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Sep 22, 2021

SSI Is 5% Of SSA Payments But Takes 35% Of SSA's Budget To Administer

 
Senator Sherrod Brown

    From Ted Knutson writing for Forbes:

Social Security’s Supplemental Security Income program (SSI) is forcing millions to live in poverty, Senator Sherrod Brown (D-OH) charged today.

Convening the first Senate hearing on SSI in the Senate Finance Committee since 1998, Brown asserted millions of disabled and older Americans are living well below the poverty line as the program’s eligibility rules haven’t been updated in decades:

“They’re punished if they try to save for an emergency.”

“They’re punished if they try to find a part-time job.”

“They’re punished if they accept food or shelter from generous family and community members.”

“They’re even punished if they’re married.”...

As evidence of the difficulty the Social Security Administration has managing the program, [a witness from the Government Accountability Office] said SSI benefits make up only 5 percent of SSA payments, but it requires 35 percent of the agency’s budget to administer. ...


15 comments:

  1. I do not agree with the word "punished" when referring to a benefit reduction on a welfare program. Your welfare is reduced for working and making money, because it is the money you needed. Your welfare is reduced if you get free housing and food, because that is what the welfare program is paying for. If you have enough to save, then you dont need welfare.

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  2. Form follows function. If the administrative costs are disproportionate to the benefit, then something is wrong. Too many decision points. Streamline. Let people live in the streets or with family and don't reduce by a 1/3 because we think they are getting "too" much. Get rid of IKI. We talk of freedom why not let people marry or not and not deem adult income to adults.
    I always have this image of crustaceans in a bucket and just as soon one looks like it'll make it the others pull it back. We who have little try to keep those that have
    less at an even meager capability. We don't even let them adopt capitalistic values of saving and investing.
    Disability administration should be for administering disability not for keeping income inequality.

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  3. I am skeptical of the GAO estimates of what program costs for particular tasks really are. Remember, they are the ones that said that it costs 6.3% of the amount of th benefit payment to figure out the attorney fee and pay it.

    But, If it really does cost 35% of the Administrative Budget for SS to manage SSI, my first question would be how that compares the total payments of SSI and then what is driving that cost. Are living arrangements determinations costing more to make than money saved? I would at all the other nickel and dime deductions needed in SSI and see how much it costs to make determinations where the process just ends up costing more money than is saved. I don't know if that is the case, but that would be the important figure to know.

    And to the commenter at 11:50 it is true that benefits are reduced for Welfare when you work but if the goal is to get people off of Welfare, then not taxing their benefits at 50% if they work under SSI and creating a system more like the trial work period under Title II would be a start.

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  4. In a world where almost all information is suspect this report is hard to believe. As a former SSI claims rep and longtime manager I do not believe it for a minute. SSI is more complicated but most decisions--living arrangements, resources, even ISM are not difficult. What does take longer is monthly income reporting, deeming and enforcement issues do to non reporting by recipients. But 35% of the budget--no.

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  5. Only 35%?
    T2 beneficiaries contact social security when they file for social security when they move or change Banks and when they die. There's occasional issues in between but not many. SSI beneficiaries come into contact when they file and for most at least a few times a year to report living arrangement change income change we catch them doing something that they didn't report etc. My office has nine SSI claims reps and six title 2 claims reps. Looking at the numbers that come in, a significant number are for SSI related issues.
    SSI used to have trial work periods. But that meant if they worked eventually they could be thrown off of ssi. Now they're benefits are reduced but they're never thrown off for working. I may not receive monthly benefits but if they were to stop they're right back on.

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  6. SSI was originally a stingy and mean program and hasn't changed much. Back in the day, many CRs were SSI only hires and hadn't yet gotten jaded. But the inherent stinginess of the program is in it's dna and in the hearts and minds of many who administer it today. It still is a "program of last resort" requiring people to pauperize themselves first. Got a life insurance policy with value, cash it out - eligible for a VA benefit, better file or else - got a bank account - better be set up right and better not have much in it. Before filing for SSI, you have to prove your worthiness by using everything you have - the taxpayers insist that before you get a handout from them you have nothing left. Those 86 programs that don't count against SSI - most are obscure and limited and sound good but there's not much "there" there. There is still a lot of moral stinkeye by SSA staff on SSI recipients. And the damn IG and GAO - I'd suggest half the complexity of the modern program is in response to those 2 groups always looking for hairs to split and overpayments that look good on paper and make everyone's lives miserable. I recall commenting on an OIG proposal where individuals living in group homes would not be living in their own household but members of a household, and have their payments reduced. It didn't get far but it was pretty far along. Clearly, such proposals have $$ as the prime consideration, the people, not so much. And when that's the lens the program is viewed by, by the administration, Congress, and even SSA itself, the people the program serves become secondary. Given Nixon federalized SSI because the states were failing to run it well when they had control, maybe this is one of the few times when killing the program in order to save it is worth considering.

