Highlights: 2007 SSI Report

The Supplemental Security Income (SSI) program is a nationwide Federal assistance program administered by the Social Security Administration (SSA) that guarantees a minimum level of income for needy aged, blind, or disabled individuals. This section presents highlights of recent SSI program experience, a summary of important changes to the program in the last year, a discussion of current issues facing the SSI program, and a summary of the key results from the 25-year projections.

During calendar year 2006, 1.9 million individuals applied for SSI benefits based on blindness or disability, a decrease of 1.5 percent over 2005. An additional 150,000 applied for SSI benefits based on age, a decrease of 4 percent from 2005. In 2006, 849,000 applicants were awarded SSI benefits, a decrease of 1 percent as compared to the 854,000 awarded benefits in 2005.

On average during calendar year 2006, 6.9 million individuals received Federal SSI benefits on a monthly basis. This group was composed of 1.1 million aged recipients, 5.7 million disabled recipients, and 69,000 blind recipients. Of the 5.8 million blind or disabled recipients, 0.7 million were aged 65 or older. During the year, 7.8 million aged, blind, or disabled individuals received at least 1 month's Federal SSI benefit.

Federal expenditures for payments under the SSI program in calendar year 2006 totaled $37.8 billion, up from $36.0 billion in 2005.

On average during calendar year 2006, 2.3 million individuals received Federally-administered State supplementary payments on a monthly basis. This group was composed of 0.6 million aged recipients, 1.6 million disabled recipients, and fewer than 50 thousand blind recipients. During calendar year 2006, 2.5 million individuals received at least 1 month's Federally-administered State supplementary payment.

State expenditures for Federally-administered supplements, excluding fees for Federal administration, totaled $4.2 billion in calendar year 2006, which is basically unchanged from 2005.

The percentage of SSI recipients participating in direct deposit reached 56 percent in fiscal year 2006. SSI recipient participation in direct deposit has increased gradually in recent years after experiencing a period of sharp growth when it more than doubled from 24 percent in 1995 to 49 percent in 2000.

The cost of administering the SSI program in fiscal year 2006 was $3.0 billion, which was roughly 7 percent of total Federally-administered SSI expenditures.

In January 2007, 7.3 million individuals received Federally-administered monthly SSI benefits averaging $467. Of these, 7.0 million received monthly Federal SSI payments averaging $435, and 2.3 million received monthly State supplementation payments averaging $157.

Since the 2006 SSI Annual Report was transmitted to the President and Congress on May 30, 2006, the following legislative change was made to the SSI program:

Extends consideration of combat pay as earned income for Earned Income Tax Credit (EITC) purposes for one additional year (for taxable years ending before January 1, 2008). For SSI purposes, EITC payments are excluded from income, and are not a countable resource for 9 calendar months following the month of receipt.

Thirty-five years after the enactment of the original Supplemental Security Income legislation, the SSI program continues to play a pivotal role in the lives of low-income Americans, helping the aged, blind, and disabled meet their basic needs. SSI provides these individuals with a safety net—a means to achieve some measure of economic independence—while also providing incentives to enter or return to the workforce. To the extent the program meets these needs, SSI continues to provide the very important "last-resort" assistance intended by Congress. As of January 2007, SSI Federally-administered payments were being made to more than 1.2 million aged individuals and over 6 million blind or disabled individuals.

However, the SSI program continues to face challenges related to limited Agency resources and to structural constraints that affect program effectiveness. For example, how can SSA maintain, let alone improve, SSI payment accuracy in an environment where budget restrictions limit the funding available for program integrity reviews? Additionally, how well does the program reach its intended recipients when resource limits have remained static since 1989? Both the accomplishments and the challenges of current program structure must be properly assessed as SSA continues efforts to improve program efficiency and build upon SSI program successes.

Perhaps the longest-running challenge of the SSI program is complexity. Complexity is inherent in the process of evaluating eligibility and payment levels for any means-tested assistance program, and in assessing the accuracy of payments that have already been made. In an effort to streamline program policy, SSA has published within the past year the following final regulations¹ related to consideration of income and resources.

Infrequent or Irregular Income consideration has been simplified by changing the evaluation period from a monthly to a quarterly basis. Previously income received in a month that in total did not exceed $10 of earned income or $20 of unearned income was excluded, if the income was received only once in a calendar quarter from a single source, or if the SSI recipient could not have reasonably expected the income. Under the new regulations, the first $30 of earned or $60 of unearned infrequent or irregular income received in the calendar quarter is excluded.

