AARP PUBLIC POLICY INSTITUTE

AUGUST 2021

Research Report

Supplemental
Security Income:
Continuity and

Change since 1974

Urban Institute
Acknowledgments

This brief was funded by AARP’s Public Policy Institute (PPI). I am grateful to PPI and to all funders
who make it possible for Urban to advance its mission.

The views expressed are those of the author and should not be attributed to the Urban Institute,

its trustees, or its funders. Funders do not determine research findings or the insights and
recommendations of Urban experts. Further information on the Urban Institute’s funding principles is
available at urban.org/fundingprinciples.

Jim Palmieri, Joel Eskovitz, and Gary Koenig of AARP and Richard W. Johnson of the Urban Institute
provided helpful comments on earlier drafts.

 

AARP’s Public Policy Institute informs and stimulates public debate on the issues we face as we age. Through research, analysis,
and dialogue with the nation’s leading experts, PPI promotes development of sound, creative policies to address our common need
for economic security, health care, and quality of life.

The views expressed herein are for information, debate, and discussion, and do not necessarily represent official policies of AARP.
Table of Contents

ACKNOWLEDGMENTS... ccccccsessscsnscsesssescsssessnsnsssssssnsesssssesssesssecssasesisensesssssnsasesasecseessensnsnssessessensecseenssasosaaes ii
INTRODUCTION ou... escscssssssssssssssssessssssssessssssssssssessssssssesesnsssssssnesssusssssscsvsssssssnesssessssssesvssssssssessnesssasseseesasesssessnessssssesess 1
THE PROGRAM OF LAST RESORT uc cecsssstecseessensseesssasessessesssesssessnsasessecsesssessnsesesanecsesssenssensneneaaes 1
SSI ENROLLMENT HAS INCREASED OVER TIME AND THE SSI POPULATION HAS BECOME
YOUNGER oessssssssssssssssssssssssssssssssssessssssssssuasscuessssussssnssasussssessssunessnssaseasesseasesnessseesssaesssuasessasnssessssnesssuas 3
SSI’S ELIGIBILITY STANDARDS HAVE ERODED OVER TIME... eesessssssssssescseesenceseesessussseessessereees 5
SSI BENEFITS ARE INADEQUATE occ ecsssssssssessssssssssesssessssscsesseusssssssensesnsesesssensssesseesesasesieensesssessnsasenanes 6
SSI Benefits Relative to POVELtY ......ccsccesssesssessessesseesssssssssssesssessessssssssassssssssetssssssssssnssunseeseseessesseesnnssees 6
Economic Hardship among SSI Beneficiaries .0........c..ssessesssssesseesssessseesseersscesseeseseesseesseersscssscessessvesssessseesss 7
SSI’s Contribution to Poverty Reduction, Reducing Distress, and Future Mobility «00.0.0... 8
CHARACTERISTICS OF PEOPLE WHO RECEIVE SSI... ccc cccsssesssnsessscsesssensseesssesssssssssensesssensnsesenenes 9
Adults with Limited Education Are Especially Likely to Receive SSI... esesssessessecesesesenseseseseees 9
Unmarried Women Are More Likely to Receive Berefits ...........sessesssesseeceessesssssneesesessecerecesenssenseessees 9
Homeowners Are Less Likely to Receive SSI ou... cssssssssssssssseseessesvsesssseeseanscuseseesseavcessencesscaessuseseensenseseees 9
People in Poor Health Are Most Likely to Receive SSI u.......cesesssscsssessecssecseessesteasscusencenecsnecnsesecnseanscuseaes 10
People of Color Are More Likely than Non-Hispanic White Adults to Receive SSI... 10
PEOPLE RECEIVING SSI BECAUSE OF A DISABILITY HAVE VARIED IMPAIRMENTS ........... 10
STATE-LEVEL DIFFERENCE IN SSI RECEIPT REFLECTS DIFFERENT DISABILITY AND
POVERTY RATES IN THE STATES... cscsssscesescesssesssesesnssesssssesssesesnsessssenssssssensesssensesisnssenssenseaseaes 12
SOME STATES SUPPLEMENT SSI, BUT THOSE SUPPLEMENTS HAVE NOT GENERALLY
KEPT PACE WITH INFLATION occ cscsessesssenenesensssssssessssssessssssssesssssssnessesessensssessnensnssesenseeasssessesssoseees 14
SOME ELIGIBLE PEOPLE MAY NOT PARTICIPATE IN SSI... cc cecsneteeessensesnsensnssessseesnesseaseaes 16
THE PANDEMIC IS AFFECTING SSI PARTICIPATION, BUT WE MAY NOT KNOW ITS LONG-
RUN EFFECTS FOR SEVERAL YEARS ou. cessessssessssessssessssssscsssssssssesssssessssssssssesssesssssessssessssessssessssesessenesses 16
WHAT SSI CHANGES ARE UNDER DISCUSSION? scstecsessnenseseeeneessssssesssesesensesesesensteesnensneseens 16
Changes to Asset Tests: Levels and Compliance Issue .........cccsscsssssesssesssessessesssssssessssssssseesstesssssssansses 17
Changes to Asset Tests: Treatment of Retirement ACCOUNES ..........sessssssssssesssessstesssssssescserseesssosssoeess 17
Changes to Income Exclusions ...........ssscsssssssssssssseessssecsessssssssssssessueessessssssssessseecssessssssssssseseseeesearsuesssessnesess 18
Changes to the Way SSI Benefits Account for Marital Status 0.0... csssssssssssssssssssssssssseesssesseessessesee 18
Changes to In-kind Support and Maintenance (ISM) Rules............cssssssssssssssssssssesssesssssesesssesssessssesees 18
CONCLUSIONS ...... cc cscsssssssssscsssssssssesssvssvessevsssseessscssssssssssssssnssssessssssssssssvsssevsssscesssvsaveuseveasoeeseesenssnasecesssansscseussseseoreseorads 18
DATA APPENDIX... eecscssesssssssssssssssesesssscsssscsnesssssnsvoesessensuesessevensssscesssenscssessessssssssusesesaressssseuesecsussueneeussnevensasees 19
REFERENCES o.oo eetssesssesnsssnseenseensensssesssesssscessnsecssesesssssnsesnsensesnsesenseensneessseseasesieansesnssensesesansnsnsssensnensans 20
ABOUT THE AUTHOR... ccc sscssssssseeesssssesssssssesenessscesessessessssssessssesssesessuassceseseeseeseusuanssasssensensssecenenassennseaeececeas 22

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 iii
FIGURES
Figure 1.
Figure 2.
Figure 3.
Figure 4.
Figure 5.

Figure 6.
Figure 7.
Figure 8.

Figure 9.

Figure 10.
Figure 11.
Figure 12.
Figure 13.
Figure 14.
Figure 15.
Figure 16.

