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The Supplemental Security Income Program:
Welfare Reform,
State Supplements,
and Maintenance of Effort
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Topic
| This Information Brief provides a description of one of the largest federal welfare programs, Supplemental Security Income, with a focus on the state supplementation portion of the program.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 made sweeping changes to the welfare system and placed much of the decision-making authority back with the states. However, for the Supplemental Security Income (SSI) state supplementation program, the Act did not provide maintenance of effort relief, so states must continue to provide “optional” state supplements to individuals who receive SSI or risk the loss of federal financial participation in the Title XIX Medicaid program.
States would like the flexibility to direct these state funds toward their comprehensive state welfare reform efforts which include the aged, blind and disabled population. The National Governors’ Association (NGA) will be seeking some relief from the maintenance of effort requirement in the form of “technical corrections” to the Act.
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Background
| SSI is a federal welfare program that provides monthly cash payments to needy aged, blind, and disabled persons in accordance with uniform, nationwide eligibility requirements. One of the largest cash assistance programs for low income individuals, SSI is a means-tested, federally administered program that was established in October of 1972 and began making payments in January of 1974. The SSI program provides “flat grants” based on a uniform federal income support level. In addition to the federal SSI payment, both a mandatory and an optional state supplementation was authorized for SSI.
As an incentive for states to provide the optional supplements, the Social Security Administration (SSA) initially administered the state supplements at no charge to the states; however, SSA began to charge an administration fee for SSI state supplements in October of 1993. In 1976, Section 2 of Public Law 94-585 required that states choosing to provide optional state supplements continue these payments in order to receive Federal matching funds for Medicaid. States are required to continue optional state supplement payments at least at the level paid in April 1983, as stipulated by Section 402 of Public Law 98-21 which was passed in 1983.
Social Security benefits are the single highest source of income for SSI recipients. The SSI program was envisioned as a guaranteed minimum income for the aged, blind, and disabled which would supplement the Social Security Program. An income-related program, SSI provides for those who were not covered under Social Security or who had earned only minimal entitlement under the program. In other words, the program was intended to build on the Social Security program as a basic national income maintenance system for the aged, blind and disabled.
Approximately 38 percent of recipients receive Social Security benefits (63 percent of the aged, 31 percent of the disabled, and 36 percent of the blind) and about 13 percent receive some other type of unearned income. The SSI program is funded by general revenues of the U.S. Treasury, while Social Security benefits are funded by the Social Security taxes paid by workers, employers, and self-employed persons. The federal SSI benefits are indexed to the Consumer Price Index (CPI) and by the same percentage as Social Security benefits.
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Caseload
and Recipient
Characteristics
| The number of recipients on SSI has risen from nearly 4 million in 1974 to nearly 6.5 million in December 1995. Of these recipients, 1.4 million received payments on the basis of being aged, about 5 million on the basis of being disabled, and about 85,000 on the basis of being blind. For disabled SSI recipients between the ages of 18 and 64, 28.2 percent were eligible on the basis of mental retardation and 31 percent on the basis of other mental disorders. Almost 60 percent of all eligible SSI recipients are eligible on the basis of a mental disability. Approximately 16.2 percent of the SSI adult population are age 65 and over.
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Program Cost
| Total annual benefits paid under SSI rose from about $5.2 billion in 1974 to $28.1 billion in 1995 ($24.4 billion in federal payments and $3.7 billion in state supplements). See the attached chart for state supplementation totals.
The federal monthly benefit standard for 1997 is $484 for an individual and $726 for a couple. The amount of state supplement ranges from $2 a month to $362 a month for an individual (this excludes SSI recipients receiving a state supplement because they are living in some type of group living arrangement). The average monthly state supplementary payment in December 1994 was $107.
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State Supplements
| Approximately 45 percent of SSI recipients receive a state supplement. The five states with the highest number of recipients, California, New York, Pennsylvania, Massachusetts, and Michigan, account for about 73 percent of all persons receiving a state supplement in 1995.
All but eight states and jurisdictions provide some form of optional state supplementation. The following do not provide a supplement: Arkansas, Georgia, Kansas, Mississippi, Tennessee, Texas, West Virginia, and the Northern Mariana Islands.
Under mandatory supplementation rules, states are to maintain recipients of the programs of old age assistance, aid to the blind, and aid to the permanently and totally disabled at their December 1973 income level. In December 1995, less than 0.1 percent of all recipients were receiving payments based on the mandatory supplementation rule.
States may choose to provide an optional supplement to federal SSI payments in addition to this mandatory supplementation. The optional supplement is intended to help meet the needs of state residents that are not met by the basic federal SSI payment. The state determines the categories of persons and the amount it will supplement. In addition to categorical variations which may apply, (aged, blind, disabled) a state may elect to vary optional supplementary payments to account for geographic or living arrangement cost differences for a recipient.
