Income and resource provisions

Transcription

1 THE NEW SUPPLEMENTAL SECURITY INCOME PROGRAM Richard Bell, Division of Supplemental Security Studies Office of Research and Statistics, Social Security Administration On January 1, 1974, the supplemental security income program (SSI) became the vehicle for providing monthly cash benefit payments to the aged, blind, and disabled with inadequate income. This new program replaced the former Federal grants to States for old -age assistance (OAA), aid to the blind (AB), and aid to the permanently and totally disabled (APTD) in the 50 States and the District of Columbia. The SSI program establishes uniform, nationwide basic payment standards and eligibility requirements. It is administered by the Social Security Administration with benefits being paid from U.S. Treasury general funds. In addition, there is provision for of the basic Federal payments. During June 1974, nearly 3.6 million persons received federally administered SSI benefits totalling $448 million. Of this amount, $333 million represented Federal SSI payments and $115 million State supplementary payments. A. DESCRIPTION OF THE PROGRAM Benefits and eligibility requirements The basic monthly Federal benefit amount is $146 for an eligible individual and $219 2/ for an eligible couple, living alone and without any income. However, if the individual or couple is living in another's household and receiving support and maintenance there, the standard payment is reduced by one -third. SSI beneficiaries in public or private institutions, who receive more than 50 percent of the cost of their care from the Medicaid program under Title XIX of the Social Security Act, may receive a maximum payment of $25 per month. Eligible beneficiaries in private institutions whose care is not met from Medicaid funds may receive the standard payment amount of $146. Inmates of public institutions for whom Medicaid is not the main source of support are ineligible for SSI benefits. There is a requirement that the States maintain income at the December 1973 level for an individual converted from OAA, AB, or APTD to the SSI program. Consequently, his December 1973 State public assistance payment plus other income is compared with his basic Federal SSI payment plus current income. If the latter sum is smaller than the former, the difference must be made up in a "mandatory" State supplementary payment. Moreover, "essential persons" are also considered. These are persons (a) whose needs were taken into account for December 1973 in determining the needs of an eligible individual for State assistance under the State plan in June 1973, (b) who live in the same household as the individual, and (c) who are not eligible in their own right or as a spouse for SSI payments. Thus, the only beneficiaries who could receive higher benefits because of the presence of an essential person are those whose State assistance payments in December 1973 took the needs of such persons into account. The increase may be as much as $73 for each essential person. In addition to the "mandatory" payment level maintenance mentioned above, a State may choose to further supplement the Federal SSI payment of beneficiaries irrespective of prior eligibility for OAA, AB, or APTD. The extent of coverage under this "optional" varies from State to State. Some States provide additional benefits for all persons who qualify for basic SSI payments, other States limit supplementation to certain groups, such as the blind or those in domiciliary care facilities. Income and resource provisions There are different kinds of income exclusions. First, on a monthly basis, $20 of income is disregarded, whether earned -- wages, salaries, or self -employment income - -or unearned income, e.g., social security benefits, other governmental or private pensions, veteran's compensation or workman's compensation. In addition, $65 monthly of earned income and one -half of the remainder is also disregarded. Further, there are also a number of special exclusions including the following: certain earnings of a student beneficiary, infrequent or irregular income, income necessary to fulfilling an approved self- support plan of a blind or disabled beneficiary, work expenses of blind beneficiaries, and one -third of support payments made by an absent parent. To be eligible for benefits, the value of a person's resources may not exceed $2,250 if the individual has a spouse with whom he is living; otherwise, their value cannot exceed $1,500. However, there are also a number of resource exclusions. A home, automobile, household goods, and personal effects of reasonable value are all excluded. If the face value of all insurance policies on any one person is less than $1,500, they will not be taken into account. Administration of programs The mandatory and optional program mentioned above can be administered, at the State's discretion, either by the State itself or by the Federal government. In the latter case the State reimburses the amount of the payments made, while the administrative costs are borne by the Federal government. For those States choosing Federal administration of their supplementary payments, there is the advantage of the following "hold harmless" provision. To the extent that the State payments do not, on the average, exceed its "adjusted payment level ", the State's financial liability for the amount of supplementary payments under the program is limited to the total expenditures for 190