Interest and Dividend Income generally is no longer considered for program purposes. SSA experience has been that SSI recipients generally have very limited resources, and that documentation of such income very rarely leads to changes in eligibility or payment amounts. The program change streamlines the evaluation process by eliminating the need to document such income.

Gift Income Used to Pay Tuition, Fees or Other Necessary Educational Expenses is now excluded, providing the same exemption for gift income that applies to grants, scholarships and fellowships used for such purposes. Gift income for educational expenses is now also an exempt resource for 9 months after the month in which the income is received.

Wages and Unearned Income Received by Uniformed Service Members can now be considered in the month earned instead of the month received, if such income treatment would allow for more effective administration of the SSI program. Income for SSI purposes is traditionally considered in the month received, but uniformed service members are paid twice per month, receiving one Leave and Earnings Statement per month (that reflects prior-month earnings). This new option for income consideration removes the need for SSA to use a complex formula to determine countable income for service members.

An additional consideration in any evaluation of SSI program complexity is the appropriateness of such complicated standards. While SSA continues efforts to streamline and consolidate elements of the program, the basic framework of SSI is the same today as it was in 1972. Payment eligibility and amounts due are based upon the fluctuating needs of millions of low-income individuals. Every month is a new set of individual circumstances that may require a new determination.

However this inherent complexity, and the administrative challenges that go along with this complexity, are not in themselves evidence of a problem that must be resolved. SSA has studied SSI simplification proposals for many years, and has found that only limited modifications can be made without adversely affecting SSI beneficiaries or program administration or adding substantial program cost. In a means-tested program, benefit amounts are determined by the degree of an individual's (or couple's) needs. Thus the program must take into account all income and resources that an individual has, or can, access. Such accounting is labor-intensive, but not without merit. In comparison to the array of State assistance programs that existed before SSI, with varying eligibility requirements and disproportionate payment levels, the current program is a considerable improvement. And when large-scale simplification proposals are considered in relation to increased program costs or diminished eligibility, the existing SSI structure appears more reasonable.

Another crucial goal of the Agency's SSI program evaluation is the return to work of individuals who are capable of rejoining the workforce. To this end, SSA has updated regulations related to the duration of a plan to achieve self-support (PASS).² The PASS provisions contained in the original SSI legislation contained specific time frames that generally limited the plan's duration to 36 months. The new final regulations³ tie this duration period more directly to the employment goals rather than to a specific number of months, allowing SSA to consider individual needs. They clarify that a PASS must always have a feasible employment goal and a viable plan to reach that goal, while also keeping with Congressional intent to provide every opportunity and encouragement for the blind and disabled to return to gainful employment.

Automation initiatives have also assisted SSA's efforts to make work attempts less burdensome on the SSI recipient. The Agency's new SSI Monthly Wage Verification (SSIMWV) application provides field employees with an efficient means of recording and posting monthly wages for SSI recipients. The SSIMWV reporting process allows these SSA employees to input pay stubs, produce receipts, post earnings to multiple SSI records, and archive records of work reports—all through one computer application. While this new tool will assist in prevention of the overpayments that can result when recipients return to work, the efficient and accurate processing of wage reports afforded by the new program is perhaps its greatest benefit.

In efforts to address emerging issues within the SSI program, the Agency has also pursued legislative remedies—most notably through a proposal within the President's FY 2008 Budget. Current law allows for a 7-year maximum period of SSI eligibility for refugees and certain other noncitizens. Beyond the 7-year period, these individuals become ineligible for SSI unless they have attained U.S. citizenship. The FY 2008 Budget proposal would temporarily extend this eligibility to 8 years effective October 1, 2007 through September 30, 2010, acknowledging that many such individuals need additional time to complete the naturalization process. The plight of these individuals is significant because these immigrants often arrive in the United States with little or no immediate means of support.

For more than 70 years, SSA has been committed to paying the right benefit to the right person at the right time. The challenge in meeting this goal is especially apparent in the administration of the SSI program because payment eligibility and amounts are so closely tied to the fluctuating circumstances of individual recipients. In spite of these obstacles, the Agency consistently maintains a high degree of program accuracy. In FY 2005, 93.6 percent of SSI outlays were free of overpayment errors, and 98.6 percent were free of underpayment errors. While this payment accuracy rate is commendable, the difficulty in maintaining and building upon this success remains a consistent challenge.