SSI Beneficiaries by Age, May 2021.........sccssssssssssssssssesssecsesssecssvossnessssesnscssueessvosaressnsecssecauesssvonsnecanvessee 1
Number of People Receiving Federal SSI Payments by Age, 1974-2019.......sssssssssssesseesseesseess 4
SSI Prevalence by Age, 1974-2019 (%)....ssssssssssssssssssessssesssessssssssssssssssessesssssssssessessssesseessntssseesssansseesees 4
Real Value of SSI Eligibility and Exclusion Parameters in 2021 Dollars, 1972-2021. ..........100 5
SSI Benefits as a Percentage of the HHS Poverty Guideline, by the Presence of

Other Income and California State Supplement, 2020... .sesesssssessssescesssnsssnsesecscesecssensesscnsesneess 6
Material Hardship by SSI Benefits Receipt, All Ages, 2018 .........cccssesssssssssssesssssssssteeseesseesessees 8
SSI Receipt Rates for Adults Ages 21 and Older by Education, 2015-19. .........::ccsesssssssssssessseenes 9
SSI Receipt Rates for Adults Ages 21 and Older by Marital Status and Housing

TTEMULC, ZOLF—1Q. ..ecssccsscesesseessessesssesecesssssssesseesseasseseceseessesssecseassecseecsessecssscsnsesesesesecesseesseenseanseacecseesseesseansees 10
SSI Receipt Rates for Adults Ages 21 and Older by Health Status, 2018..........ccccssssesssesssessees 11
SSI Receipt Rates for Adults Ages 21 and Older by Race-Ethnicity, 2015-10... 11
Number of SSI Beneficiaries with Various Primary Diagnoses, by Age, 2019........sssesseeee 12
SSI Receipt Rates by State at All Ages, 2019. ...csscsesssesssesssessesseessessessesseessessesssesseesseesessesssesseessaes 13
Poverty Rates by State at All Ages, 2017-19......cssscssssssssssessseesseessessstsssessseasseessessasscatessessseassess 13
SSI Receipt Rates by State at Ages 64 and YOUNQET, 2019. .......sssssssssesseesssseseesseesstesssessssessseesseens 14
SSI Receipt Rates by State at Ages 65 and Older, 2019........sesssessssesseessesssessessessesssessessssssessees 15
Monthly Awards for SSI, January 2001—May 2021 (Average). ....sssssssssssssssessssessesssesssesssessseessees 17

iv SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Introduction

Once termed the forgotten safety net (Select
Committee on Aging 1987), the Supplemental
Security Income (SSI) program provides critical
support to those with low income and few assets,
including children and working-age adults with
severe disabilities as well as adults ages 65 and
older.’ In May 2021, over 7.8 million people who
have limited resources (box 1)—almost 1.1 million
children, nearly 4.5 million adults ages 18 to 64,
and nearly 2.3 million adults ages 65 and older—
received cash benefits from the program (figure 1).
Monthly benefits for all SSI beneficiaries averaged
$585, with higher average benefits for children
($690) and those ages 18-64 ($616) and lower
benefits for those ages 65 and older ($476).

This brief uses data from published sources

and tabulations from nationally representative
household survey data to describe demographic
and economic characteristics of beneficiaries of
SSI, generally prior to the pandemic. I show how
the program and its recipients have changed since
it first paid benefits in 1974, with higher shares of
children and working-age adults receiving aid today
than at the program's outset. SSI beneficiaries are
a diverse group, disproportionately made up of
people who are not married, are of color, have had
less education, report poor health, and live in states
with higher poverty rates.

The program closely targets people with serious
economic need. Nonetheless, many SSI beneficiaries
still face significant financial hardship, including
food insecurity, difficulties affording housing and
utilities, and poor housing quality. Beneficiaries’
circumstances often differ with age and disability
status, with younger and disabled recipients

often even worse off than older beneficiaries. The
program's asset limits—unchanged since 1989—are
currently $2,000 for a single person and $3,000 for
a couple—and the amount of income beneficiaries
can receive without affecting their SSI benefits
(“income exclusions”) has failed to keep pace with
inflation. Social Security Administration (SSA)
office closures due to the COVID-19 pandemic

also appear to be hampering timely access to the
program.

Figure 1
SSI Beneficiaries by Age, May 2021

m Under 18
m 18-64
m 65 or older

Number

  

1,081,000
2,275,000

4,478,000

URBAN INSTITUTE

Source: SSA, Monthly Statistical Snapshot, May 2021.

Note: Refers to federal beneficiaries; some people receive
state supplements to SSI without receiving federal benefits.

The Program of Last Resort

To qualify for SSI cash benefits, a person must be
age 65 or older or unable to engage in substantial
work due to a long-standing health condition

and have low income and few assets (box 1). SSI
applicants must also claim every other possible
benefit for which they might qualify before
applying for SSI. Some people thus refer to SSI
as the “program of last resort” or “assistance of
last resort.” Because its benefits are contingent on
those from all other cash-assistance programs,
SSI interacts in important ways with many other
programs.

In 2021, SSI’s monthly federal benefit guarantee is
as follows:

© $794 for a single person; and
e $1,191 for a couple.’

These monthly amounts are reduced if
beneficiaries have other income above modest

thresholds.

1 People ages 65 and older who meet SSI’s income and asset eligibility standards can qualify for benefits regardless of whether they

have disabilities.

2 __InDecember 2019, most SSI benefits went to individuals rather than couples, Only about 3 percent of SSI beneficiary units were couples.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 1
BOX 1
SSI ELIGIBILITY PROVISIONS AND BENEFIT ADJUSTMENTS

SSI beneficiaries must have low incomes and few liquid assets.
e People seeking SSI benefits must first apply for all other aid for which they may qualify.'

e Nonhousing assets (such as funds in checking and savings accounts, stocks, and bonds) cannot
exceed $2,000 for a single person or $3,000 for a couple—levels that have not changed since
1989. Certain assets, however, are not counted toward the asset limit.

— In determining eligibility for SSI, SSA excludes the value of:

= The home, household goods, and personal effects;

= One vehicle used for family transportation;

« Life insurance with a cash surrender value up to $1,500; and
= A burial plot plus funeral funds of up to $1,500.

— SSI beneficiaries or applicants who transfer resources to others for below-market value could
become ineligible for SSI for a period of up to 36 months.

e SSI benefits are reduced by a third for beneficiaries living in someone else’s home.

— In other circumstances benefit reductions depend on living arrangements, and complex rules
for in-kind support and maintenance affect the share of household costs one pays (ISM; Social
Security Advisory Board 2015).

e SSI benefits cannot exceed $30 per month for people living in institutions.

e People receiving SSI may keep the first $20 of income they receive from any source (referred to
as the general income exclusion), including Social Security, each month without any reduction to
their benefits." After the first $20:

— Monthly benefits are reduced by one dollar for each dollar of income from sources other than
employment.

e People receiving SSI may keep the first $65 of income they earn through paid employment each
month without any reductions to their benefits (referred to as earned income exclusion).

