Supplemental Security Income

SUPPLEMENTAL SECURITY Income (SSI) is a cash assistance program administered by the Social Security Administration in the United States. However, the program is separate from other Social Security programs because it is funded from general government revenues and has no connection to Social Security payroll taxes. Also, eligibility for SSI does not depend upon having any previous work history. Legislation creating SSI passed in 1972, and the program began paying benefits in 1974. SSI replaced a collection of programs providing benefits to different types of recipients that were administered by the states as prescribed by the Social Security Act of 1935 and its amendments in 1950.

SSI provides cash assistance to the “deserving poor,” who are not expected to earn a suitable income compared to the general working-age population. These groups include the aged (65 and older), the blind, and the disabled. Blind and disabled children are also eligible for SSI benefits. With SSI, the federal government assumed control of preexisting programs that had been administered through grants to individual states.

In January 2005, the federal portion of the SSI benefit for individuals totaled $579 per month, or $6,948 per year. The corresponding amount for married couples was $869 per month, or $10,428 per year. These amounts are adjusted each year for inflation. If SSI were the only source of income, then both of these amounts would leave their recipients below the corresponding poverty thresholds. But most state governments choose to augment federal SSI benefits, and only six states abstain (Arkansas, Georgia, Kansas, Mississippi, Tennessee, and West Virginia). State-funded additions can help to bring SSI recipients above the poverty threshold. In most states, eligibility for SSI also automatically qualifies a person for Medicaid and food stamps.

Eligibility for SSI requires passing a resource test and an income test, in addition to being aged, blind, or disabled. Singles cannot have countable resources worth more than $2,000, and married couples have a $3,000 limit. Countable resources include cash, financial assets, land, life insurance, automobiles, personal property, and other valuables. But excluded items include the applicant's home, household goods, one wedding ring and one engagement ring, burial spaces, a car, and other limited resources.

Assuming an applicant meets the resource test, then the income test applies. One may receive the full SSI benefit amount if unearned income is less than $20 per month, and earned income is less than $65 per month. Any unearned income above $20 results in a one-to-one reduction of SSI benefits. For each dollar of earned income above $65, the SSI benefit is reduced by 50 cents.

In 1974, elderly recipients dominated SSI. About 2.15 million people aged 65 and older received SSI benefits in 1974, which was about 59 percent of the total. Initially, only 70,000 blind or disabled children received SSI benefits, and the total number of blind or disabled beneficiaries aged 18 to 64 was about 1.4 million people. The total number of SSI recipients grew from 3.6 million in 1974 to 6.7 million in 2004. But in 2004, aged recipients totaled 1.8 million people, or about 27.4 percent of the total. In 2004, there were about one million children and 3.9 million beneficiaries aged 18 to 64. Expenditures rose from $3.8 billion in 1974 to $34.2 billion in 2004. After accounting for the effects of inflation, this represents a 140-percent real increase.

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