As section III explains, an individual must meet certain requirements related to his or her income and resources to be eligible for SSI payments. In addition, all persons under age 65, and certain individuals age 65 or older, must be blind or disabled. Consequently, future SSI program expenditures will depend on a variety of difficult-to-foresee factors, including the performance of national and local economies, distribution of personal income, the prevalence of disability in the general population, and the determination of
disability according to the definition in the Act. Nonetheless, for planning purposes, we must develop the best possible projections of future SSI program recipients and expenditures.
This section presents projections of program recipients and expenditures under the SSI program for a period of 25 years. The projections rely on the intermediate demographic and economic assumptions developed for the 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds,
1 and they assume that the present statutory provisions and regulations under which the SSI program operates will not change during the projection period. The current projection model starts with estimates of the general population by single year of age and gender. We project transitions into SSI payment status separately for: (1) new recipients resulting from an application for program benefits; and (2) returns to payment status from suspended status. We project movements out of payment status separately for: (1)
terminations due to death; and (2)
suspensions of payment for all other reasons.
2 We re-examine and if warranted, revise the assumptions and methods the model uses each year in light of recent experience and new information about future conditions.
We first present select demographic and economic projections from the 2014 Trustees Report that we used for the SSI projections in this SSI Annual Report. The single economic parameter that has the most direct effect on the level of SSI benefits is the Consumer Price Index for Urban Wage Earners and Clerical Workers (hereafter denoted as CPI),
3 which is used for indexing the SSI Federal benefit rate. Sections
V.A and
V.B of the Trustees Report present a detailed discussion of these demographic and economic projections. An important feature of the intermediate assumptions in the 2014 Trustees Report is a gradual recovery from the economic downturn that began in late 2007. This downturn generated a significant increase in applications for SSI disability payments, resulting in an increase in projected SSI expenditures. We expect the level of applications to decline over the next several years as the economy recovers.
The following two tables summarize two key parameters underlying the estimates in this report. Table IV.A1 presents population projections by selected age subgroups that are consistent with the presentation of SSI recipient projections in the next section. Table
IV.A2 presents a complete history of the Federal benefit rates and Federal benefit rate increases since the inception of the program, along with projections of such amounts consistent with the economic assumptions underlying the SSI expenditure estimates in section
IV.C.
An adjustment is made to the monthly Federal benefit rate in January of each year for which there is an increase in the CPI, and it is identical to the cost-of-living adjustment (COLA)4 applied to Social Security benefits under the OASDI program after initial benefit eligibility. In previous years, the Federal benefit rate was subject to occasional ad hoc increases, either in place of or in addition to the automatic adjustments. Table
V.A1 presents a history of legislation affecting the Federal benefit rate.