— After that, SSI benefits are reduced by 50 cents for every dollar earned.

— People with earnings but no income from other sources can thus keep $85 of monthly
earnings ($65 plus $20) without any reduction to their SSI benefits.

' $SA provides applicants with a dated, written list of the possible income sources for which they might be eligible and for

which they must apply within 30 days if they are capable. https://www.ssa.gov/OP_Home/cfr20/416/416-0210.htm.
i https://www.ssa.gov/ssi/spotlights/spot-burial-funds.htm. For context, by one estimate, median funeral costs totaled

$7,640 in 2019 when including a viewing and a burial. “Statistics,” National Funeral Directors Association, accessed
December 28, 2020. https://nfda.org/news/statistics#:~:text=The%20national%20median%20cost%20of,the%20median%20
cost%20is%20%249%2C135.

ii §SA does not include certain income sources as unearned income. These include state supplementation of the SSI benefit
and certain infrequent sources of income.

      

2 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
SS/ beneficiaries must be older, blind, or disabled.
e Age-based eligibility starts automatically at age 65 for those meeting the program’s financial criteria.
e SSA defines disability as follows:

“Inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable
physical or mental impairment(s) which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months.”

— In 2021, the monthly SGA amount for SSI beneficiaries is $1,310.
e SSA defines blindness as follows:

“Having vision that can’t be corrected to better than 20/200 in one’s better eye or if one’s visual
field is 20 degrees or less in one’s better eye.”

SS/ beneficiaries must be US citizens or qualified aliens.’

https://www.ssa.gov/pubs/EN-05-10052.pdf

Y Qualified aliens include lawfully admitted permanent residents, refugees, asylees, and parolees as well as certain Cuban
and Haitian immigrants. Some people who were subjected to battery or extreme cruelty may also qualify. See “Under
What Circumstances May Non-Citizens Be Eligible for SSI?” SSA, accessed December 28, 2020. https://www.ssa.gov/
ssi/spotlights/spot-non-citizens.htm#:~:text=WHO%20IS%20A%20QUALIFIED%20ALIEN%3F&text=|In%20addition%2C%20

 

ou%20can%20be,while%20in%20the%20United%20States.

 

SSI Enrollment HasIncreased = ° The decline in SSI receipt for adults who are

at least age 75 was especially rapid. In the

over Time and the SSI program’s early years, more than 11 percent of
Population Has Become older adults who were at least age 75 received
SSI, compared with only 4.5 percent today.
Younger . .
— The rapid decline through the early 1990s
The number of people receiving federal SSI leveled off in the late 1990s and through the
payments has more than doubled since the program 20008.
first paid benefits, increasing from 3.6 million in — This decline was expected because initial

1974 to 7.9 million in 2019 (figure 2). Over that
period, the US population increased by just over
50 percent (from 214 million to 328 million).

Social Security benefits are indexed to wages,
while initial SSI benefits are indexed to prices.
Wages typically grow faster than prices, so

Adjusting for population size by age, since 1974 each year Social Security provides a larger
SSI prevalence—that is, the fraction of people in a share of new beneficiaries with benefits that
particular age range receiving SSI—has increased exceed SSI’s eligibility thresholds.

modestly overall and at younger ages but has © Changes in SSI receipt patterns by age

declined considerably for older adults (figure 3).

reflect changes in policies and population
In 2019, about 2.4 percent of people in the characteristics.
United States received SSI, up from about

‘ — For example, children’s SSI participation
1.6 percent in 1974.

grew in response to the 1990 Sullivan

Older people are much more likely to receive v. Zebley decision, which clarified how
SSI than younger people, but the age gap in disability should be evaluated for children
SSI receipt has narrowed. applying for SSI.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 3
Figure 2
Number of People Receiving Federal SSI Payments by Age, 1974-2019

0-17
m 18-64
m 65 or older

9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000

Numbers (7,000s)

 

URBAN INSTITUTE

Notes: Refers to federal benefit receipt in December.

Figure 3
SSI Prevalence by Age, 1974-2019 (%)

——75 or older =——=65-74 =——=50-64 ——all =———35-49 =——18-34 ——0-17

 

 

 

 

 

 

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g =
OO ea ea an i
% po ~o © ov o& oo 2 O WV & © © O ~* 6 2 8 WY & 6 &
A” A QP OY OO DOP YO 7% PF SP OY OF O_O? NP AY OME NO ON
MM HMMA HAI Q* AAA VO POP PE EO HP S OC O

Year

URBAN INSTITUTE

Source: SSA, Annual Report of the Supplemental Security Income Program, table IV.B7.

Notes: Figure shows the percentage of the Social Security area population receiving federal SSI benefits.

4 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
e SSI payments have not changed much as a power of the resources that beneficiaries are

share of the economy since 1975. allowed to hold has declined markedly—to the

— Although the number of people receiving SSI point where even people with meager resources are
has increased with population growth, SSI ineligible for program benefits.
benefits have been a relatively stable share of Figure 4 plots the values of SSI’s asset tests for
the economy. They have fluctuated between _ both single people and couples and its income

one-quarter and one-third of 1 percent of gross exclusions since 1972, when Congress enacted the

domestic product (GDP) and are projected to program, in 2021 inflation-adjusted dollars.
decline asa share of GDP mm comings decades SSI’s original asset tests—$1,500 for singles
(Social Security Administration 2020, table and $2,250 for couples in 1972—are roughly
IV.D figure IV.D1). m

V-D1 and figure IV.D3) equivalent to almost $9,300 for a single person

and $13,950 for a couple in today’s dollars.
SSI's Eligibility Standards Have .~. when Congress last changed SSI’s asset tests

Eroded over Time in 1989, to $2,000 for a single person and
$3,000 for a couple (where they still stand

One reason SSI prevalence among older adults has today), these amounts were roughly equivalent

declined is that SSI eligibility parameters have not to $4,259 for a single person and $6,389 for a

kept pace with inflation. As a result, the purchasing couple in today’s dollars.

Figure 4

Real Value of SSI Eligibility and Exclusion Parameters in 2021 Dollars, 1972-2021

—— Asset test married —— Asset test single
——Earned income exclusion (annualized) _——General income exclusion (annualized)

16,000
14,000
12,000
10,000
8,000
6,000

4,000

Real value of Parameter (2027$)

/

 

 

 

 

 

* po , O CV om (© OD OD WV oH © © O WV & © BD OD WY MH 0 BD OD

AV A SP DNV MH PP GY OM oP oP PSV HP PO NV A WO WD of

MM MMMM MM HAA AMA AAP PP PH PH PH LH L & &
Year URBAN INSTITUTE

Source: Author's calculations using data from the Annual Statistical Supplement.

