As a welcome change, Kotlikoff is now writing about two problems from the real world. First, he's shocked to discover that Supplemental Security Income's (SSI's) resource limits are draconian. Second, he's shocked to discover that a claimant on Social Security disability benefits who tries to park his income below the agency's Substantial Gainful Activity (SGA) limits can easily end up with a large overpayment. I wish I was shocked by either of these situations but they are an everyday part of my work life. SSI recipients should never accumulate even modest sums of money because the rules are insanely out of date. Social Security disability recipients shouldn't try to park their income below SGA because they almost always screw it up and the consequences of a screw up can be severe.
What gets me about Kotlikoff's column is that he's appealing to Social Security Commissioner Andrew Saul to do something about these problems but Saul can't. I suppose he could recommend that Congress update the SSI income and resource limits but he can't change them unilaterally and Mitch McConnell won't be doing any favors for SSI recipients. Saul could try to increase the SGA limits but that takes changes in regulations which would require the approval of the Office of Management and Budget which is currently headed by a Director who isn't exactly sympathetic to disabled people. An increase in the SGA limits wouldn't solve the parking problem anyway. As a practical matter, there's nothing Saul can do. Kotlikoff ought to know that.
16 comments:
When you start messing with SSI resource limits you will get HUGE push back. The moment the amount of resources for being eligible for a benefit for someone that has not worked enough to be insured for DIB passes what most people have in savings while working, people will go crazy. From the average persons perspective it does make some sense to be outraged that people with more money in the bank than they have living paycheck to paycheck working. It just sounds "wrong" to a lot of working people. If you are not working how do you get $5000 in savings, or more when I have nickels and dimes left after bills while working.
The same happens with SGA, even here on the blog we hear that these individuals are so disabled they cannot work and even those denied cannot work and just get poorer, but you want to raise the amount they can work AND get benefits at the same time. To Mrs. and Mr. Sixpack that doesnt sound right or fair. It sounds like gaming the system.
It is a tough fight to make the public understand the programs and an even tougher fight in this day in age.
Yes, I read the column.
Yes, these problems happen every day, to tens of thousands of SSI and Title II recipients.
"Cliff" rules are just TERRIBLE.
As in SGA test and resource test.
Yes, the $2,000 asset test for SSI is an absolute disgrace.
All of that is true.
The column however is simplistic and fails to account for various nuances. The SSI person should contact her local Legal Aid office. If she can properly dispose of the excess resource (as in spend it), she should be able to keep her SSI and with zealous representation obtain a reasonable repayment agreement.
As for the individual over SGA, he also needs a good rep who understands return to work issues and has the tenacity to help him obtain a reasonable repayment agreement or pursue a WAIVER.
Of course, none of these nuances are in the column.
@10:25
You have good points. However, please consider this. I work at a Legal Aid Office that is fortunate to be one of the better funded ones in the nation. Despite that, due to funding and staff restrictions, we are still only able to help 1 or 2 out of every 5 people who ask for help, and who meet our strict financial criteria and who have meritorious claims or need detailed advice. The staff is dedicated and passionate about helping people, but there are just too many people who need help. It's even worse in many other states where Legal Aid is comparatively underfunded.
My impression is that Saul cares about improving customer service. I'm not sure it has registered with him yet, that the most harmful customer service failure SSA can make is to unfairly or improperly deny a disabled person's claim. There are serious issues that Social Security could address to reduce such failures that advocates have tried to raise with him, but I currently don't see much focus on that yet as a priority.
What drives me crazy is how, who, or when SSA came up with these arbitrary numbers?
For example,
1. Why is it $2,000 for a single person and $3,000 for a married couple?
2. Also, where did this 2.5 year Medicare waiting period originate?
3. Who or why did they come up with a 5-month waiting period for SSD benefits and no waiting period for SSI?
Little things the SSA does, for some reason, drives me crazy.
However, I cannot believe I am going to defend the SSI asset rules but here goes.
Typically I ask my clients if they are on food stamps. If so, then they probably qualify for SSI. Then, I probe whether they are married hoping they are not.
I was baffled how this columnist was shocked at this and his phrase "because she didn't know or understand SSI's draconian asset test."
I actually Googled draconian to understand if he was using this right. It usually means "really harsh and repressive." Not really sure this applies.
Out here in California, SSI recipients can get up to around $900-1000 per month. Not horrible considering presumably they did not pay enough into SSD. Also most SSD recipients if lucky get about $1000-2000 per month.
The word I would use for the SSI asset test is outdated just like the archaic DOT. It needs to be updated to maybe $5000 or $10,000. Also, SGA was upped to $1220 per month in 2019. This actually seems about right so nobody is making more $14,640 per year before taxes.
But why did they settle on $1220 in 2019? These little numbers from the SSA are just puzzling.
@6:24
Well, feel better. No one at SSA came up with those arbitrary numbers...people in Congress did.
SGA is wage indexed - https://www.ssa.gov/oact/cola/wageindexed.html
Resource limits et al - look to the CFR based on the SSA Act
https://www.ssa.gov/OP_Home/ssact/title16b/1600.htm for SSI
Ditto for waiting periods etc.
re: Anon 7:06am
Try the following:
https://secure.ssa.gov/apps10/reference.nsf/links/09172019105849AM
The general index for public POMS changes is at the following link:
https://secure.ssa.gov/apps10/reference.nsf/instructiontypecode!openview&restricttocategory=POMT
The $2,000 limit dates back to when SSI started, January 1, 1974. It's 45 years later and the number has not changed.
10:11 - wow! I knew it has been $2000 since at least 1990 when I started practicing. $2000 in 1974 is equivalent in buying power to $10,408.03 in 2019. They should at least tie it to same index they use for the COLA for SSA...
As regards the $2000 resource limitation. When I was doing SSI as a CR in 1975, $2000 was actually a decent amount of money. I was making $14,000 annually then and didn't have 1/2 that in a bank account. Never met an individual who did. Now that I am my son's rep payee, I actually have to pay attention to his direct deposit to ensure that his rent and other expenses are timely paid or deducted so that a new check doesn't cause the balance to touch the $2k limit. Realize it can break and go below in the same month but would prefer it never ever break that limit to avoid trouble.
Hold on a minute. You want to give a Needs Based Benefit to people that are not working, and have not worked enough to have 40 quarters of coverage but still have $10000 in savings.$10000!!!!! TEN THOUSAND DOLLARS!!!!!
WTF!!!!!!
Do you know how many WORKING Americans do not have $10000 in the bank or half of that.
The resource limits were originally $1,500 for an individual and $2,500 for couples in 1974. In 1987, the limits were raised to $1,800 and $2,700, in 1988, to $1,900 and $2,850, and, in 1989, to $2,000 and $3,000.
$2000 isn't a great amount of money but then again this is welfare.
@9:37
Your comment has got me thinking. It's a good argument for both a $10K SSI resource limit, and a minimum wage high enough for those poor hard working Americans you mention to be able to modestly save. Then the workers can save enough for a reasonable emergency fund too, and there will be no need for them to jealously covet their disabled and elderly fellow citizens for also having enough money to live on. Good point!
8:57, your attempt at humor falls flat as does your your premise. You do understand that only 4% of Americans (1.3 million people) over the age of 16 work for minimum wage right? meaning more people are on SSI than minimum wage.
People on SSI generally do not save. So outrage about the limit is silly.
Spoken as a former SSI CR.
@11:37 So why raise it if they can't save anyway?
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