2007 Annual Report of the SSI Program

IV. ESTIMATES OF PROGRAM PARTICIPATION AND FEDERAL EXPENDITURES
UNDER THE SUPPLEMENTAL SECURITY INCOME PROGRAM, 2007-31

As described in section III, eligibility for payments under the SSI program depends on satisfying a collection of requirements related to the socioeconomic status of the individual, as well as the evaluation of disability or blindness for all persons under age 65, and for certain individuals at ages 65 or older. Consequently, future SSI program participation and expenditures will depend on a variety of difficult-to-predict 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 as defined in the Social Security Act. Nonetheless, for planning purposes it is important to develop the best possible projections of future SSI program participation and expenditures.

This section includes projections of program participation and expenditures under the SSI program for a period of 25 years as required by the provisions of Public Law 104-193 which mandate this report. The current projection model uses estimates of the general population by single year of age and gender. Transitions into payment status are projected separately for: (1) new recipients resulting from an application for program benefits and (2) returns to payment status from suspended status. Movements out of payment status are projected separately for (1) terminations due to death and (2) suspensions of payment for all other reasons.¹ The assumptions and methods used in preparing these projections are reexamined each year in the light of recent experience and new information about future conditions, and are revised if warranted. The presentation of projection results in the remainder of this section provides SSI recipient information by selected age groups. Where certain recipient categories have overlapping age distributions, recipient category totals are also shown.

A. DEMOGRAPHIC AND ECONOMIC ASSUMPTIONS

The estimates of program participation and Federal expenditures presented in this section have been prepared using the intermediate demographic and economic projections developed for the 2007 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance (OASDI) Trust Funds.²  The most significant economic parameter 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. Detailed discussion of these demographic and economic parameters is presented in sections V.A and V.B of the Trustees Report.⁴  The most significant parameters utilized for the projections presented in this report are summarized in the following two tables. Table IV.A1 presents population projections summarized for the age subgroups that are used in the presentation of SSI participant projections discussed in the next section.

1 Age as of last birthday.

2 Preliminary or estimated.

Note: Totals do not necessarily equal the sums of rounded components. Historical population data subject to revision.

As described in section III.D.1, the monthly Federal benefit rate is adjusted in January of each year for all recipients to reflect the increase in the level of consumer prices (the CPI) generally from the third quarter of the second prior calendar year to the third quarter of the prior calendar year. This cost-of-living adjustment is identical to the adjustment applied to Social Security benefits under the OASDI program after initial benefit eligibility. In previous years, occasional ad hoc increases were also applied to the Federal benefit rates, either in place of or in addition to the automatic adjustments. The history of legislation affecting the Federal benefit rates is presented in table V.A1. Table IV.A2 presents a complete history of the cost-of-living adjustment factors and Federal benefit rates since the inception of the program, along with projections of such amounts consistent with the economic assumptions underlying the SSI expenditure estimates discussed in section IV.C.

1 Increases prior to 1984 were effective for the payment due on July 1 of the year. Increases shown for 1984 and later are effective for the payment due on January 1 of the year.

2 A concept carried over from the former State assistance plans. There are currently about 100 of those cases remaining.

3 Benefits paid in January, 1974 were based on the Federal benefit rates established by Public Law 92-603, enacted October 30, 1972: $130.00 for individuals; $195.00 for couples; and $65.00 for essential persons. Retroactive payments were subsequently made to adjust initial payments to the higher Federal benefit rates established by Public Law 93-233, enacted December 31, 1973.

4 Ad hoc increases as specified in the law.

5 Originally determined as 2.4 percent, but pursuant to Public Law 106-554, enacted December 21, 2000, is effectively now 2.5 percent.

6 Benefits originally paid in 2000 and through July 2001 were based on Federal benefit rates of $512.00 and $530.00, respectively. Pursuant to Public Law 106-554, monthly payments beginning in August 2001 were effectively based on the higher $531 amount. Lump-sum compensation payments were made based on an adjusted benefit rate for months prior to August 2001.

Estimates presented in the sections that follow are based on the demographic and economic parameters described in this section. For the purpose of making these estimates, it is assumed that no changes will occur during the projection period in the present statutory provisions and regulations under which the SSI program operates.

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Section footnotes--

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¹The two main reasons other than death for termination of SSI payments are (1) failure to satisfy income and resource limitations of the SSI program and (2) recovery from a qualifying disability.

²House Document 110-30, published May 1, 2007.

³Historical values of the CPI are developed and published by the Bureau of Labor Statistics.

⁴Ibid, Section V.A, Demographic Assumptions and Methods and Section V.B, Economic Assumptions and Methods.