January 14, 2022

ICYMI: At Aging Hearing, Warren Calls on Congress to Make Urgent Reforms to SSI Program

Outdated program leaves nearly half of low-income recipients, including seniors and people with disabilities, in poverty

Warren’s SSI Restoration Act would raise the SSI benefit rate, and revise outdated rules that effectively serve as barriers to saving, barriers to financial independence, and barriers to getting married

Video of Hearing Exchange

Washington, D.C. — In case you missed it, yesterday United States Senator Elizabeth Warren (D-Mass.) highlighted the need for Supplemental Security Income (SSI) reform during the Special Committee on Aging hearing. While SSI’s original goal was to ensure that no senior person with a disability would have income below-poverty-level, outdated rules have trapped four out of ten recipients in poverty. 

SSI is an important lifeline for 8 million low-income seniors and people with disabilities, but it's outdated, punitive rules squeeze too many struggling families out of the program and trap many recipients in poverty. The average monthly SSI benefit is below $600, which, according to Cindy Hounsell, President and Founder of the Women’s Institute for a Secure Retirement, would keep many elders in poverty. To make ends meet, an SSI recipient might consider working, despite disability, age, or needing to care for a child with disabilities. However, the most a recipient can earn in income before losing benefits is $65 a month. Additionally, collecting more than $20 a month in Social Security would reduce SSI benefits. SSI beneficiaries are not allowed to have more than $2,000 in savings, including in retirement accounts. Married recipients also receive lower SSI benefits and have additional asset limits. SSI recipients can even be punished for receiving groceries from a friend, or housing from family.

No matter which avenue SSI recipients try to take to lift themselves out of poverty, they will be penalized under current law. 

Senator Warren concluded by calling for the passage of the SSI Restoration Act, which would raise the SSI benefit rate and reform other SSI rules. 

In addition to co-leading the SSI Restoration Act, Senator Warren called for an increase of Social Security and disability benefits at the start of the COVID-19 pandemic, including unveiling a plan to increase by $200 the monthly benefit for all Social Security, Veterans, and SSI beneficiaries through the end of 2021. 

Transcript: Financial Literacy: Addressing the Unique Just-in-Time Decisions Older Americans and People with Disabilities Face
U.S. Senate Special Committee on Aging
Wednesday, January 13, 2022

Senator Warren: Financial literacy is critical for Americans who are trying to make key decisions like planning for retirement. But low-income families navigating a thin social safety net that gives them too little help, all the education and counseling in the world can’t magically make 2 + 2 add up to 10.  

So, I want to start. Take a look at Supplemental Security Income, a part of Social Security. SSI provides a critical lifeline for 8 million low-income elderly and disabled Americans, including over 1 million disabled children and the families that care for them. But right now, our rules are outdated, they're punitive, and they squeeze way too many struggling families out of this program and trap about four out of 10 recipients in poverty.

So, Ms. Hounsell, I'd like to-- You're the President of the Women’s Institute for a Secure Retirement, you help women plan for retirement and financial security. And so, I just want to ask you about how you would counsel a woman who is receiving SSI.

The maximum monthly SSI benefit -- maximum -- is $841 in 2022. The average benefit is below $600.

Ms. Hounsell, is $600 a month adequate to live in financial security, and save for retirement?

Hounsell: Thanks, Senator, for covering that issue. No, it’s not in any way adequate. Obviously, it’s only half of the poverty level for elders. 

Senator Warren: Okay. So, this is not going to work. So, this woman might have to consider working, if she is able, in order to be able to make ends meet. Now, remember, as an SSI recipient, she is elderly or disabled, or caring for a disabled child, so she may not be able to work. Let’s say she is considering it. She's considering working.

Ms. Hounsell, given restrictive SSI rules, would you advise her to go to work?

Hounsell: Well, I mean. Every situation is, you know, different, obviously. But I think I would make the person aware of the amount that she would be allowed to earn, which is a very small amount, and maybe to start looking, you know, for other benefits and things that are available to her that she may not be aware of. But obviously, you cannot earn, I think what it is is less than 75,000-- $75 a month would be for the average person set aside.

Senator Warren: Okay, so if she earns more than-- So, here she is. She's-- Based on the average benefits, she's at half the poverty level, right? 

Hounsell: Right. 

Senator Warren: She is that below the poverty line. And the most she can earn before she starts losing her benefits is, you're telling me, $75 a month, right?

Hounsell: Right. 

Senator Warren: Okay. So, let’s say she’s a senior. How about claiming Social Security? Will that get her out of this problem? 

Hounsell: No. No. Because she’s not allowed to-- she's not allowed to earn, you know, I think it's something like $20 or something would, you know, would stop her there. So, you know, it's unlikely that she would be able to have a job and to do that.

Senator Warren: So she's at half of the poverty level that we've established in this country, and if she goes over $20 in terms of collecting her Social Security, it will just reduce her benefits dollar for dollar. So here she is. She's below the poverty level because of her circumstances. She receives an SSI check, but she’s going to be punished for working, punished for claiming Social Security, and punished if she saves any money.  

And I want to add that one. She will be punished if she saves too much. Because SSI beneficiaries are allowed a maximum of only $2,000 in savings, and that includes their retirement accounts. By the way, she will also be punished for marrying because SSI benefits and asset limits kick in for married recipients. And she will even be punished for receiving groceries from a friend, or housing from her family.

In other words, every avenue she would try to take to lift herself out of poverty is an avenue that she will be penalized for under our current law. 

Now, Ms. Hounsell, I know that you and I agree that financial literacy is important. But, in addition, would reforming the help that SSI recipients get help overcome these barriers to escaping poverty and planning for retirement? In other words, if we just change the law and try to give people more opportunities to get out of poverty when they're getting SSI, would that be helpful? 

Hounsell: Yes. I mean, I don’t think there have been reforms from the time that the bill was introduced in the early 1970s by President Nixon, so I think it's time to make those reforms and change that up. Our office would also check with the person who's contacting us and see whether ABLE accounts are, you know, an option, where the rules are different for the ABLE account disabled. 

Senator Warren: Yeah. Well, thank you. I appreciate it, Ms. Hounsell. You know, after decades of ignoring this problem, it's time for Congress to make reforms to SSI. So right now, I'm working with Senators Brown and Sanders to pass the SSI Restoration Act, which would include raising the SSI benefit rate, and it would also revise a lot of these outdated rules that effectively serve as barriers to saving, barriers to financial independence, barriers to getting married. Including even just $8 billion in the Build Back Better Act to raise SSI asset limits, or $11 billion to raise the earned income disregard, would be a significant down payment on economic justice for SSI recipients and one more reason to pass Build Back Better. 

SSI’s original goal was to ensure that no elderly or disabled American would be forced to subsist on below-poverty-level incomes. And yet, that is exactly what this law has turned into. We can – and we must – change the law so that it fulfills its original goals.