Bills Would Bring Income Support for Low-Income Seniors and People With Disabilities Into the 21st Century

August 18, 2014

Nearly 8.4 million poor and near-poor people in this country depend, at least in part, on SSI (Supplemental Security Income) benefits to make ends meet. Most are people under 65 who have severe disabilities, but roughly 2.1 million are seniors.

SSI benefits are extremely low — currently a maximum of $721 a month for individuals and $1,082 for couples, when both spouses qualify. They’re the only source of income for more than half the people who receive them.

This is one, though probably not the only reason that the poverty rate for working-age adults with disabilities is more than 16% higher than the rate for those without them.

It’s also probably one reason that nearly one in seven seniors lives in poverty, according to the Census Bureau’s latest Supplemental Poverty Measure report.

Bills introduced in Congress would improve the financial circumstances of many SSI recipients — and in several ways. They’d also enable more low-income seniors and people with disabilities to qualify.

The maximum benefit would still inch up annually, based on increases in the consumer price index the Social Security Administration uses.

But the bills, as their title suggests, would restore SSI by updating and then indexing to a consumer price measure the dollar amounts of three provisions that haven’t been adjusted for a very long time — in two cases, not since the program was created in 1972.

The bills would also wholly eliminate a provision that may deter friends and family members from lending a helping hand — and penalizes beneficiaries when they do.

Further explanation of some pretty complicated stuff.

Exclusions. SSI benefits are adjusted down from the maximum based on two types of income SSI recipients may receive. But in both cases, the adjustments begin only if the income exceeds a certain amount. This is known as an exclusion.

One exclusion applies to income earned from work. At this point, it’s $65 a month — about nine hours at the federal minimum wage. Any earnings above the amount reduce benefits at a rate of 50 cents for every dollar earned.

The proposed Supplemental Security Income Restoration Act would immediately raise this exclusion to $357, nearly restoring the value it originally had.*

It would thus also restore the incentive to work, when possible. So it would, among other things, encourage recipients to see whether they could “graduate” from SSI by engaging in substantial gainful activity.

The second exclusion applies to certain other types of income, e.g., retirement benefits, interest on savings or some combination thereof. It’s currently $20 a month. Anything more reduces benefits on a dollar-for-dollar basis. The bills would initially raise this exclusion to $110.

Assets. To become — or remain — eligible for SSI, a senior or severely disabled person can have no more than $2,000 in savings or other resources that could readily be converted to cash, e.g., a life insurance policy, heirloom jewelry (unless the recipient wears it). The asset limit for couples is $3,000.

Neither limit has been adjusted since 1989, when dollars went a whole lot further than they do now.

The very low limits pose significant problems. From one perspective, they exclude people who genuinely need the benefits. From another, they keep SSI recipients from saving enough to cope with all but the most minimal emergencies.

As a benefits coordinator at Bread for the City notes, moving costs alone may exceed the limit. So it can keep recipients stuck in housing they can’t afford — or perhaps in supportive housing they no longer need.

She also notes the perverse incentive to spend down savings, even on things not needed — and also to rapidly spend down the lump sum back-payments the SSI program frequently makes because the approval process tends to be slow.

The bills would increase the asset limits to $10,000 for an individual and $15,000 for a couple. Then, as I said, they would annually rise to preserve their real-money value — just as the exclusions would.

In-Kind Support and Maintenance. Some very complicated rules apply when recipients don’t pay the full costs of their food and shelter, with or without SNAP (food stamp) benefits and housing assistance.

Even the Social Security Administration finds the rules “cumbersome to administer” — and both burdensome and intrusive for recipients.

Basically, SSI benefits are reduced, up to a third, when recipients live with someone else and don’t pay their full share of food and housing costs. Exceptions here if the someone else is a spouse or the recipient a minor-age child.

But when the child turns 18, the benefit cuts kick in — and they come on top of any cuts due to income exceeding the exclusions.

Benefits are also reduced if, for example, a friend or relative pays a utility bill — or buys some groceries when, as so often happens, SNAP benefits run out before the end of the month.

The SSI Restoration Act would repeal this part of the law — and with it, the unintended undermining of what we like to think of as America’s family values.

I don’t suppose I need to tell you that the bills are going nowhere in this Congress. But perhaps they’ll spur some movement toward reforming a good program that sorely needs revisions to bring it into the 21st century.

* The value would have been fully restored, with a little extra if Congress had passed the SSI Restoration Act last year, when it was introduced in the House. This is also true for the general income exclusion.


If Not Congressman Ryan’s Super-Block Grant, What?