2 cash assistance to the aged, blind, and disabled in calendar year 1972; the Federal government pays the rest of the cost of such State supplementary payments. A State's adjusted payment level is the average of payments which individuals, with no other income, received in January The adjusted payment level may also include the bonus value of food stamps. Where payments were less than State standards, there is also provision for adjustment. 3/ B. SUPPLEMENTAL SECURITY INCOME PROGRAM STATISTICS Summary of national data Approximately 3.4 million persons received federally administered supplemental security income (SSI) benefits in May / Of these 2.0 million were awarded benefits on the basis of age, 1.3 million because of disability, and 72,000 on the basis of blindness (table 1). Of those eligible for benefits, 2.9 million had been eligible for State public assistance payments in December 1973 (table 2). The average monthly amounts for the Federal SSI and the federally administered State supplementary payments for aged, blind, and disabled individuals and couples converted from the former State programs were considerably higher than the corresponding amounts for new SSI beneficiaries. The above relationship indicates that the SSI program is reaching a population with higher income than did old -age assistance, aid to the blind, and aid to the permanently and totally disabled (table 4). For both adult individuals and couples the majority had Federal payments only (table 3). However, a substantial number received both Federal and State payments, whereas a relatively small number received only. The average monthly Federal payments were considerably higher than the State payments to individuals, but this margin was small for couples. This difference partially follows from the fact that couples more frequently than individuals have social security benefits which are deducted from the (80 and 66 percent for aged couples and individuals, respectively). Moreover, in some cases the previous State assistance programs treated couples more favorably, relative to individuals, than does the Federal SSI program. Finally, California, which accounts for 30 percent of all couples with federally administered, provides optional monthly payments of $95 to individuals without income and living in their own households; and $230 to couples. Impact of social security benefits About 50 percent of the persons with federally administered SSI payments also received social security benefits (table 6). Although approximately two - thirds of aged SSI individuals had social security payments, only about one -third of blind and one -fourth of disabled adult individuals received such payments. Only 6.8 percent of the children under the program also received social security benefits. The national average monthly for adult individuals were $95.37, $135.22, and $ for the aged, blind, and disabled, respectively (table 4). The relatively greater amounts for the blind and disabled reflect the fact that there is a larger proportion of aged with social security benefits than for the blind and disabled. In fact, the amount of social security payments accounts for almost all the countable income used in determining the SSI benefits. Theoretically if social security benefits were the only source of income, for a given subset of Federal SSI individual beneficiaries, the average Federal SSI monthly benefit, B, would be computed as follows :. B where, 140I I2 + 25I3 I I3 20) P, Il = number of individuals living in their own household, 12 number of individuals living in another's household, I3 P S number of individuals living in institutions covered by Medicaid, proportion of individuals with Federal SSI payments in concurrent receipt of social security benefits, = average social security benefit of individuals with Federal SSI benefits having social security benefits. Analogously, for couples we have: I B Il+I2+I3 (S - 20) P, where all the variables now refer to numbers of and averages among couples. Deviations between the tabulated average monthly Federal SSI amount and the number computed by the above formula measure the effects of earned and unearned income (other than social security) upon the reduction of SSI benefits. In particular, the small differences between these tabulated and computed amounts given below indicate the impact of social security benefits and the limited effect of earned and other unearned income upon the determination of the overall SSI average payment amounts. 191