As first described in last year's report, SSA gained an important program integrity resource through the extension of the pre-effectuation review (PER) process from Social Security disability to SSI initial adult disability claims.⁴ In the second year of its 3-year phase in, quality reviews are currently being performed on 40 percent of initial adult disability and blindness claims that are approved by a State Disability Determination Services (DDS).⁵ SSA projects that these PER verifications could potentially save up to $490 million over a 10-year period. However, it should also be noted that the savings attainable through the process can only be realized if funding is available to conduct such reviews.

Another extremely valuable tool in the maintenance of payment accuracy is the network of computer matching programs that SSA uses to verify eligibility and payment amounts. By establishing a process which provides for periodic (usually monthly) computer matches with financial institutions, social service agencies, and other entities, SSA has built an extensive means of verifying the income and resources reported by SSI recipients:

SSA can frequently identify SSI recipients who have been recently hired, received wages, or become eligible for unemployment through computer matching with the Office of Child Support Enforcement (OCSE).

A web-based application called the Internet-Electronic Death Registration (I-EDR) allows a State's Bureau of Vital Statistics to verify decedent Social Security numbers. Participating jurisdictions notify SSA, allowing the Agency to follow-up on the information, and stop benefits if necessary.

SSA field personnel use the SSA Access to State Records Online (SASRO) to verify an SSI recipient's receipt of State-administered benefits, including Temporary Aid to Needy Families (TANF), unemployment and workers' compensation.

Other important computer matching programs include information exchanges with the Department of Veterans Affairs, law-enforcement agencies, the Centers for Medicare & Medicaid Services (CMS) and the Department of Homeland Security (DHS).

Another Agency effort to prevent improper payments focuses on potential residency violations. SSI recipients are generally ineligible for benefits when outside the United States; thus SSA has taken a number of steps to verify that individuals currently on the rolls are within the country (or within the Northern Mariana Islands). In one review, Agency employees examined images of SSI checks, looking for any that were endorsed by a financial institution outside the U.S. In another program to double-check U.S. residency, SSA matches SSI beneficiary data with DHS records of deported individuals. SSA also has entered into agreements with a number of States (including Arkansas, California, Iowa, Louisiana, New Mexico, Oklahoma, Texas, and in 2006, Maine, New Hampshire, South Dakota and Wyoming) regarding the possible use of State Medicaid Investigators to conduct home visits for SSI recipients.

While these oversight mechanisms are all important parts of SSA's program integrity agenda, the most valuable payment accuracy tools available to the Agency are redeterminations—both nondisability redeterminations and continuing disability reviews (CDRs). Nondisability redeterminations are periodic reviews that verify living arrangement, income levels, and other factors related to SSI eligibility. The frequency of the reviews is based on the probability that changes affecting eligibility may occur. CDRs are reviews conducted to ensure that recipients are still disabled according to Agency rules. As with the redetermination policy, the frequency of CDRs is dependent upon the likelihood that a recipient's medical condition will change.

Both review programs are enormously cost-effective. Redeterminations are estimated to save 7 program dollars for every 1 dollar spent on processing. CDRs have an even higher return on investment, saving an estimated 10 dollars for every 1 dollar spent in processing. These tools are so effective because they are the best way to ensure that SSI recipients do not receive payments for which they are ineligible, and because they prevent future improper payments. In FY 2006, the Agency processed over 1 million SSI redeterminations, and over 1.3 million CDRs.⁶

While these numbers are impressive, it is important to note that in recent years, as stewardship funding has waned, the number of redeterminations and CDRs processed has steadily decreased. Budget limitations have required the Agency to focus resources on front line service (such as field office personnel for new claims) as opposed to stewardship initiatives (such as eligibility reviews). In FY 2006, SSA performed 25 percent fewer CDRs than in FY 2001. Perhaps more importantly since CDR savings result primarily from full medical reviews, in FY 2006 SSA performed over 60 percent fewer full medical reviews than in FY 2001. Within that same period, redeterminations have also decreased dramatically—by more than 50 percent.

