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 eligibility 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 recipients and expenditures.
This section includes projections of program recipients and expenditures under the SSI program for a period of 25 years. 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 for selected age groups.
The estimates of program recipients and Federal expenditures presented in this section have been prepared using the intermediate demographic and economic projections developed for the
2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance (OASDI) Trust Funds.2 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. A detailed discussion of these demographic and economic projections is presented in sections
V.A and
V.B of the Trustees Report.
4 An important feature of the intermediate assumptions for the 2010 Trustees Report is a continuation of the recent economic downturn, with a return to a sustainable path for the economy over the following several years. As explained later in this section, the economic recession appears to have generated an increase in applications for SSI disability benefits and a consequent increase in projected SSI expenditures, although this temporary increase is expected to subside as the economy recovers.
The key parameters utilized for the estimates 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 recipient projections discussed in the next section. 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.
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 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. It is worth noting that the benefit rate increases for January 1, 2010 and January 1, 2011 are both shown in table
IV.A2 as 0.0 percent. These figures are consistent with the underlying assumption that the CPI in 2010 will be below the actual level achieved in the third quarter of 2008 and will not rise above that 2008 level until the second quarter of 2011.
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.