3 Value (based on March 1974 data) Aged Disabled Individuals Couples Individuals Couples Computed value $81.53 $ $ $ Tabulated value The slight excess of the computed value over the tabulated value 5/ reflects the contribution of earned and other unearned income to the total income of SSI beneficiaries. The relatively small amount of earned income and of unearned income among SSI beneficiaries receiving OAA, AB, and APTD in December 1973 should be noted (tables 7 and 9). This further points to the importance of social security benefits to the low income population receiving supplemental security income. C. APPLICANTS UNDER THE SSI PROGRAM Although payments under the supplemental security income program began in January 1974, applications for benefits were taken by Social Security Administration district offices beginning July Applications during the make -ready period (July - December 1973) During the 6 -month period July- December 1973, 507,400 applications for benefits under the SSI program were filed with Social Security Administration district offices. Of these, 325,600 came from persons over 65 years of age, and 181,800 from applicants under 65 claiming blindness or disability. It should be noted that a significant number of the SSI applicants also filed for the former State programs during the make -ready period. Some of these individuals were awarded benefits under the State programs and were subsequently converted to the SSI program on January 1, 1974 along with all the other OAA, AB, and APTD beneficiaries. The number of such duplicate applicants was approximately 200,000. Applications during January -June 1974 During the first 6 months of the SSI program, 1,314,000 people filed for benefits, 544,000 individuals were aged applicants; the remaining 770,000 claimed blindness or disability (table 11). As of early July, one million applications had been fully processed, resulting in payment awards in about two - thirds of the cases and a finding of ineligibility in about one -third. Of the half -million cases in process, the majority are disability cases that require medical determination and review in State agencies. D. THE ORS STATISTICAL PROGRAM FOR SSI The Division of Supplemental Security Studies in the Office of Research and Statistics has the responsibility for collecting and analyzing data on the characteristics of participants in the new program and the amounts they receive. In addition, information will be developed on the dynamics of change in beneficiary circumstances. The Division is also responsible for providing estimates of program participants and costs for budgetary purposes, legislative planning, SSA workload determinations, and research into measures of income adequacy as they affect the low income group. Some of the Division's activities are described below: The Survey of Low Income Aged and Disabled(SLIAD) is a two -stage panel study providing data to assess the effects of SSI on its target population. Information concerning income, assets, debts, household expenditures, health, mobility, employment, social interaction, adequacy of and attitudes towards welfare assistance was obtained by means of personal interviews with 18,000 aged, blind, and disabled during the last three months of The same sample respondents will be asked identical questions during the last three months of By providing descriptive profiles of beneficiaries prior and subsequent to the initiation of SSI, analyses will be developed on the extent to which SSI benefits secure standards of living consonant with program intent. SLIAD consists of four independent samples. To allow a comparison of SSI with the former State public assistance programs, two samples were selected, the first from a frame consisting of persons with OAA, and the second, those with AB and APTD. Further, to gauge the impact of SSI upon the general population, two additional samples were taken from the universe of low income persons, not necessarily receiving State assistance payments. For the low income general population sample, the frame consists of aged or disabled individuals in the CPS sample with incomes of less than $6,500 if married or less than $5,000 if living alone. The sample was selected by the Bureau of the Census under standard CPS procedures. The Longitudinal Supplementary Security Income Sample (LSSI), housing 550,000 cases selected from the SSI applicant universe, is designed to provide statistical data based on SSI program records for in -depth analyses of selected areas. 192

