poverty incomes,”8 in 2021, 4 in 10 SSI households still had incomes below the federal poverty level (FPL) even with their SSI benefits.9
SSI is described as “assistance of last resort,”10 meaning that benefits are offset by other income or resources. To receive full benefits, people cannot have more than $65 in earned income and $20 in unearned income each month—including noncash—“in kind” forms of support from family or others.11 Congress has not increased these income limits since SSI was established in 1972.12 In addition, SSI has asset limits of just $2,000 for individuals and $3,000 for couples, which penalizes couples in which both partners receive benefits.13 These asset limits have been updated only once since 1972;14 if fully adjusted for inflation, they would be about five times higher today.15 SSI income and asset tests also fail to account for the greater income needs that disabled people have.16
As a result of low benefits and outdated income and asset caps, SSI households have vastly fewer assets than households that do not receive SSI benefits. At all income levels, 1 in 5 SSI households have no liquid assets, compared with only 1 in 20 non-SSI households.17 Comparing only households with similar incomes, those relying on SSI are less likely to have assets, and the value of their assets is only a fraction of the value of assets of households without SSI. (see Figure 1) Program rules that discourage the accumulation of assets may reinforce hardships that female beneficiaries experience given that, in general, women tend to face greater difficulties building wealth than men.18 Additionally, women with disabilities are more likely to be poor than both men with disabilities and individuals without disabilities; stringent income and asset limits, therefore, may have an even greater negative effect.19
ABLE accounts
Pursuant to the 2014 Achieving a Better Life Experience (ABLE) Act, certain people with disabilities are eligible to save in tax-advantaged ABLE accounts while not running afoul of SSI’s asset and income limits. Funds in ABLE accounts can be used for qualified disability-related expenses, such as housing, education, transportation, health, and other expenses. However, only people who become disabled by age 26 are eligible, representing less than half of current SSI beneficiaries.20 And while eligibility will be expanded when the age limit increases to 46 in 2026,21 takeup of ABLE accounts has been extremely low. Only 150,000 accounts have been opened to date across the country,22 and less than 1 percent of eligible SSI beneficiaries have established an ABLE account.23 This low takeup likely reflects SSI recipients’ limited financial resources and lack of eagerness to engage with the administrative complexities involved with opening and maintaining a special purpose account. Another consideration is that a state Medicaid agency may claim funds in the account after the recipient passes away to offset Medicaid expenses paid on the beneficiary’s behalf.24 Therefore, the accounts may not be useful for disabled individuals with high medical expenses and high mortality rates.25
Households that rely on SSI are less likely to carry debt
SSI’s outdated benefit, income, and asset limits make it impossible for beneficiaries to build an adequate financial cushion to guard against unexpected expenses or plan for large, necessary purchases. For people on SSI, financing for ordinary things such as a car or home repair, a medical need, a security deposit for a new apartment, or property taxes becomes far more complicated and may only be possible if they take on debt and the interest and fees that come with doing so. This may be especially true for women, who experience greater financial insecurity in general.26 At the same time, people on SSI, like others with low incomes, are unlikely to obtain credit on the same terms as those with higher incomes, resulting in higher interest rates and fees and potentially contributing to less observed borrowing.27 Lending discrimination against disabled people may also be at work.28
On net, SSI households are much less likely than other households to carry debt. At all income levels, only 54 percent of SSI households have any form of debt, compared with 74 percent of non-SSI households.29 Restricting the comparison to non-SSI households with similar incomes also reveals less frequent borrowing among SSI households. When SSI households do borrow, the median value of their total debt is far below that of non-SSI households. (see Figure 2)
Despite less borrowing, debt poses greater risks for SSI households
Although SSI households are less likely to have debt and carry lower amounts of debt on average, borrowing results in their assets being more leveraged. Leverage is a measure of financial risk that compares the size of a household’s debt to its ability to pay back that debt.
Across the board, SSI households have debt-to-income ratios that are half as large as those of non-SSI households, suggesting that they are cautious in taking on debt, face barriers to accessing credit, or both. Ratios of debt to liquid assets paint a more worrying picture, with wide gaps in liquid asset leverage between SSI and non-SSI households. For poor SSI households—those with incomes at or below the FPL—total debt is roughly 38 times the value of their liquid assets, compared with roughly 13 times the value for poor non-SSI households. For near-poor households—those with incomes just above the FPL to two times the FPL—total debt is about 18 times greater than liquid assets for SSI households, compared with about 11 times greater for non-SSI households. (see Figure 3)
These data illustrate how the SSI asset test increases financial risks for beneficiaries by directly interfering with their ability to build financial buffers of liquid assets. Relatively speaking, despite having very low incomes, non-SSI households have greater flexibility to service debt out of either income or liquid savings. SSI households, on the other hand, need to rely more on monthly income to service debt, which simultaneously crowds out spending on basic needs and heightens the risk that an unforeseen financial stressor such as a medical bill or car repair quickly spirals into a full-blown crisis such as a foreclosure or eviction.
Most SSI recipients are women
In December of 2022, 3.6 million women and nearly 1 million children received support from SSI.30 More than half of adult SSI recipients—55 percent—are women.31 This imbalance reflects gender-based economic disparities that leave women more likely to lack income and resources and more likely to need safety net benefits such as SSI.32 Women of color are overrepresented among women receiving SSI, reflecting how structural racism compounds gender inequities: From 2021 to 2022, 26 percent of women beneficiaries were Black, 6 percent were Asian, and 63 percent were white, while 22 percent were Hispanic of any race.33 Women who benefit from SSI include those discussed in the lists below:
Disabled women:
- 1 million disabled women between the ages of 18 and 64 received SSI in December 2022.
- Women represent half of disabled adults under age 65 receiving SSI.34
- Health care costs are five to six times higher for people with disabilities,35 and not all needs are covered by Medicaid or Medicare, making SSI a lifeline to fill gaps between women’s available resources and basic needs.
- Families that include a disabled person require 28 percent more income to live at the same standard as a family with no disabled members.36
Older women:
- More than 1.5 million women ages 65 or older received SSI in December 2022.
- Women represent nearly two-thirds of SSI beneficiaries ages 65 and older.37
- Beyond the cumulative effects of gender-based economic disparities,38 women’s longer average life spans39 raise the risk of outliving one’s savings, contributing to women’s greater reliance SSI at older ages.
Women raising disabled children:
- 997,109 disabled children received SSI benefits in December 2022.40
- During the same time period, two-thirds of children receiving SSI were being raised by their mothers alone.41
- SSI lifted 291,000 children out of poverty in 2022.42
- Women often face steep obstacles to finding employment that is compatible with caring for a disabled child, including access to paid43 or job-protected leave44 and child care that meets children’s needs.45 SSI benefits help families meet their children’s basic needs.
Conclusion
People of all ages and varying life circumstances rely on SSI benefits for protection against deep poverty. But updates are long overdue after decades of neglect. Previous research has noted that SSI benefits and income and asset limits not only lag far behind living costs,46 but also undermine labor force participation and savings47 and are administratively burdensome for beneficiaries48 and the Social Security Administration.49 The Center for American Progress has previously made recommendations50 regarding updating SSI benefit levels, income and asset limits, and reducing administrative burdens on beneficiaries.51 These recommendations would ensure SSI delivers on its promise to support beneficiaries in meeting their basic needs, escaping poverty, and avoiding excessive financial risks.
The authors would like to thank Amina Khalique for fact-checking; Mia Ives-Rublee, Sara Estep, Alan Cohen, Lily Roberts, and Emily Gee for their reviews; and CAP’s Editorial and Art teams for their guidance.
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