An earned entitlement program may have its first “upgrade” in over 30 years, creating the potential to lift its recipients out of significant poverty.

The Supplemental Security Income program (SSI) was created in 1972 under the Nixon administration to provide financial support to low-income seniors and disabled people. An effort to federalize state-level adult support programs across the country, SSI is a means-tested program—there are financial requirements to be eligible. In the case of SSI, as of its last adjustment in 1989, enrollees cannot have savings of more than $2,000 as an individual or $3,000 as a family. Furthermore, SSI beneficiaries are prohibited from having retirement accounts, life insurance policies, certain types of personal property, funeral/burial policies, and access to other types of income.

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December 2024 Issue

The reality is the current structure of the program and its asset limits ensure that low-income seniors, disabled people, and their families, are never able to move away from a life of poverty, and any attempt to do so would result in a denial of SSI benefits.

To be clear, no one is becoming wealthy on SSI.

As of 2023, program beneficiaries receive a maximum level of benefits of $914 as an individual, or $1,371 for couples per month. This is far below the federal poverty line.

But SSI does help families in need and provides them with a connection to health care coverage, given that if you are eligible for SSI in most states that qualifies you for Medicaid as well. Medicaid benefits are crucial for many people with disabilities and seniors, allowing them access to long-term services and supports including home care and community-based services, which are essential if one wants to remain in their home as opposed to living in a nursing facility.

Even with those benefits, however, the asset limits have created a system in which over 7.5 million people are prohibited from saving or building any sort of wealth for their families. Since the current limit ceiling was set in 1989, the cost of living has increased significantly. At that time, gas was $1.00 per gallon, a gallon of whole milk was $2.30, and a loaf of bread was about $0.60. Today, gas is running an average of $3.59 per gallon, a gallon of milk costs about $4.31, and a loaf of bread cost about $2.50.

For a community already significantly poor, the impact of inflation is magnified for low-income seniors and disabled people.

At the same time, the JPMC Institute has recommended that families maintain a safety net of approximately six weeks of income, or $5,000, in case of an emergency. Current asset limits make this impossible for SSI enrollees. Given that the median rent in the United States is over $2,000, it means that SSI enrollees cannot have even one month’s rent saved in their bank account or they risk losing eligibility for the program.

What does it mean when people with disabilities are prohibited from saving money? It means that there is no safety net for an emergency. It means people with disabilities and their families are one broken wheelchair, one computer virus, one crisis away from falling off a cliff and losing what little security they have.

Asset limits are abjectly anti-family. These antiquated restrictions can force families to have to make unthinkable choices to maintain what little financial security they have. One of those choices is what’s commonly called a “Medicaid Divorce,” which means couples are forced to divorce in order for one spouse, or a dependent child, to be able to maintain health care access. Presently over 1 million children are on SSI, and over 85 percent of individuals on SSI have a significant disability. The asset limits mean their families are prevented from seeking promotions, accepting new jobs, or putting money away for a rainy day for fear that their spouse or child with a disability will lose their benefits.

Policies like this are also bad for the economy because they keep qualified workers who are seniors or disabled out of the job market, for fear of losing access to earned entitlements or losing access to health insurance. JPMorgan Chase’s Policy Center published its own study advocating for asset limit reform as an opportunity to move the stubbornly stagnant employment rate of people with disabilities, which has hovered at 21 percent.

Polling from the Century Foundation and Data for Progress shows that the idea of eliminating asset limits is extremely popular with six in 10 Americans. While proposals recommending complete elimination have not resulted in pending legislation, the potential for reform is on the horizon. The Senate introduced the bipartisan SSI Savings Penalty Elimination Act last month. This legislation would move the amount an individual on SSI can save from $2,000 to $10,000, and the amount a family can save from $3,000 to $20,000. It would also adjust the limit for inflation in the future and exclude retirement savings.

This would be a game changer for the families who depend on SSI for their survival, and it’s clear that others see it that way as well. An exciting and unlikely groups of organizations have come out supporting the legislation, including the US Chamber of Commerce, the National Association of Evangelicals, the AARP, the Bipartisan Policy Center, Catholic Charities, JPMorgan Chase, and Wells Fargo. This clearly demonstrates that momentum for reform is there, and perhaps there is some remaining truth to the bipartisan legacy of the Americans with Disabilities Act, which passed with overwhelming support among lawmakers from both parties.