Notes: Uses 2020 OASDI trustees report values for CPI-W for 2021. The final CPI-W will differ from this preliminary estimate.
SSI’s life insurance and burial funds provisions have also remained unchanged in recent decades.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 5
e SSI’s income exclusions have not changed since §§J Benefits Are Inadequate
1981. If they had kept up with inflation since
the last congressional change in 1981: SSI BENEFITS RELATIVE TO POVERTY

SSI does not guarantee a poverty-level benefit
to people without other income (figure 5). The
base federal SSI benefit gives people in different
circumstances income equal to a different
percentage of poverty, none of which exceeds the
— The earned income exclusion would equal federal poverty level (FPL).*
about $186 per month, or $2,288 annually
(compared with $65 and $780 under current

— The general income exclusion would equal
about $57 per month, or $686 annually
(compared with $20 and $240 under current
law).

e Single people living in a state that does not
supplement SSI can receive:

law).

— SSI benefits equal to about 74 percent of
the FPL if these individuals have no other
income (the dark blue segment in the first
column of figure 5).

Figure 5

SSI Benefits as a Percentage of the HHS Poverty Guideline, by the Presence of Other Income
and California State Supplement, 2020

mg Plus earnings exactly equal to the earned income exclusion
m Plus income exactly equal to the general income exclusion
m Plus state supplement

m Base federal benefit

120%
100%
80%
60%
40%

20%

  

0%
Single person, Couple, Single person, Couple,
state does state does California California
not supplement not supplement supplement supplement

Type of Unit and State
URBAN INSTITUTE

Source: Author’s calculations from policy parameters.

Notes: The Health and Human Services (HHS) poverty guideline does not vary by beneficiary age. The CA state supplement is
the weighted average for beneficiaries based on 2018 data.

3. The income exclusions shifted from quarterly to monthly that year, with the general income exclusion increasing to $20 per month
and the earned income exclusion increasing to $65 per month.

4 _ These calculations use the HHS poverty guideline rather than the Census Bureau’s poverty threshold. https://aspe.hhs.gov/poverty-
guidelines.

6 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
— Income equal to 76 percent of the FPL if
these individuals have a $20 monthly Social
Security benefit and no other income (the dark
blue segment plus the light blue segment).

— An income equal to 82 percent of the FPL
if these individuals have $20 in Social
Security and $65 in earnings per month
(the dark blue segment plus the light blue
segment plus the maroon segment).

e Married couples living in a state that does not
supplement SSI (the second column in figure 5)
can receive:

— SSI benefits equal to about 82 percent of the
FPL if these couples have no other income
(the dark blue segment).

— Income equal to 83 percent of the FPL if these
couples have a $20 monthly Social Security
benefit and no other income (the dark blue
segment plus the light blue segment).

— Income equal to 88 percent of the FPL if these
couples have $20 in Social Security and $65
in earnings per month (the dark blue segment
plus the light blue segment plus the maroon
segment).

Most states supplement the federal SSI benefit,

as I discuss further below. In those states, SSI
beneficiaries’ incomes can approach the FPL or
even exceed it for some types of beneficiaries in
some states. In California, for example, income
from the federal benefit plus the state’s supplement
for a single person is nearly go percent of the

FPL (third column of figure 5); for a couple, the
combined federal and state benefit exceeds the
FPL by about 10 percent (last column of figure 5).

Empirical analyses of poverty rates among

SSI beneficiaries confirm high rates of need.
Using data from the Current Population Survey
matched to administrative records, Nicholas (2013)
found that about 42 percent of SSI beneficiaries
were poor in 2005. Nicholas found important
differences in poverty rates for people with
different family and household structures and
different living arrangements. Other studies

have documented high poverty rates among

SSI beneficiaries and shown that estimates

are sensitive to how income is measured;
administrative records can help to improve the
accuracy of poverty estimates based on household
survey data alone (Nicholas and Wiseman 2009).

Tabulations from the American Community
Survey (ACS) for 2014 to 2018 confirm high
beneficiary poverty rates, with 38 percent of SSI
beneficiaries reporting income below 100 percent
of the FPL and nearly half (48 percent) reporting
income of less than 125 percent of the FPL. These
estimates are broadly consistent with those of
earlier studies, even if the ACS data allow less
definitive conclusions than do surveys matched to
administrative records. SSI beneficiaries ages 18 to
64 are most likely to be poor, with older adults and
children having somewhat lower poverty rates.

ECONOMIC HARDSHIP AMONG SSI
BENEFICIARIES

Consistent with SSI’s failure to provide a
poverty-level benefit for many beneficiaries, SSI
beneficiaries report more economic hardship
than other people, according to estimates from
data from the Survey of Income and Program
Participation (SIPP; figure 6). (The appendix
provides information about SIPP))

About 40 percent of SSI beneficiaries live
in households that report at least some food
insecurity, compared with 16 percent of the
overall population.>

— Nearly 15 percent of SSI beneficiaries live in
households that report very high levels of
food insecurity, compared with 4 percent of
the overall population.

e SSI beneficiaries are twice as likely as others
to report difficulty making rent or mortgage
payments.

e Nearly one in five SSI beneficiaries lives in
a household that has trouble paying utility
bills and more than one in five reports pest
problems at home or other housing-quality
concerns.°

5 The food hardships that the SIPP asks about include the following: whether the food bought did not last; whether balanced meals
were affordable; whether the family cut size or skipped meals due to affordability, and, if so, the frequency of skipping meals; whether
respondents thought they should skip meals because of lack of money; and whether they went hungry because of lack of money for
food. Food insecurity is defined based on at least three reports of insecurity. Severe food insecurity is defined as reporting at least

five aspects of food insecurity.

6 ‘These include holes in the floor, cracks in the walls or ceiling, and plumbing problems.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 7
Figure 6
Material Hardship by SSI Benefits Receipt, All Ages, 2018

BAII people 65+

BAII people

mu SSI beneficiaries 65+
wAII SSI beneficiaries

Any food hardshi
Y P 40%
Very high food insecurity

Unable to pay rent or mortgage

Unable to pay utilities

Hardship

Stays at home because unsafe
Pest problems at home

Housing quality problems

 

Percent Reporting Hardship

URBAN INSTITUTE

Source: Author's calculations from the 2018 Survey of Income and Program Participation.

Notes: Information about hardship is collected at the household level, but beneficiaries are tabulated at the individual level.
Some SSI beneficiaries live with non-beneficiaries. The SIPP represents the civilian, noninstitutionalized population. See
endnote 9 for a description of the food security elements. Housing quality problems include holes in the floor, cracks in the
walls and ceiling, and plumbing problems.

SSI’S CONTRIBUTION TO POVERTY deep poverty, which the authors defined as
REDUCTION, REDUCING DISTRESS, AND income below 50 percent of the FPL.’
FUTURE MOBILITY

Although many SSI beneficiaries are poor and
experience material hardship, their financial
situation would be more dire without SSI.

e Before receiving benefits, some applicants
for SSI disability benefits are financially
distressed, and distress levels often fall after

benefit award.