4 In particular, data will be gathered to reflect changes in incomes and their effects on benefit levels, residence changes; and for disabled persons -- primary and secondary diagnosis, occupation and education. The LSSI design is a stratified sample, where each State -category (aged, blind, or disabled) group, based on initial application, represents a stratum. Digital sampling, based on digits of the social security numbers is used for selection of cases within the stratum. The sample size, 550,000, was determined so that the maximum sampling variability for the proportion of cases in a given State possessing a particular attribute would be no greater than +2 percent at the 95 percent confidence level. Program statistics Statistics relevant to beneficiaries with federally administered payments (Federal SSI or federally administered ) are being obtained from the Supplemental Security Record 6/ on a universe basis. Similar information concerning State administered is being collected separately from the States with these programs. The SSI program --Title XVI of the Social Security Act - - -was established under the 1972 Social Security Amendments. 2/ Prior to July 1, 1974, these amounts were $140 and $210 respectively. 3/ For a detailed account of the basic provisions of the SSI program see James C. Callison, "Early Experience Under the Supplemental Security Income Program ", Social Security Bulletin, June 1974, pp / Since May is the latest month for which comprehensive data are available at the time of this writing, most of the figures in this section are based on experience during that month. 5/ The payments for essential persons corresponding to each category is not available at this time. However, allocating the total number, 117,200 of essential persons to each category and assuming a maximum payment of $70.00 to them, we can adjust upward the computed values for aged and disabled individuals by $3.95 and $1.71, respectively. This correction can explain, moreover, the excess of the tabulated value over the computed value for disabled individuals. 6/ The tape file containing basic data on income, living arrangements, and other characteristics necessary to establish and maintain the eligibility and benefit amounts for all individuals under the SSI program. 193

5 TABLE Supplemental security income for the aged, blind, and disabled: ing federally administered payments and total amount, 1974 Number of persons receiv- Period Number of persons 2/ Benefits (in thousan ds) Aged Blind Disabled Federal SSI 3/ 1974 January 3,215,632 1,865,109 72,390 1,278,133 $365,149 $260,159 $104,989 February 3,236,167 1,882,690 72,584 1,280, , ,686 93,364 March 3,333,017 1,944,966 74,048 1,314, , , ,670 April 3,334,493 1,953,693 73,189 1,307, , , ,092 May 3,425,891 2,016,177 71,833 1,337, , , ,918 June 3,583,894 2,093,301 72,883 1,417, , , ,366 Excludes Figures have not Does not programs. 3/ Does not emergency advance payments made by Social Security Administration district offices. been adjusted for returned checks and refunds of overpayments. include persons receiving only under State -administered include payments for under State -administered programs. TABLE Supplemental security income for the aged, blind, and disabled: Number of persons receiving federally administered payments by type of payment and reason for eligibility, May 1974 Type of payment Aged I Blind I Disabled All persons 3,425,900 2,016,200 71,800 1,337,900 Federal SSI and only 3,135,100 1,988,800 1,146,200 1,437, ,800 1,807,400 1,259, , , ,800 65,600 38,600 26,900 33,200 6,200 1,262, , , ,400 75,800 Converted from State programs 2,927,900 1,664,700 71,000 1,192,200 Federal SSI and only 2,698,000 1,645,700 1,052,300 1,282, ,800 1,506,600 1,024, , , ,000 64,800 38,000 26,800 32,900 6,200 1,126, , , ,800 65,600 Not converted from State programs 498, , ,700 Federal SSI and only 437, ,900 94, ,100 61, , ,200 65, ,300 50, , ,100 28,400 38,600 10,200 Number of persons partly estimated. 194

6 TABLE Supplemental security income: Number of adult units and children receiving federally administered payments by type of payment, reason for eligibility and conversion status, May 1974 Type of payment Adult units Aged Blind Disabled Children Individual Couple Individual Couple Individual Couple Blind Disabled 1,717, ,700 64,000 2,800 1,263,200 23,200 1,900 18,800 1,543, ,300 58,400 2,500 1,193,900 20,700 1,900 18,600 1,056, ,700 34,000 1, ,700 12,600 1,300 14,800 Federal SSI and 487,400 30,600 24,400 1, ,200 8, , ,500 48,100 30,000 1, ,500 10, ,000 only 174,200 17,500 5, ,300 2,600 2/ 200 Converted from State payments 1,421, ,300 63,200 2,800 1,139,700 20,500 1,900 4,700 1,288, ,700 57,700 2,500 1,079,700 18,200 1,900 4, ,700 81,600 33,400 1, ,100 10,400 1,200 3,000 Federal SSI and 426,800 28,100 24,200 1, ,600 7, , ,700 40,700 29,800 1, ,600 10,100 '600 1,800 only 132,900 12,600 5, ,000 2,300 2/ 100 Not converted from State programs 296,500 28, / 123,500 2, ,100 Federal SS! payments 255,200 23, / 114,200 2, , ,700 21, / 88,600 2,200 11,900 Federal SSI and 60,600 2, / 25, / 2, ,800 7, / 34, / 2,200 only 41,200 4, / 9, Number of adult units and children partly estimated. 2/ Less than 50.

