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Legislators: The Country's Biggest Welfare Program Is Due for an Upgrade

Older woman looking at her bills and receipts for the month.

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Key Takeaways

  • Supplemental Security Income (SSI) provides financial support to individuals with disabilities or older adults that lack resources.
  • But the program hasn't been updated since its inception in 1974.
  • New legislation advocates for increasing monthly payments, along with other changes, to lift recipients out from under the federal poverty level.

Costs of living are skyrocketing all over the nation. But benefits for disabled people and older adults who are struggling financially aren't.

For people with disabilities or those who have experienced factors affecting their ability to work, Social Security benefits may never kick in. Supplemental Security Income (SSI) is intended to fill in the gaps.

Founded in 1972 under the Nixon administration, the program is meant to provide basic income adequate for the cost of living. Unfortunately, the amount it pays out hasn't changed since its inception, and strict qualification guidelines leave many of its recipients in poverty.

Now, legislators are introducing new legislation hoping to change that. The Supplemental Security Income Restoration Act of 2021, introduced to the Senate in June, attempts to bring this much-needed program up to date.

The act is sponsored by U.S. Senator Sherrod Brown (D-OH) along with Senators Bernie Sanders (D-VT) and Elizabeth Warren (D-MA), among many others.

What is SSI?

While its counterpart Social Security gets more press, SSI is intended for those whose benefits and overall income don't cover basic living expenses.

SSI provides monthly payments to help people meet basic needs for food, clothing, and shelter. Currently, the program supports nearly 8 million people, making it the biggest welfare program in the country. SSI acts as the only source of income for roughly 60% of recipients.

In order to qualify, you must be:

  • At least age 65 or blind or disabled
  • Have limited income
  • Have limited resources
  • Be a U.S. citizen, U.S. national, and reside in the United States, the District of Columbia, or the Northern Mariana Islands (some exceptions apply)

The financial limits placed on recipients are meager. Recipients may currently only have $2,000 in resources, or things they own such as a savings account, or $3,000 as a couple. In addition, any earned income lowers the amount of the monthly payment.

Even when receiving the maximum payment of $794 per month, the benefit keeps recipients far below the federal poverty line of $12,880 per year for an individual.

Legislation Seeks to Update the Program

Now, new legislation was introduced in both the House and the Senate to bring SSI up to modern-day standards.

The bill seeks to increase monthly payments and the safety net available to Americans who benefit from the program. According to Brown's website supporting the bill, legislators want several key factors addressed.

The bill would:

  • Raise the amount of the benefit to 100% of the federal poverty rate. That means bringing the monthly payment of $794 per individual up to $1,073, a 31% increase. Legislators also want to tie the payments to inflation to avoid a similar cost of living disparity in the future.
  • Update the amount of resources individuals and couples may have. Instead of $2,000 in assets, the bill proposes a $10,000 limit per person.
  • Change the income rules for what recipients may earn, encouraging those that can work to do so. The bill proposes to allow $399 of income from work sources and up to $123 a month from other sources such as pension payments, veterans' benefits, or social security.
  • Stop penalizing couples. Currently, couples receive a lower combined amount of support, with a monthly maximum payment of $1157. The bill would simply double the amount monthly for two people, even when sharing a household.
  • It would eliminate penalties for those with in-kind support, such as lodging or food assistance from outside sources. Even if recipients stay with family or benefit from a food bank or other charity program, their benefits would remain the same.

SSI is paid for through the general tax fund, not payroll taxes, so this bill would not affect current social security benefits.

What This Means For You

If you're disabled, blind, or older than 65 with income restrictions, you may benefit from SSI. The National Council on Aging offers a free and anonymous tool at Benefitscheckup.org to find programs that may help add to your monthly income if you're struggling financially and how to apply.

How This Bill Can Help

These changes could enormously improve the quality of life for people who qualify, Ramsey Alwin, president and CEO of the National Council on Aging, tells Verywell.

"Since its inception, the program has really just provided the bare bones of assistance," Alwin says. "The way the program is structured, it doesn't allow individuals to work in ways that they're able given their circumstances, or to get assistance from friends and family that so often make the difference. It's reinforcing that impoverished status."

While the current maximum benefit is $794, Alwin says, on average, recipients receive an average of $586 a month. The program makes a distinction between earned and unearned income. With strict limits on earned income, like money from social security benefits, SSI benefits are often eliminated due to very modest influxes of money.

And while the program focuses on disabled people, Alwin says that minorities and women are also disproportionally represented among SSI recipients.

"Given the circumstances of cumulative disadvantage women experience over a lifetime, like pay inequality, occupational segregation, or taking time off for those caregiving years, they arrive at old age with far fewer savings and a lifetime of lower wages," Alwin says.

Alwin notes that older adults often must tap into a patchwork of programs, including SSI, to live sustainably, and many rely on family members for shelter and food.

She adds that older adults living on a fixed income also miss out on roughly $7,000 worth of income assistance in food, medicine, transportation, and property tax assistance due to a lack of knowledge of available programs and how to utilize them.

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  1. Social Security. Supplemental Security Income.