¢ Most SSI benefits go toward reducing poverty. — Deshpande, Gross, and Su (2021) found that

— Meyer and Wu (2018) found that roughly some markers of financial distress, such
80 percent of SSI benefits go to people who as bankruptcy, foreclosure, eviction, and
were poor before they received benefits, home sales, peak around the time of benefit
and about 70 percent go toward alleviating application and decline afterward.°

7 _ These estimates are sensitive to the data sets used and choice of measurement; however, the differences between estimates based
on survey data alone and surveys matched to administrative records were modesi—less than one percentage point for each of these
point estimates.

8 This research examines both Disability Insurance and SSI applicants.

8 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Characteristics of People Who
Receive SSI

Many people who receive SSI were either
disadvantaged or at higher risk of poverty
throughout their lives by virtue of characteristics
such as education, marital status, and health status.

ADULTS WITH LIMITED EDUCATION ARE
ESPECIALLY LIKELY TO RECEIVE SSI

Estimates from ACS data from 2014 to 2018 reveal
that SSI receipt is especially common among
people with limited education (figure 7). (The
appendix provides information about ACS.)

e Adults who did not attain a high school
diploma are far more likely to receive SSI than
people with more education.

— About 9 percent of adults ages 21 and older
who do not have a high school diploma
receive SSI, compared with about 4 percent
of adults with a high school diploma and
less than 1 percent of adults with a bachelor’s
degree or more education.

— The share of adults with advanced education
receiving SSI is higher among those 65 and
older than for younger adults.

Figure 7

UNMARRIED WOMEN ARE MORE LIKELY TO
RECEIVE BENEFITS

Married people are much less likely to report

SSI benefits than unmarried people (figure 8). I
estimate that among all adults ages 21 and older,
less than 2 percent of married people receive SSI.
At ages younger than 65, closer to 1 percent of
married people receive SSI, and at ages 65 and
older about 3 percent receive SSI.

Among unmarried adults younger than age 65,
about 5 percent of men and 6 percent of women
receive SSI. At ages 65 and older, the receipt rates
climb to about 6 percent for unmarried men and
7 percent for unmarried women.

HOMEOWNERS ARE LESS LIKELY TO RECEIVE
SSI

When determining eligibility for SSI, SSA allows
people to exclude the value of a home, household
goods, and personal effects. Nonetheless, people
who rent or occupy a housing unit without paying
rent are much more likely to claim SSI than
homeowners (figure 8). The difference is about two
to one at younger ages and three to one at older
ages.

SSI Receipt Rates for Adults Ages 21 and Older by Education, 2015-19

Adults 65 or older
m Adults 21-64
BAII adults 21 or older

All

More than bachelor’s degree
Bachelor’s degree

Associate’s degree

Education

Some college, no degree
High school diploma
GED or alternate credential

Less than a high school diploma

Source: Author's calculations from ACS data, 2015-19 files.

 

11.1%

°8.9%

SSI Prevalence
URBAN INSTITUTE

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 9
Figure 8

SSI Receipt Rates for Adults Ages 21 and Older by Marital Status and Housing Tenure, 2015-19

HAIl adults 21 or older
© Adults 21-64
@ Adults 65 or older

Share (%)

Unmarried
men

Married
women

Marital Status and Sex

Married
men

Unmarried
women

10.8%

 

Homeowners Renter Not owned,

pays no rent
Housing Tenure

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Source: Author's calculations from American Community Survey data, 2015-2019 files.

PEOPLE IN POOR HEALTH ARE MOST LIKELY
TO RECEIVE SSI

In every age range, people in poor health are far
more likely to receive SSI than those in better
health (figure 9). Nearly 15 percent of adults
reporting poor health receive SSI, compared with

less than 1 percent of those reporting excellent
health.

PEOPLE OF COLOR ARE MORE LIKELY THAN
NON-HISPANIC WHITE ADULTS TO RECEIVE
SS|

Given centuries of racial discrimination in the US,
significant and persistent disability and income
gaps across racial groups exist. As a result, people
of color are more likely to be eligible for SSI

benefits and receive benefits than non-Hispanic
Whites.

Among adults ages 65 and older (figure 10),
people of color are more than twice as likely as
non-Hispanic Whites to receive SSI. At ages 21
through 64, non-Hispanic Black people are about
twice as likely to receive SSI as non-Hispanic
White people.

People Receiving SSI Because
of a Disability Have Varied
Impairments

SSI beneficiaries younger than age 65 qualify
for disability support because of a wide range
of impairments. These include intellectual
disabilities or other childhood disorders,

mood disorders and other mental health
difficulties (including schizophrenic disorders),
musculoskeletal impairments, and a host of
other diseases and impairments—from cancer
to heart disease to respiratory disorders. For
beneficiaries in different age ranges, different
types of impairment are more prominently
associated with SSI receipt. Figure 11 compares
SSI recipients’ primary diagnoses in three age
ranges (children, adults ages 18 through 49, and
adults ages 50 to 64), combining diagnoses into
four broad categories: intellectual disability and
developmental and autistic disorders; mental
health disorders; musculoskeletal system
disorders; and all others.

10 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Figure 9
SSI Receipt Rates for Adults Ages 21 and Older by Health Status, 2018

BAII adults 21 or older
m= Adults 21-64
mw Adults 65 or older 16.3%

Percent

  
    

2.6% 2.4%
1.4%

  
   

0.7% 0.7% 12% 0.9% 0.8%

   

Excellent Very good Good Fair Poor
Health Status

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Source:Author’s calculations from the 2018 Survey of Income and Program Participation.

Figure 10
SSI Receipt Rates for Adults Ages 21 and Older by Race-Ethnicity, 2015-19

mg Non-Hispanic white

m= Non-Hispanic black

m Non-Hispanic Asian or Pacific Islander
m Non-Hispanic Native American

gw Hispanic

11.1%

  
 

5.9% 6.0% 5.6% 5-8%

Estimated SSI Prevalence

All adults 21 or older Adults 21-64 Adults 65 or older
Age Group

URBAN INSTITUTE

Source: Author's calculations from American Community Survey data, 2015-2019 files..

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 11
Figure 11

Number of SSI Beneficiaries with Various Primary Diagnoses, by Age, 2019

® Other, unknown
= Musculosketal system
™ Mood and other mental disorders

§ Intellectual disability, developmental disorders, autistic disorder, childhood disorders

3,000,000
2,500,000
2,000,000

1,500,000

Number

1,000,000

500,000

 

0

<18

Source: SSA, SSI Annual Statistical Report, table 34.

* Most children who receive SSI have diagnoses

of intellectual disabilities, developmental or

autistic disorders, or other childhood disorders.

e For adults ages 18 to 49, the number of
beneficiaries with mood disorders and other
mental health impairments approaches
the number with intellectual disabilities,
developmental or autistic disorders, or other

childhood disorders.

e At ages 50 to 64, musculoskeletal impairments
and other impairments grow in prevalence as

diagnoses.