7 TABLE 4.--Supplemental security income: Average monthly amount payable June 1, to adult units and children eligible for federally administered payments, May 1974, by type of payment and reason for eligibility Type of payment Adult units Aged Blind Disabled Children Individual Couple Individual Couple Individual!Couple Blind Disabled $ $ $ $ $ $ $ $ Federal SSI and only Converted from State programs Federal SSI and only Not converted from State programs Federal SSI and. only Averages based on 50 or fewer individuals or couples not shown.

8 TABLE Supplemental security income for the aged, blind, and disabled: Number and percentage distribution of persons receiving federally administered payments by reason for eligibility and living arrangements, May 1974 Living arrangement Adults Children Aged Blind Disabled Blind Disabled number 3,425,900 2,016,200 69,900 1,319,100 1,900 18,800 percent Own household Another's household Institutional care covered by Medicaid (Title XIX) TABLE Supplemental security income for the aged, blind, and disabled: Number and percent of persons, adult units, and children receiving federally administered payments May 1974, in concurrent receipt of social security benefits; average monthly amount of social security benefit Classification number With social security benefits Number Percent of total Average monthly social security benefit All persons 3,425,900 1,740, $ Adult units Aged individual 1,717,900 1,132, Aged couple 150, , Blind individual 64,000 23, Blind couple 2,800 1, Disabled individual 1,263, , Disabled couple 23,200 12, Children Blind 1, Disabled 18,800 1, Partly estimated. 197

9 TABLE Supplemental security income for the aged, blind, and disabled: Number and percent of employed persons eligible for previously receiving OAA, AB, and APTD in December 1973; and average monthly earnings Reason for eligibility Number employed Percent with employment Average monthly earnings 55, $ Aged 65 and over 32, Disabled under 65 20, Blind under 65 3, Partly estimated TABLE 8 -- Supplemental security income for the aged, blind, and disabled: Distribution of monthly earnings of employed persons eligible for Federal SSI payments previously receiving OAA, AB, and APTD, December 1973 Earnings Distribution number percent Less than $20 $ and over 55, TABLE 9.-- Supplemental security income for the aged, blind, and disabled: Number and percent of persons eligible for previously receiving OAA, AB, and APTD in December 1973 with unearned income other than Social Security, and average monthly unearned income Reason for eligibility Unearned income Number with unearned income Age 65 and over Disabled under 65 Blind under , ,100 52,300 1,200 Percent with unearned income Aged 65 and over Disabled under 65 Blind under Average monthly unearned income $52.04 Partly estimated. 198

10 TABLE Supplemental security income for the aged, blind, and disabled: Number and percentage distribution of persons under State programs of OAA, AB, and APTD by race and sex, December 1973 Race and sex Aged 65 and over Blind Under 65 Disabled number 3,135,700 1,876,500 49,200 1,210,100 Race Race reported 2,574,300 1,551,300 41, ,500 percent White Negro Sex reported 2,944,200 1,765,000 46,400 1,132,800 percent Men Women Sex Data on races other than white or Negro not available. TABLE Supplemental security income for the aged, blind, and disabled: Number of persons applying for federally administered payments January -June 1974 Year Aged Blind or disabled 1,314, , ,357 January 307, , ,944 February 248, , ,288 March 220,721 89, ,853 April 178,166 67, ,584 May 206,079 75, ,946 June 153,189 54,447 98,