SSI benefits provide a safety net but come with severe asset limits

The federal program for low-income and disabled seniors — known as Supplemental Security Income — includes savings limits for beneficiaries that have largely not been updated since the program was created in 1972.

Individuals receiving Social Security Income (SSI) benefits may have only $2,000 in assets, while couples or single-parent families with beneficiary children may receive $3,000, according to the Center for Budget and Policy Priorities.

The list of assets that count toward the cap includes money in bank accounts, cash, retirement savings, stocks, mutual funds, savings bonds, life insurance, burial funds and household goods, according to the nonpartisan Institute for Research and Policy.

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It may also include assets owned by parents, spouses, or immigration sponsors.

Two categories that do not count include essential residences or vehicles.

Current asset thresholds of $2,000 to $3,000 were set for individuals and couples between 1985 and 1989, according to the research.

This is higher than the original resource limits of $1,500 for an individual and $2,250 for a married couple when the program was created in 1972.

Today, those thresholds are only one-sixth of their 1972 value, notes the Center on Budget and Policy Priorities, and their value drops more each year with inflation.

If indexed for inflation, the 2023 limits would be $9,929 for an individual and $14,893 for a married couple.

In new research, the Center on Budget and Policy Priorities looks at the effects on beneficiaries of increasing or eliminating asset limits imposed by Social Security.

The research states that “an upper bound would encourage—rather than penalize—saving and allow people to keep savings to use when they really need those resources.”

About 100,000 SSI beneficiaries have had their benefits suspended or terminated each year because they exceeded asset limits, according to Kathleen Romig, director of Social Security and Disability Policy at the Center on Budget and Policy Priorities.

It can even happen through a small inheritance or a birthday present. Romig noted that people who cross the line may owe benefits and have to adjust their life plans when they lose their benefit income.

“At Hill, they often talk about waste in terms of government spending,” Romig said. “It’s a waste to have people go through all this.”

The research found that raising the thresholds would not significantly increase enrollment in the programme.

If the limits were raised to $10,000 per recipient and $20,000 per couple, SSI participation would increase by up to 3%, the research found, based on an analysis of Census Bureau data.

One bill — the Supplemental Security Income Recovery Act — calls for raising asset limits to those limits, while also indexing them to inflation.

The bill was proposed last April by two senators from Ohio, Sherrod Brown, a Democrat, and Rob Portman, a Republican. While Portman has since retired, there are plans to reintroduce the proposal.

“We should not be penalizing seniors and people with disabilities in Ohio who are doing the right thing and saving money for emergencies by taking away the money they depend on to live,” Brown said in a statement, while calling the rules “arbitrary and outdated.”

“I plan to reintroduce my bill that would update these rules for the first time in decades to allow recipients to save without jeopardizing their benefits,” he said.

If SSI’s resource limits were raised even further, to $100,000 per beneficiary, about 5% more people would qualify for benefits, according to the Center for Budget and Policy Priorities.

The $100,000 minimum would align with the amount eligible SSI beneficiaries are currently allowed to hold without penalty in ABLE accounts, tax-advantaged savings programs for people with disabilities.

ABLE accounts are currently available to individuals who become disabled at the age of 26. And recent legislation called Secure 2.0 will make it so that the age will be raised to those who are disabled by age 46, which will make it so that the majority of SSI recipients can have these accounts, notes the Center for Budget and Policy Priorities.

Another change — aside from considering retirement accounts — could also help boost eligibility for the SSI program.

The nonpartisan Institute for Research and Policy found that eliminating asset testing entirely would increase participation in the program by 6%.

SSI’s asset limits can make it impossible for recipients to handle financial situations that would otherwise be a little complicated, according to Christine Dama, an attorney with Community Legal Services in Philadelphia, which represents about 1,100 clients in SSI matters each year.

Even if beneficiaries do not have certain assets that the Social Security Administration suspects they do, it may fall on them to provide the necessary paperwork to prove it, according to Dama.

Raising the limits may not only help prevent interruptions in benefits, but it will also help reduce the administrative burden placed on the Social Security Administration to administer it.

Dama noted that higher asset limits will mean the Social Security Administration will no longer have to look at every bank statement, saving time for employees who are already facing high workloads.

About 35% of the Social Security Administration’s administrative expenses are currently devoted to the SSI department, according to the Center on Budget and Policy Priorities.

“It would be an easier program to administer Social Security and save taxpayer dollars,” Dama said of SSI’s asset constraints.