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  7. In Mississippi where there's no Medicaid expansion, recipients need that SSI, even if it's only $5.00 to get their Medicaid. Older people usually take lots of medicine and need that Medicaid but let that life insurance policy that they've paid into for 40 years accumulate some value and goodbye SSI and Medicaid.

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  8. Administering the disability programs, DI and SSI, takes about 2/3 of SSA's annual budget.

    Consider that all State-level Disability determination services, roughly 20,000 people, plus another 10,000 people in the Hearings offices are almost entirely devoted to disability. The decision process for a disability application can take weeks (5%), months(70%) or years (25%). Retirement applications, by contrast, can be processed in days or weeks. The Disability programs require a larger share of in-person field office resources than do the retirement & survivors programs,as well as a similar share of systems resources.

    In a given year, there are about 6 million new claims for Old Age and Survivors insurance, and about 4 million for DI and SSI (about 1/3 of which are ineligible and are not actually adjudicated).

    Comparing the ratio of administrative costs to program benefits as the GAO witness did, is not a helpful concept.

    There are 55 million Old Age and Survivors benficiaries receiving an average monthly benefit of almost $1,500. There are 9.4 million DI beneficiaries receiving a monthly average of $1,100 and 7.7 million SSI beneficiaries (including kids and aged) receiving an average of less than $600 per month. And that's the point: each month the Social Insurance programs pay out $93 billion to 65 million people), while SSI pays out $4.8 billion to 7.8 million.

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  9. I understand all the points made for and Against ssi but let me make one more.

    Accounting wise, ssi might pay out less and take more ssa resources to administer. But the value of that money to that particular population is arguably worth way more than the value of other benefits to wealthier recipients.

    So when you do a cost benefit analysis please remember that the value of a dollar is way different depending on who you ask.

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  10. If yo take the numbers 12:48 PM uses, you're basically spending 350 million a month to avoid a "possible" billion per month in payouts for SSI if those receiptiants averaged $700 instead of $615. Senator Tom Harkin once called a billion dollars "pencil dust," when refering to the Federal budget (about 20 years ago).

    For people who qualify medically for SSI, I have a few questions...
    1. Why does it matter WHOM the person lives with? Seriously, WHY? Not because "the rules," but WHY? I can understand at Bill Gates or even Kennedy family money... But, not most American families. Children yes, adults no.
    2. Why does it matter if family members are able to give "chump change" help?
    3. Why does it matter if they have $3000 in a bank account?
    4. Why does SSA discourage work by 50% offsets? My only conclusion is they want to keep them miserable. Work should be encouraged, not discouraged. 11:50 AM may not like calling it being "punished," but I am sure that's how people look at it. You're being punished for working.
    5. Why do people insist on calling SSI "welfare?" Demonization seems the reason to me.

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  11. It’s called welfare because it is welfare. And, its demoralizing and punitive because it is designed to keep the helpless helpless.

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  12. It matters if a person pays rent or not because people who have to pay rent are going to use more of their benefits on rent than someone who doesn't pay rent, hence have less left over for say food or other expenses.
    If SSI only went by income, there could be people with a large amount of money in the bank that would qualify. Most people don't want to pay benefits that are designed for poor to people that don't need it.
    SSI work 50% offsets does encourage people to work more than the 100% offsets that are imposed for non work income, say like SSA or VA benefits.
    SSI is sometimes referred to as welfare because it is a welfare program where income and assets affect eligibility and payment amounts.
    The SSI program has quite a bit of small time fraud--not reporting income, assets, change in living arrangements, marriages, etc. Some is ignorance on the part of the beneficiaries but some is intentional. Changing SSI to make it less complicated could either mean spending quite a bit more (no longer penalize those who don't pay fair share, etc) or spending less (doing away with things like the PASS program, doing away with income and asset exclusions, etc.)

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    Replies
    1. Are there REALLY that many who are getting "free rent?" I mean, their family might not charge them because they couldn't pay... But, that doesn't mean the family is rich or has no expectation of them paying something. I think what you're describing is way out of the norm... It isn't applicable for most applicants. So, it seems to me to be an excuse for skinflints to hang their hat on on without a great impact on payments, but, a large impact on oversight expenses.

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    2. $700+ a month and pay rent out of that? Quite a few don't pay rent on that income.

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  13. The 2k/3k resource limit is a relic. It needs to be blown up - but only Congress can do that.

    My Modest Proposal is to abolish SSI and give every legal resident of the USA an Universal Basic Income of $794/month. . .with no strings attached.

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