August 11, 2014

Bashing Congressman Paul Ryan’s super-block grant, as I did, might have left the impression that I think the safety net is just fine — or rather, would be if it were adequately funded and Temporary Assistance for Needy Families overhauled.

In fact, I think some of his starting premises are accurate. And the more thoughtful Opportunity Grant bashers I’m familiar with think so too.

The safety net does need “repair,” as he terms it. Benefits are, in some cases, structured so as to create sharp cliffs, i.e., abrupt losses of support when recipients’ incomes rise even slightly.

Federal assistance is generally “fragmented.” Most is targeted to one specific need — food, housing, health care, etc. And targeting may vary even for one need.

However justified, the targeting has created administrative burdens for both public agencies and the nonprofits they engage, through grants and contracts, to deliver services to low-income people.

At the same time, it often causes the intended beneficiaries no end of grief because they have to apply here for this, there for that — and document some things here, others there. Then they have to do it all over again if their circumstances change — a periodically, no matter what.

All this, of course, assumes they know what aid they might be eligible for. Many don’t, as people plunged into poverty by the Great Recession know well.

So how could we make the safety net more efficient and more friendly to both people in poverty and people on their way up and out? The Center for American Progress offers some answers.

Encourage states to make choices that will reduce bureaucracy. These choices come in several flavors.

One is for states to use the flexibility they already have to align eligibility standards across multiple programs and then use the information collected for one to automatically enroll qualified people in others.

States are already moving in this direction. For example, 38 states and the District of Columbia have integrated their intake and eligibility determination processes for Medicaid and SNAP (the food stamp program).

Another, specifically for SNAP, is to use certain standard deductions in determining income eligibility, rather than calculations based on actual itemized costs.

Still another, reported by CLASP in its brief on an initiative to help states streamline their work support programs, is to eliminate eligibility and verification requirements that aren’t required by federal laws or rules.

Adopt “no wrong door” approaches. The basic idea here is that people seeking help can get linked to any and all assistance they’re qualified for on a single website or at a single location, e.g., a center operated by a public agency or community-based organization.

CAP cites the Benefit Bank and two other national nonprofits that collaborate with local organizations to provide one online “door” for screening and applications.

An award-winning project called VITA Plus takes a different approach. It uses the Volunteer Income Tax Assistance sites that the Internal Revenue Service funds to screen clients for benefits they could be eligible for, in addition to the tax credits VITA volunteers conventionally help clients claim.

Smooth remaining benefits cliffs. As CAP observes, policy changes and program innovations at the federal level have already reduced — or in some cases, eliminated — the unintended penalties families incurred as they moved from welfare to work.

Health insurance is a prime example — and would be even more if recalcitrant states would expand their Medicaid programs as the Affordable Care Act envisions.

A this point, residents of 26 states and the District can transition directly from Medicaid to subsidized health insurance policies — generously subsidized if their incomes tip them just over the ACA-established Medicaid limit.

There are additional opportunities. For example, the U.S. Department of Agriculture permits states to postpone downward adjustments of SNAP benefits for five months when families move from welfare to work. Only 20 states do so now.

Loss of childcare subsidies is another cliff states have the flexibility to smooth.

Reduce reporting and recertification requirements. Agencies obviously must at some intervals — and in some manner — make sure that people enrolled in safety net and other means-tested programs are still income-eligible.

But requiring beneficiaries to recertify frequently creates cliffs for the many low-wage workers whose earnings go up and down according to the irregular schedules employers often impose.

And when workers must show up in person, with reams of paper — and wait until someone gets around to seeing them — they may lose work hours. Even their jobs perhaps. Needless to say, such requirements also create hardships for frail seniors and people with disabilities.

Once again, states can streamline their bureaucracies and make life easier for beneficiaries at the same time. And once again, some already do.

Now, as CAP hastens to say, these improvements are only “a piece of the puzzle to provide a hand up” to people in poverty.

And the improvements themselves will require public investments. Smoothing cliffs, for example, will require funding to extend benefits up the income scale.

Streamlining access to benefits will require investments to strengthen technological capacities, e.g., heavy-duty computer systems, online screening and applications tools, programs that talk to one another.

But we clearly don’t have to throw the baby out with the bathwater, as Ryan’s super-block grant would do.

NOTE: I’m painfully aware that this post fails to do justice to the initiatives — or even types of initiatives — that public agencies and nonprofits have undertaken, along the lines that CAP recommends. This alone is proof, if any were needed, that the federal government hasn’t imposed “cookie cutter” management or stifled civil society.