An alternative method to ensure resource availability for these important integrity reviews is through dedicated funding. During the 7-year period of FY 1996 through FY 2002, SSA had the authority⁷ to increase discretionary spending caps on administrative expenses, when it performed program integrity functions. The President's Budget for FY 2008 contains a provision that would once again provide such authority. If enacted, this separate funding mechanism would allow SSA to prevent and recover more overpayments. Without such funding, however, improper payments may well increase faster than program outlays.

Another very important issue regarding the SSI program is that of sufficiency itself. To what extent does the current program meet the needs of our lowest-income individuals who by definition are disabled, blind, or elderly?

The 2007 Federal Benefit Rate of $623 (for an individual) is equal to about 73 percent of Federal Poverty Guidelines.

Approximately 36 percent of American families that received an SSI payment (or other cash public assistance) during 2005 lived below the poverty level. In single female parent families, 54 percent lived below the poverty level.⁸

These statistics, in combination with SSI countable resource limits that have remained unchanged for over 20 years, would indicate a gap between the current program payment rates and the "safety net" envisioned by Congress 35 years ago. However, an analysis of these statistics yields some relevant qualifiers:

SSI payment levels have historically approximated 70-75 percent of Federal Poverty Guidelines for an individual.⁹ This may indicate that the SSI program was not intended as a full income subsidy, in much the same way as a Social Security benefit was not designed to fully replace income received during a beneficiary's working years.

Many SSI recipients are also eligible for State Supplementary Payments.¹⁰ These supplementary payments, where available, can substantially increase the value of total monthly benefits. In 2007, for example, SSI recipients in California receive a combined monthly payment equal to just over 100 percent of Federal Poverty Guidelines for an individual.

SSI recipients are frequently eligible for additional Federal and State assistance, such as Food Stamps, Medicaid, and subsidized coverage under the new Medicare Part D prescription drug program.

While the question of sufficiency has been a subject of ongoing Agency and external review, it is nonetheless an important issue to revisit as the Congress, the Executive Branch, and SSA continue efforts to improve the SSI program. And while challenges are an inevitable part of any program as large and as situationally specific as SSI, modifications to the current program should be made with careful consideration of the effectiveness of existing SSI structure, as well as these challenges of the future.

The major findings in the 25-year projections prepared for this report are summarized below:

Following small declines in the SSI recipient population in the late 1990s due to the combined impact of Public Law 104-121 and Public Law 104-193, modest growth in the SSI rolls resumed in 2000, and is expected to continue throughout the projection period largely due to the growth in the U.S. population. By 2031, the Federal SSI recipient population is estimated to reach 9.2 million. Expressed as a percentage of the total U.S. population, the number of Federal SSI recipients is projected to increase slightly from 2.27 percent of the population in 2006 to 2.52 percent by 2031 due largely to the changing age distribution of the population.

Federal expenditures for SSI payments in calendar year 2007 are estimated to increase by $2.2 billion to $40.0 billion, an increase of 5.9 percent from 2006 levels. In constant 2007 dollars, SSI program outlays are projected to increase to $51.5 billion in 2031, a real increase of 1.2 percent per year.

When compared to the Gross Domestic Product (GDP), Federal SSI expenditures are projected to decline over time, from the current level of 0.29 percent of GDP in 2006 to 0.24 percent of GDP by 2031.

¹ Final rules regarding these changes were published on August 9, 2006 (71 FR 45375), based upon legislative changes made in sections 430, 435, and 436 of the Social Security Protection Act of 2004 (P.L. 108-203).

²The PASS rules are explained in section III(E), Incentives for Work and Opportunities for Rehabilitation.

³ Final rules regarding the PASS change were published on May 16, 2006 (71 FR 28262).

⁴ The PER process for initial SSI adult disability claims was established with the Deficit Reduction Act of 2005 (P.L. 109-171) which became law on February 8, 2006. SSI initial disability claims involving concurrent Social Security disability claims were already subject to PER.

⁵ The 40 percent review rate is effective for 2007. In 2008, at full phase in, the review rate becomes 50 percent—the same rate that is currently applicable for Social Security initial disability claims.

⁶ FY 2006 performance data is from SSA's Performance and Accountability Report, November 2006.

⁷ Granted through the Contract With America Advancement Act (P.L. 104-121), March 1996.

⁸"Poverty Status in the Past 12 Months of Families," 2005 American Community Survey, U.S. Census Bureau.

⁹ Couple rates have been slightly higher (just over 80 percent) as a percentage of Federal Poverty Guidelines.


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2007 Annual Report of the SSI Program