State-Level Difference in SSI
Receipt Reflects Different

Disability and Poverty Rates in

the States

SSI receipt rates vary across US states and the
District of Columbia (figure 12), from a high of
3.95 percent of the population in West Virginia

 

18-49
Age

50-64

URBAN INSTITUTE

to a low of just below 1 percent of people in Utah.
The national average was 2.46 percent in 2019.

Geographic patterns in SSI receipt mirror
geographic patterns in poverty (figure 13).

— The states with highest SSI receipt at all
ages—West Virginia, Mississippi, Kentucky,
and Louisiana—are among the states with
the highest shares of people in poverty.

— The state with the lowest poverty rate—
New Hampshire—has one of the lowest SSI
receipt rates.

— In detailed multivariate analyses, Gettens,
Lei, and Henry (2018) concluded that
geographic variation in SSI participation
generally reflects cross-state differences in
economic conditions and disability rates
rather than in program administration.

The correspondence between poverty and SSI
participation is not exact, however, especially
when I examine beneficiary subgroups. This may
partially reflect state policy choices.

12 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Figure 12
SSI Receipt Rates by State at All Ages, 2019

   

 

All ages
3.95
0.99
Powered by Bing
© GeoNames, Microsoft, TomTom
Source: Author's calculations from SSA data.
Figure 13
Poverty Rates by State at All Ages, 2017-19
All ages

% 19.1
5.6

Powered by Bing
© GeoNames, Microsoft, TomTom

Source: US Census.

Notes: Uses a three-year average to improve reliability for smaller geographies.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 13
e For example, receipt rates and overall poverty
rates sometimes deviate significantly when
I examine SSI receipt rates by broad age
group—older or younger than 65. The SSI
receipt rates at ages 64 and younger closely
track overall poverty rates (figure 14), but
rates at ages 65 and older reveal high SSI
prevalence in California and New York state
(figure 15), even though these two are not
among the states with the highest poverty
rates.

— California is an outlier in this older age
range, with 10 percent of older adults
receiving SSI.

— California provides supplemental payments
to many SSI beneficiaries, including more
than 350,000 older adults. This may partially
account for higher SSI receipt rates for older
adults.

Figure 14

Some States Supplement SSI,
but Those Supplements Have
Not Generally Kept Pace with
Inflation

Like California, most states supplement the federal
SSI benefit for at least one group of beneficiaries.’
States determine how much to supplement

the federal SSI benefit, with more generous
supplements coming from Alaska, California,
Colorado, Connecticut, Massachusetts, Minnesota,
and Wisconsin. Some states offer larger
supplements for those people in shared living
arrangements, especially community settings

like group homes or adult foster care, while other
states offer smaller supplements to people sharing
housing. California adjusts its supplement if a
person's housing arrangement has a kitchen.

State supplements date back to 1972, when
Congress established the SSI program. At that

SSI Receipt Rates by State at Ages 64 and Younger, 2019

 

Source: Author's calculations from SSA data.

9  httos://www.ssa.gov/ssi/text-benefits-ussi.htm

Ages 0-64
4.08

0.91

Powered by Bing
© GeoNames, Microsoft, TomTom

14 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Figure 15

SSI Receipt Rates by State at Ages 65 and Older, 2019

 

Source: Author's calculations from SSA data.

time, federal law required states to maintain the
incomes of residents who were receiving benefits
from the federal-state programs for older persons,
the blind, and the disabled that preceded—and
were subsumed by—SSI. One rationale for
federalizing SSI was to guarantee a minimum
benefit level across states, a point President

Nixon emphasized when signing the founding
legislation.

States can either administer their own state
supplements or authorize the federal government
to administer them.”° In December 2019, more
than 1.4 million people in 13 states were receiving
federally administered state supplements.” More
than 1.2 million of those receiving federally
administered state supplements were California
residents.

In a few states, SSI supplements can push SSI
beneficiaries’ income over the poverty guidelines,

 

Ages 65 and older
9.99

0.92

Powered by Bing
© GeoNames, Microsoft, TomTom

America has always cared for its aged
poor, the blind, and the disabled—

and this bill will move that concern

to higher ground by providing better

Tae MILO) =10 (11 C1) eM ee ee

—Richard M. Nixon, 1972

although most supplements are not enough to do
so. Most state supplements to SSI have not kept
up with inflation (Committee on Ways and Means
2002, author’s calculations). As a result, each year
their purchasing power declines, and the relative
difference declines between states that provide
SSI supplements and those that do not.

10 The cost for having the federal government administer each payment to a beneficiary is $12.49 in 2021. httos://www.ssa.gov/oact/

cola/statesuppfee.html.

11. The federal government administers supplements for the following states/jurisdictions: California, Delaware, the District of Columbia,
Hawaii, lowa, Michigan, Montana, Nevada, New Jersey, Pennsylvania, and Rhode Island.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 15
Some Eligible People May Not
Participate in SSI

SSI’s ability to reduce need among older adults
and people with disabilities depends on whether
eligible people know the program exists and
choose to apply for it. Throughout SSI’s history,
researchers have attempted to determine whether
most people eligible for the program participate
or whether there are more people who could

be helped (Coe 1985; Davies 2002; Elder and
Powers 2004; McGarry 1996, 2000; McGarry and
Schoeni 2015; Menefee, Edwards, and Schieber
1981; Strand 2010; Urban Systems Research

and Engineering, Inc. 1981; Warlick 1982).

Given the challenges of measuring disability
severity and whether it meets SSI criteria among
nonparticipants, most of these studies have
focused on people ages 65 and older.

e One of the more recent estimates suggests that
only 58 percent of older adults eligible for SSI
participate (McGarry and Schoeni 2015).

e Studies have identified a few possible
explanations for nonparticipation, including
lack of knowledge, perceived stigma for
participating in a means-tested program, and
transaction costs—for example, the amount
of time and effort it takes to gather all of the
required paperwork to apply for benefits.

— Most studies find that people with greater
economic need are more likely to participate
than those with less need.

Advocacy organizations (for example, Social
Security Works 2020) have made several
recommendations about how to narrow this
participation gap, such as periodically sending
letters to people with low Social Security
benefits who may qualify for SSI if they have
low assets and low incomes from other sources
and conducting specialized outreach to homeless
people.

The Pandemic Is Affecting SSI
Participation, but We May Not
Know Its Long-Run Effects for
Several Years

Recent events reveal how SSI applications and
awards can depend on external circumstances.
The global pandemic has upended many facets of
life in the United States. Early data suggest that
applications and awards to the SSI program have
fallen as SSA field offices have closed (Weaver
2020a, 2020b). The eight lowest months for SSI
awards in the past 20 years occurred from the
second half of 2020 through May 2021 (figure 16).
During the great recession (dated from December
2007 to June 2009, according to the National
Bureau of Economic Research”), awards for SSI
grew, underscoring how SSI is available to help
those who need it most in difficult economic
times.*

What SSI Changes Are under
Discussion?