Congressman Ryan Unveils His Safety Net Reform Plan

July 28, 2014

Congressman Paul Ryan took up the cause of anti-poverty policy reform not long after his bid to become Vice President failed. He visited local programs, accompanied (and probably selected) by the ultra-conservative founder and president of the Center for Neighborhood Enterprise.

He issued a big — and hardly objective — review of federal programs attributed to the War on Poverty. He held five hearings purportedly designed to help lay the groundwork for a new and better approach.

And last Thursday, he finally announced some proposals at an event hosted by the right-leaning — but not radically right-wing — American Enterprise Institute.

The big headliner should come as no surprise to anyone who’s even casually familiar with his persistent celebrations of the Temporary Assistance for Needy Families program and/or his annual budget plans.

He wants to create a block grant. It’s not “a garden variety block grant,” he says, because states would have to meet certain requirements. But if it walks like a duck and quacks like a duck ….

And if our experience with eminently-flexible block grants tells us anything, it portends trouble for low-income people.

The proposed Opportunity Grant would initially be a pilot. States could submit plans to consolidate 11 diverse safety net programs, e.g., SNAP (the food stamp program), several forms of housing assistance, TANF, the block grants for child care and community development.

States would get the same total amount of funding they’re entitled to now. If another recession or a natural disaster put more people at risk of hunger, they could, if they chose, put more money into SNAP, but only by reducing other types of assistance.

Ryan’s formal proposal says that some counter-cyclical component might be added to boost assistance during recessions. It might not be more funding, however, but instead a requirement that states set aside some of the money they receive in a sort of rainy day fund.

But if food, housing, home energy and other costs rise, as they surely will, the participating states will get squeezed, just as they’ve been squeezed by the flat-funded TANF block grant — and, like as not, with similar results.

States would have to spend the funds on “people in need.” Aid would have to go first, but not exclusively to people living below the poverty line.

States would not, however, have to sustain their own spending levels on safety net programs. As Bob Greenstein, President of the Center on Budget and Policy Priorities, warns, they would have “tantalizing opportunities” to use their block grant funds instead — as in fact, they have with their federal TANF funds.

States would have to see to it that everyone who can work does — or engages in preparation for work. This will require significant expenditures because states currently don’t have job training programs big enough to enroll everyone whose benefits would hinge on their participation.

They would also have to commit funds to expanding their networks of service providers. And they would have to give folks their choice of providers.

Whatever their choice, they’d get a single caseworker to help them develop an “opportunity plan,” oversee compliance and dole out sanctions. Bonuses too perhaps. The caseworker would apparently also dole out benefits, based on some sort of needs assessment.

This could mean a smaller (or no) SNAP benefit in exchange for, say, a low-cost car loan. Or it could mean a whole battery of benefits and services for some people in need and nothing — or much less — for others. “Fundamental math,” as CBPP’s top-level TANF expert says.

And where are the states going to get all those additional caseworkers? Here again we see less money available for programs that help meet people’s basic needs, she says elsewhere. Less perhaps for job training and other services as well.

Lastly, states would have to engage an independent entity to evaluate success according to outcomes identified in their plans. Success here is moving “people out of poverty and into independence.”

But a key measure for providers would be how many people “they help move off welfare.” This, as TANF has taught us, leads to a “work first” approach, i.e., one that requires participants to take any job they can get as soon as they can get it. Legal Momentum reports the dismal results.

In short, the OG pilot is for all the world like TANF on steroids, though with some accommodation for elderly and disabled people.

And to what end? The integrated, innovative, localized approaches Ryan says will be gained by getting “the federal bureaucracy” out of the way are already possible, as the state-level initiative that CLASP and partners are supporting shows. Likewise the Catholic Charities programs he praises.

The pilot is only one of the proposals Ryan tees up to “make federal aid both more effective and more accountable.” Some have — and could gain further — bipartisan support. Some, one hopes, not.

For example, Ryan proposes other block grants — one for Head Start, which he still insists in an utter failure, and two for the various federal funding streams that flow to public elementary and secondary education programs.

I felt as if I were suddenly transported back to the early days of the Reagan administration.

Well, Ryan claims that he’s just trying to start a conversation, as he also did when he launched his hearings. My own sense is that we should begin by talking about how these various proposals for “expanding opportunity in America,” as he styles them, comport with his budget plans.

The latest, for example, would cut SNAP spending by $137 billion over the next 10 years. And, as the Coalition on Human Needs notes, other programs that could be rolled into the “super-block grant” are in the part of the budget that Ryan’s plan would cut by about twice as much as sequestration requires.

