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 2016 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.1 SSI payments are offset for receipt of some other sources of income, including Social Security benefits. SSI projections in this report assume all scheduled Social Security benefits will be paid in full and on time. However, under the intermediate set of assumptions in the 2016 Trustees Report, the Trustees project that the asset reserves of the Disability Insurance (DI) and Old-Age and Survivors Insurance (OASI) Trust Funds will become depleted in 2023 and 2035, respectively. If the law is not altered, the trust funds would not be able to pay all scheduled benefits in full on time once asset reserves are depleted. Because DI and OASI benefit receipt affect SSI program eligibility and payment amounts, trust fund reserve depletion has the potential to increase cost for the SSI program.
We first present the most relevant demographic and economic projections from the 2016 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 payments 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.
4 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 2016 Trustees Report is the continued 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 SSI expenditures. We expect the number of applications to decline in 2016 (as it has since peaking in 2010) and generally increase thereafter, slightly slower than the growth in the potentially eligible population. The following two tables summarize two key parameters underlying the estimates in this report. Table
IV.A1 presents population projections by age subgroups that are consistent with the projected SSI recipients by age group presented 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 a cost-of-living adjustment (COLA).
5 This COLA is identical to the
COLA 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.
