Statement of David A. Rust
Acting Deputy Commissioner for Disability and Income Security Programs
Social Security Administration

Testimony before the House Committee on Ways and Means,
Subcommittees on Select Revenue Measures and
Income Security and Family Support

October 17, 2007

Mr. Chairmen and Members of the Subcommittees:

On behalf of Commissioner Astrue, thank you for inviting me to discuss proposed changes in the Supplemental Security Income (SSI) program. I am David Rust, and I serve as Executive Secretary of the Agency and, since early August, as the Acting Deputy Commissioner for Disability and Income Security Programs. My responsibilities include oversight and coordination of policy and operational issues for both the SSI and the Old Age, Survivors, and Disability Insurance (OASDI) programs. In this role I have an obligation to make these programs as effective as possible, and a great interest in proposals that would help achieve that end. So I am pleased to offer the Social Security Administration's (SSA's) views on several SSI-related proposals contained in the Chairman's draft bill.


Before turning to the specific proposals contained in this bill, I would like to take a minute to provide some helpful background information. SSA has been administering the SSI program for more than 30 years – dealing with a program in which eligibility and the amount of needs-based benefits is dependent upon the fluctuating circumstances of millions of beneficiaries. Complex income rules, designed to more favorably consider earned wages than unearned payments, mean that SSA must evaluate the source of every dollar. Resource limits, likewise, mean that a beneficiary who is eligible for payments one month may not be the next.

If it sounds complicated, that's because it is. Means-tested programs such as SSI have to balance the stewardship requirements of protecting taxpayers, while insuring fair treatment for beneficiaries, with the administrative need to design programs that are manageable. It is quite a challenge for SSA and the Congress, both of which have studied SSI simplification and equity issues for years.

Over the years, Congress has pursued incremental changes to SSI law, finding ways in which equity can be improved and policy can be streamlined within the basic structure of the program. It is in this context that we can best evaluate the SSI-related provisions of this legislation, and I am pleased to say that we support two of the proposals without reservation, as they have in fact been previously transmitted to Congress by SSA in Administration bills.

Treatment of Most Military Compensation as Wages

Turning to the first proposal, this provision would treat most military compensation as wages for SSI, and codify SSA's policy of treating certain housing allowances as “in-kind” income. We believe this legislation is very important.

The provision would remove a significant inequity in the consideration of household income, and is especially needed in light of those who are most often affected by the current policy – the disabled children of our Nation's service men and women.

Under current SSI law, generally only basic pay is counted as earned income. All other allowances – housing, uniform, special duty pay, and so on – are counted as unearned income. Because of SSI's provisions supporting beneficiary efforts to work, earned income is treated differently than unearned income in determining benefit eligibility and payment level.

Generally, all unearned income above $20 is used in these calculations. But in determining eligibility and calculating benefits, we do not count the first $65 of earned income and one-half of income above the $65 amount. When a child is disabled, we determine eligibility based on family income, using the same distinction between earned and unearned income. Current law requires us to treat all payments except for basic pay as unearned income. (Combat pay is disregarded altogether.)

This distinction between consideration of military basic pay and other pay types has had the effect of disadvantaging military personnel compared to civilians in similar situations.

Let's look at the differences in the way income would be treated in two similarly situated families:

The family of an active duty service member could be receiving basic pay of $1,459 per month, and a military housing allowance of $1,087 – a total of $2,546. The housing allowance portion is counted as unearned income. Because of the less-favorable treatment of unearned income for SSI purposes, in calculating SSI eligibility for a disabled child, we would “count” $519.

But a civilian with the same total income of $2,546 would receive all income through wages (earned income) and would pay rent via a portion of the wages. Thus we would count $141 of the civilian's wages in determining SSI eligibility for the disabled child. Assuming there is no other income to either family, the disabled child in the civilian family would receive $502 in SSI benefits, while the disabled child in the military family would only receive only $124.

The proposal contained in the HEART bill would result in treating most cash military compensation and civilian wages alike (for SSI purposes), thus eliminating this present unfair treatment of military compensation other than basic pay.

We also support placing into statute the current SSA policy regarding how we consider certain privatized military housing. In the SSI program, certain privatized military housing is generally considered “in-kind support and maintenance,” and is treated differently than either earned or unearned income. Since March of 2003, we have capped the amount of SSI benefit reduction attributable to the housing allowance to one-third of the SSI Federal benefit rate. This approach to the housing allowances is appropriate because in these situations the full amount of the service member's allowance is deducted directly from his or her pay, and paid to the landlord of the privatized housing by military payroll. By codifying this policy into the statute, Congress affirms the importance of eliminating inequities in the SSI program.

Exclusion of AmeriCorps Payments for SSI

Turning to the second proposal, we also support legislation that would exclude the AmeriCorps State and National and AmeriCorps National Civilian Community Corps program payments for purposes of determining SSI eligibility and benefit amounts.

Stipends for AmeriCorps VISTA volunteers are currently excluded from income for SSI purposes under the 1973 authorization for this program, the Domestic Volunteer Service Act. However, authorizing legislation for the newer AmeriCorps programs, does not exclude stipends for SSI purposes. These payments are counted as earnings in the SSI program, and room and board provided under the new programs is counted as in-kind support and maintenance. The earnings received based on these newer AmeriCorps programs are also taxable, and earn Social Security (OASDI) quarters of coverage. All three AmeriCorps programs have similar missions, and volunteers in these programs that receive a living allowance can receive a separate educational award upon completion of public service.

Thus, we currently have individuals performing similar volunteer work and participating in similar programs who are being treated differently. SSA supports the proposed legislation. Expanding the earning exclusions to participants in the other two programs would provide equity for our beneficiaries, administrative simplification, and presumably enable AmeriCorps to enroll more participants with disabilities.

Exclusion of Certain Annuity Payments to Blind Veterans

Like all Americans, we recognize the great debt owed to the men and women, who have sacrificed for us as members of the armed services, and the third proposal to exclude State annuity payments to blind veterans from income consideration for SSI benefits, could serve as a means to recognize that sacrifice. An exclusion of State annuity payments for veterans who, by definition, are blind and also of limited means, may be reasonable and appropriate.


In conclusion, the AmeriCorp and Military Service Income proposals correct inequities that exist in current SSI and law, and the Blind Pension exclusion could provide humanitarian assistance to those who have served our country so well.

We would be happy to work with the Subcommittees on these proposals, and SSA looks forward to continuing to work with Congress in our ongoing efforts to promote sound public policy and improve program administration.

Thank you and I will be glad to answer any questions you may have.