“My work on poverty is a separate thing,” he’s said. Tell that to the families that are running out of food because their SNAP benefits were cut — or the parents of the more than 5.6 million preschoolers who are eligible for federally-subsidized child care, but can’t get it.


Millions of People Living Always on the Margin

June 12, 2014

Nearly 50 years ago, Molly Orshansky, who invented our official poverty measure, noted that when the number of people below the applicable poverty threshold rose, the number just above dropped. And then the reverse happened.

“This reciprocal trend,” she wrote, “suggests that there may be a sizable group in the population living always on the margin — wavering between dire poverty and a level only slightly higher but never really free from the threat of deprivation.”

A recent report from the Census Bureau confirms this insight. Or so it seems.

What we know for sure is that, in 2011-12, virtually the same number of people who were near-poor at the beginning fell into poverty as rose above the Bureau’s near-poverty cut-off, i.e., 125% of the applicable poverty threshold.

Fewer than either remained in the near-poverty group for even this brief period. So many people are indeed on the margin — 14.7 million in 2012. And if past is prologue, almost as many will plunge (or plunge back) into dire poverty as will gain more than brief freedom from the threat of deprivation.

This is only one of the interesting things the report tells us. The other big eye-opener, for me, is that the near-poverty rate doesn’t behave like the poverty rate.

The latter is always considerably higher — 15%, as compared in 4.7% in 2012. But the poverty rate swings up and down as recessions set in and end. The near-poverty rate barely registers the downturns and upturns in our economy.

Here’s another difference. The poverty rate for seniors, according to the official measure, is much lower than the rate for children — 9.1%, as compared to 21.8% in 2012. But the near-poverty rates were statistically the same.

In other ways, the near-poverty rates resemble differences in poverty rates among groups the Census Bureau reports on, but only in a very general way.

For example, in 2012, the near-poverty rate for blacks was higher than the rate for whites — 6.3%, as compared to 4.5%. But the poverty rate gap was more than twice as great — 27.2%, as compared to 12.7%.

Similarly, the near-poverty rate for single-mother families was higher than the rate for married couples — 7.3%, as compared to 2.8%. But again the gap was far wider for their respective poverty rates — 30.9%, as compared to 6.3%.

What this means, of course, is that fewer blacks and single mothers were living on the margin because more were officially poor, which is very poor indeed.

This is also the case for working-age people not in the labor force, including those with severe disabilities. The poverty rate for those neither working nor actively looking for work was 28.4%, while their near-poverty rate was 6.7%.

These are only a few examples of comparative rates, based on the latest published Census figures. The near-poverty rate report also compares rates for 2012 with those for 1966, when Orshansky published her paper.

Overall, the near-poverty rate dropped, though only by 1.6%. And it dropped enough to be statistically significant for virtually every group the report breaks out.

The exceptions related to changes in our labor market. Specifically, the near-poverty rate for adults over 25 with less than a high school diploma or the equivalent was 1.8% higher in 2012.

Rates were also higher for adults in this age group at every education level below a four-year college degree or more. For those with the degree(s), the very low near-poverty rate was effectively the same — 1.2%.

And what about our safety net? Census can’t backtrack to 1966, but it does provide figures for the number of near-poor people who benefited from six major programs — or types of programs — in 1981.

We see significant changes in the number and percent of near-poor people served between the baseline year and 2012 for only four. And only one of them represents a decrease.

In 2012, 9.9% fewer near-poor people received public assistance, i.e., cash benefits from the Temporary Assistance for Needy Families program* and/or one of the dwindling state general assistance programs.

Near-poor participation in SNAP (the food stamp program) increased by the same percent. But the increase for the Earned Income Tax Credit was larger — 12.5%. And it’s the only safety net program Census reports on that benefited more near-poor than poor people.

The program with the greatest reach of all was the free and reduced-price part of the school lunch program. In 2012, it served 84.6% of near-poor children and a barely higher 88.5% of children in poverty. For the near-poor, this represents a 16.6% increase over 1981.

By and large, I think these changes, as well as the raw participation figures tend to confirm studies indicating that safety net spending has shifted toward people who, for one reason or another, are viewed as deserving — adults who work and those who can’t be expected to.

More conclusively, the report confirms the fragile hold on even a modicum of income security that Professor Mark Rank, among others, has sought to demonstrate — and that Orshansky flagged so long ago.

* TANF hadn’t replaced welfare as we knew it in 1981. So the comparison is to its predecessor.


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