Policy makers and advocates have proposed many
changes to SSI in recent decades. Some proposed
adjustments focus on streamlining administrative
practices in order to reduce program complexity
and increase access. Other proposals address the
adequacy and availability of benefits. Still others
target encouraging younger beneficiaries to return
to work. Here I identify a few recent prominent
proposals.

SSI is financed by general revenues; this differs
from Social Security, which is primarily funded
through a payroll tax, pays benefits from its

trust funds, and can only pay benefits that the
trust funds support. Because trust fund finances
are evaluated over a 75-year projection horizon,
proposals to change Social Security are often
evaluated using this scope. Changes to SSI benefits,
in contrast, are more typically evaluated over a
shorter time horizon: the 10-year budget window.

12 “US Business Cycle Expansions and Contractions,” National Bureau of Economic Research, accessed February 15, 2021.

 

13 Research suggests that the relationship between economic conditions and SSI participation is complicated and dynamic (Nichols,

Schmidt, and Sevak 2017; Rutledge and Wu 2014).

16 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Figure 16

Monthly Awards for SSI, January 2001-May 2021 (Average)

100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000

0

Federal Awards
(3-month average, centered)

Feb-01
Dec-01
Oct-02
Aug-03
Jun-04
Apr-05
Feb-06
Dec-06
Oct-07
Aug-08

Source: SSA, SSI monthly statistics.

Jun-09
Apr-10

 

Feb-1 1
Dec-11
Oct-12
Aug-13
Jun-14
Apr-15
Feb-16
Dec-16
Oct-17
Aug-18
Jun-19
Apr-20
Feb-2 1

Month and Year

URBAN INSTITUTE

Notes: Awards are federally administered. Values for April and May 2021 are preliminary. To smooth the data, I display the
three-month average of awards centered on each month (e.g., for February, I average January, February, and March awards,

and for March I average February, March, and April awards).

CHANGES TO ASSET TESTS: LEVELS AND
COMPLIANCE ISSUES

Given the erosion in the value of SSI’s asset tests,
many advocates and policy makers have proposed
increasing SSI’s asset tests. Many proposals would
set maximum asset levels to roughly equal in
inflation-adjusted dollars to the limits set early

in the program's history—for example $10,000

for a single person and $15,000 for a couple.

Some proposals would index these limits for
inflation thereafter, rather than relying on ad

hoc adjustments, which Congress last passed in
1989. In addition to increasing program eligibility,
these proposals would promote, or at least not
discourage, savings.

Advocates have also noted that SSA's use of private
databases to verify compliance with SSI resource
limits could lead to some beneficiaries unjustly
losing eligibility because their records are matched
to the records of different people with the same or
similar names (Mancini, Lang, and Wu 2021). They
recommend using these data only when stricter
matching criteria and investigatory processes have
been established to guarantee due process.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974

CHANGES TO ASSET TESTS: TREATMENT OF
RETIREMENT ACCOUNTS

Other proposals address changes in the retirement
income landscape. When SSI was created, many
employers who offered their employees retirement
plans provided defined benefit pensions that
generated monthly income streams for retirees.
These pensions are less common today. Instead,
many employers offer defined contribution
retirement accounts, and many older adults hold
retirement assets. For people with limited incomes
and retirement accounts from their employers,
retirement plan assets could disqualify them

for SSI benefits even if an equivalent income
from a defined benefit pension of comparable
value would not; however, workers covered by
workplace retirement plans generally earn higher
wages than those without coverage (US Bureau

of Labor Statistics 2020). For workers in the
bottom fifth of the wage distribution, 45 percent
have access to a workplace retirement plan and

26 percent participate, compared with 90 percent
who have access and 81 percent who participate in
the top wage quintile.

17
Some policy experts have suggested treating
retirement accounts similarly to defined benefit
pensions (Greenstein and Neuberger 2008).

For example, SSA could exclude balances up
through a modified threshold and use their
annuitized value rather than the lump sum
when determining SSI eligibility for values
over the threshold. Part of the rationale for this
would be to incentivize savings—or at least not
disincentivize them—among those individuals
with access to an employer savings plan.
Greenstein and Neuberger (2008) also proposed
using a different exclusion rate for retirement
accounts, reducing SSI by $2 for every $3 in
annuitized value, for example.

CHANGES TO INCOME EXCLUSIONS

Many other analysts have also proposed
increasing SSI’s income exclusions—for example,
to about $100 per month for any income source or
$400 per month for earnings. The new thresholds
could then be indexed for future inflation rather
than left to erode again. Davies, Rupp, and Strand
(2004) found that increasing the general income
exclusion is one of the most cost-effective ways to
reduce poverty among older adults.

CHANGES TO THE WAY SSI BENEFITS
ACCOUNT FOR MARITAL STATUS

Balkus and Wilschke (2003) pointed out that two
SSI beneficiaries who live together without being
married but who do not present themselves to the
community as married can be much better off
than identical beneficiaries who marry.

The authors considered a few different options:
treating two married people as single for purposes
of computing benefits; giving each spouse the
earned and general income exclusions; and
changing the treatment of an ineligible spouse’s
income in couples where only one spouse is
eligible for benefits.

CHANGES TO IN-KIND SUPPORT AND
MAINTENANCE (ISM) RULES

SSA's ISM rules are complex, with regulations
totaling more than 250 pages for living
arrangements alone (SSAB 2015). This complexity
has led to many calls for simplification (Parent

and Balkus 2008; Social Security Administration
2000; Social Security Advisory Board 2015). Two
key aspects of ISM rules are whether applicants
are living in their “own” home, someone else’s
home, or an institution, and whether they pay

a pro rata share of food and shelter costs. SSA
reduces SSI benefits by one-third for applicants
living in another's home without paying a
prorated share of costs. About 9 percent of SSI
beneficiaries receive ISM reductions (SSAB 2015).
Address changes trigger a reassessment of ISM.

SSA research has described the detailed reasons
people receive ISM reductions and presented cost
projections and distributional consequences of
various ISM reform options (Balkus et al. 2008;
Nicholas 2014). For example, one simplification
approach would be to use a single reduction

for those living with other adults, without the
complex adjustments based on the allocation of
household expenses.

Conclusions

SSI is a critical component of the US safety net.

It reaches people across the age spectrum. Most
of its benefits go to people who otherwise would
be poor, and large shares of benefits alleviate
deep poverty. Still, many SSI beneficiaries remain
economically vulnerable despite participating in
the program, with substantial shares reporting
food insecurity; trouble meeting rent, mortgage,
and utility payments; and poor housing quality.

