The Social Security Administration provides the most extensive social safety net programs in the United States. Supplemental Security Income (“SSI”) pays monthly minimal income to seniors and people with disabilities who receive very low or no Social Security and who are extremely poor. This program is funded from the general tax revenue. SSI is a companion program to the Social Security program which provides crucial economic security through retirement and disability to individuals who paid into the program through payroll taxes. In fiscal year 2021, 7.875 million people are estimated to receive SSI benefits totaling $57.5 billion and 65.767 million people are estimated to receive Social Security benefits totaling $1,145.5 billion.
As crucial as the SSI program is, the benefits are modest. The stated goal of the SSI program, enacted in 1972, is to provide positive assurance that the country’s aged, blind and disabled population would no longer have to subsist on below-poverty-level income. In April 2020, 8 million people received SSI benefits that averaged monthly $576.47. SSI recipients are allowed $20 of income in a month. After that, unearned income, pensions, Social Security benefits, and in kind support of food or housing provided by family or friends reduces SSI benefits dollar for dollar. That amounts to a 100% tax rate. With respect to earned income, the recipient is allowed the first $65 and after that every dollar earned is reduced in SSI benefits by 50 cents. That amounts to a fifty percent tax rate.
Today’s program does not come close to meeting the legislative goal. In 2020 the maximum federal SSI benefit is just over $783/month ($9396 a year). That benefit is less than three-quarters of the federal poverty guideline, which in 2020, is $1063/month ($12760 a year) for an individual. Moreover, the federal poverty guidelines likely underestimate what is needed to subsist. Low income recipients often have to choose between food and other necessities. The Centers for Disease Control (“CDC”) found of all U.S. hypothermia deaths, half occur among persons 65 years or older. The Census Bureau reports that 5.1 million people aged 65 or older in 2018 had incomes below the federal poverty threshold. One in four of those with a disability live in poverty.