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Special Housing
Needs
| Many states limit their supplementation to certain categories of individuals based on certain indicators of need such as special housing needs. A significant number of the aged, disabled and blind population receiving SSI cannot live independently because of mental or physical limitations and have housing needs which include services in addition to room and board. These services often include supervision for daily living as well as protective services for the mentally retarded, chronically mentally ill, or the frail elderly.
States supplement a variety of living arrangements, the three most common being living independently (28 states), assisted living (38 states), and living in Medicaid facilities (16 states). These three arrangements account for approximately 85 percent of the recipients receiving state supplementation and include adult foster care homes; domiciliary care homes; congregate care; or group homes. Such nonmedical supervised and/or group living arrangements generally cost more than the federal SSI benefit needs standard of $484 in 1997, and often more than the combined Federal and SSI state supplementation for those classified as living independently. In some states, the cost of supervised group living care is also partially met by direct state funding of the staff.
In a number of states, the state pays private residential facilities directly for nonmedical group care based on a rate negotiated by the state with each facility. In such cases, there is often a personal needs allowance payment made directly to or on behalf of the residents of the facility.
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Basic Eligibility
| To qualify for SSI payments, a person must satisfy the program criteria for age, blindness or disability. Provisions enacted in 1996 prohibit SSI and disability insurance eligibility for individuals whose drug addiction or alcoholism is a contributing factor material to the finding of disability. Children may qualify for SSI if they are under age 18, unmarried, and meet the applicable SSI disability or blindness, income, and resource requirements.
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Citizenship and
residency
requirements
| To qualify for SSI, a person must be a U.S. citizen or U.S. national. Provisions enacted in 1996 bar current and future legal immigrants from receiving SSI until they become citizens. Refugees or asylees are SSI eligible only for their first 5 years in the U.S. Lawful permanent residents with 40 qualifying quarters of work may receive SSI benefits.
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Income and Resource
Requirements
| Individuals and couples are eligible for SSI if their incomes fall below the federal maximum monthly SSI benefit, currently $484 for an individual and $726 for a couple. SSI eligibility is restricted to qualified persons who have resources/assets of not more than $2,000, or $3,000 in the case of a couple.
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Connection
to Other
Assistance
Programs
| SSI law requires that SSI applicants file for all other benefits for which they may be entitled. Since its inception, SSI has been viewed as the “program of last resort”. In other words, after evaluating all other income, SSI pays what is necessary to bring an individual to the statutorily prescribed income “floor”.
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Eligibility for
Medicaid
| Generally, all SSI recipients receive Medicaid. States have three options as to how they treat SSI recipients in relation to Medicaid eligibility. The Social Security Administration is allowed to enter into agreements with states to cover all SSI recipients with Medicaid eligibility; no separate Medicaid application is required. As of January 1, 1996, 32 states and DC chose this option. SSI recipients in these states account for approximately 78 percent of all SSI recipients nationwide. Another option provided by seven states is that all SSI recipients are Medicaid eligible only if the recipient completes a separate application with the state Medicaid agency. The third option used by eleven states is the 209 (b) option under which states impose Medicaid eligibility criteria that is more restrictive than SSI eligibility as long as the criteria are not more restrictive than the approved Medicaid state plan in January 1972.
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Eligibility for
Food Stamps
| SSI beneficiaries are categorically eligible for food stamps and do not have to meet the net income eligibility standard of the Food Stamp program. Only those SSI beneficiaries living in households where other household members do not receive SSI benefits must apply for food stamps and meet the income eligibility standards.
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Summary
| The SSI Program was established as a supplement to Social Security and is one of the largest cash assistance programs for low income individuals. SSI provides a guaranteed minimum income for low income aged, blind, and disabled individuals who were not covered under Social Security or who had earned only minimal entitlement under the program. This federal welfare program provides monthly cash payments to needy aged, blind, and disabled persons in accordance with uniform, nationwide eligibility requirements. In addition to the federal SSI payment, both a mandatory and an optional state supplementation was authorized for SSI. However, states choosing to provide the optional supplements must continue to provide them at the same level they did in March of 1983 or the state will lose federal Medicaid matching payments.
While the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 made significant changes to the welfare system and gave much of the decision-making authority back to the states, the Act did not provide maintenance of effort relief for SSI. Therefore, states must continue to provide this “optional” state supplement to individuals who receive SSI.
States would like the flexibility to direct these SSI state supplement funds toward their comprehensive state welfare reform efforts which provide assistance for a variety of low-income individuals, including the aged, blind and disabled population. The NGA has included the repeal of SSI maintenance of effort as part of a policy position on welfare reform that was approved at the winter meeting in Washington, DC in February of this year.
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For further
information
please contact:
| Mary Dingrando, Senior Staff Associate
National Association of State Budget Officers
444 NorthCapitol Street, N.W., Suite 642
Washington, D.C. 20001-1511
Phone: (202) 624-5382 Fax: (202) 624-7745
email: mdingra@sso.org
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NASBO Information Brief
February 18, 1997
Volume 5, Number 1
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Policy Resources