The program has evolved since 1974, with
participation rates increasing for the part of the
program serving people with disabilities and
declining for the part of the program serving
older adults. Recent field office closures due to
the COVID-19 pandemic markedly reduced SSI
application rates in 2020 and early 2021. SSI's
asset tests and income exclusions have not evolved
with the program. Changes to these policies could
reduce poverty among older adults and people
with disabilities; however, changes to SSI and
Social Security must be made with care, as the
programs interact in important ways that can
affect the benefits a person receives.

18 SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974
Data Appendix

Where published data from administrative records are not available, I use data from two household
surveys to describe SSI beneficiaries’ characteristics: the American Community Survey (ACS) and the
Survey of Income and Program Participation (SIPP). With both sources, I examine periods before the
COVID-19 pandemic and associated recession, so my estimates do not account for the economic effects of
the global health crisis.

Household survey respondents sometimes misreport receipt of SSI and other income sources. To improve
accuracy, analysts often pair household survey data with administrative records; however, access to such
matched data is strictly controlled to protect respondent privacy and confidentiality, and I was unable to
obtain timely access to matched data for this project. I often include estimates using matched data from the
published literature in my discussion of survey estimates.

AMERICAN COMMUNITY SURVEY

The ACS is a nationwide annual survey that provides information on housing, demographics, and the
social and economic conditions of the US population. It conducts about 2.1 million interviews each year.
ACS uses a “current residence” rule that includes people currently living at an address if their residence is
expected to last at least two months. The ACS sample universe includes people in both institutional and
noninstitutional group quarters. For additional information about the ACS, see US Census Bureau (2020).

I use data from the 2015 through 2019 release of the survey. Because these data were collected nearly
continuously over a 60-month period, they do not represent a single day in time. I used the pooled five-
year files instead of single-year files, even though they are less current, because five-year files are more
reliable, especially when analyzing small populations.

When tabulating ACS data, I use the ACS person weight (PWGTP) to correctly weight the data to the
US population. For ease of presentation, I do not report confidence intervals using the replicate weights.

SURVEY OF INCOME AND PROGRAM PARTICIPATION

The SIPP samples the civilian noninstitutionalized population and thus excludes the roughly

1.5 percent of SSI beneficiaries who reside in institutions.'* The survey oversamples people in low-
income households, making it a good source for studying SSI. (Households in or near poverty were
selected at a rate roughly 29 percent higher than their prevalence in the population.) For additional
information about SIPP, see US Census Bureau (2020). I use data from the 2018 panel of the survey,
which obtained 67,994 person interviews at a response rate of 70.2 percent.

Our estimates focus on results from the first income reporting month. Estimates on hardship measures
use responses for the household.

14 Table 7.E5 in the Annual Statistical Supplement to the Social Security Bulletin provides estimates of federal SS! beneficiaries’ living
arrangements.

SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 19
References

Balkus, Richard, and Susan Wilschke. 2003. “Treatment of Married Couples in the SSI Program.” Issue
Paper 2003-1. Social Security Office of Policy. Baltimore, MD.

Balkus, Richard, James Sears, Susan Wilschke, and Bernard Wixon. 2008. “Simplifying the
Supplemental Security Income Program: Options for Eliminating the Counting of In-kind Support
and Maintenance.” Social Security Bulletin 68 (4): 15-39.

Coe, Richard D. 1985. “Nonparticipation in the SSI Program by the Eligible Elderly.” Southern Economic
Journal 51 (3): 891-97.
Committee on Ways and Means, US House of Representatives. 2002. Green Book: Background Material

and Data on the Programs within the Jurisdiction of the Committee on Ways and Means. Section 3:
Supplemental Security Income. Washington, DC: US Government Printing Office.

Davies, Paul S. 2002. “SSI Eligibility and Participation among the Oldest Old: Evidence from the
AHEAD.” Social Security Bulletin — Perspectives 64 (3): 38-63.

Davies, Paul S., Kalman Rupp, and Alexander Strand. 2004. “The Potential of the SSI Program to
Reduce Poverty among the Elderly.” Journal of Aging and Social Policy 16 (1): 21-42.

Deshpande, Manasi, Tal Gross, and Yalun Su. 2021. “Disability and Distress: The Effect of Disability
Programs on Financial Outcomes.” American Economic Journal: Applied Economics 13 (2): 151-78.

Elder, Todd E., and Elizabeth T. Powers. 2004. “SSI for the Aged and the Problem of ‘Take-Up.”
Working Paper 2004-076. Ann Arbor: Michigan Retirement Research Center, University of
Michigan.

Gettens, John, Pei-Pei Lei, and Alexis D. Henry. 2018. “Accounting for Geographic Variation in Social
Security Disability Program Participation.” Social Security Bulletin 78 (2): 29-47.

Greenstein, Robert, and Zoé Neuberger. 2008. “Removing Barriers to Retirement Saving in Medicaid
and Supplemental Security Income.” Retirement Security Project. Washington, DC: The Brookings
Institution.

Mancini, Sarah, Kate Lang, and Chi Chi Wu. 2021. Mismatched and Mistaken: How the Use of an
Inaccurate Private Database Results in SSI Recipients Unjustly Losing Benefits. National Consumer
Law Center and Justice in Aging. Washington, DC.

McGarry, Kathleen. 1996. “Factors Determining Participation of the Elderly in Supplemental Security
Income.” Journal of Human Resources 31 (2): 331-58.

ee . 2000. “Guaranteed Income: SSI and the Well-Being of the Elderly Poor.” Working Paper 7574.
Cambridge, MA: National Bureau of Economic Research.

McGarry, Kathleen, and Robert F. Schoeni. 2015. “Understanding Participation in SSI.” Working Paper
2015-319. Ann Arbor: Michigan Retirement Research Center, University of Michigan.

Menefee, John A., Bea Edwards, and Sylvester J. Schieber. 1981. “Analysis of Nonparticipation in the
SSI Program.” Social Security Bulletin 44 (6): 3-21.

Meyer, Bruce D., and Derek Wu. 2018. “The Poverty Reduction of Social Security and Means-Tested
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SUPPLEMENTAL SECURITY INCOME: CONTINUITY AND CHANGE SINCE 1974 21
About the Author

Melissa M. Favreault is a senior fellow in the Income and Benefits Policy Center at the Urban Institute,
where her work focuses on the economic well-being and health status of older Americans and individuals
with disabilities. She studies social insurance and social assistance programs and has written extensively
about Medicaid, Medicare, Social Security, and Supplemental Security Income. She evaluates how

well these programs serve Americans today and how various policy changes and ongoing economic

and demographic trends could alter outcomes for future generations. Much of her research relies on
distributional models that she develops to highlight how educational and economic advantages shape
financial outcomes, disability trajectories, health care needs, and longevity. She has a special interest

in the economic risks that people face over their lives. Favreault earned her BA in political science and
Russian from Amherst College and her MA and PhD in sociology from Cornell University.

 

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