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Jun 3, 2011

Bill to Reform the Asset Limit Test of the Supplemental Security Income Program Introduced

Reform would enable people with disabilities to open bank accounts, work and save towards financial self-reliance

Washington, D.C. — Today, a bill that would enable and encourage low-income people with disabilities to work, save and build wealth, and open bank accounts was introduced in the U.S. House of Representatives. The Corporation for Enterprise Development (CFED), a national organization dedicated to expanding economic opportunities for all Americans, applauds this legislation.

People with disabilities face significant challenges to building wealth and achieving financial self-reliance. Nearly 50 million Americans have a disability and close to 60% of these are asset poor, meaning they have insufficient assets to survive at the poverty level for three months. This population of people is often dependent on public assistance; however, the asset limits of these programs pose serious obstacles for low-income families trying to become self-reliant.

This is particularly true for recipients of the Supplemental Security Income (SSI) program, where eligibility is limited to those who have no more than $2,000 in assets for an individual and $3,000 for a couple. If they have an emergency—a family member dies, a car breaks down, a roof needs repair—they are allowed little in savings to fall back on, leaving them vulnerable to predatory lenders and deeper poverty, and requiring them to ultimately rely on greater government assistance. These outdated rules pose as a serious obstacle to becoming financial self-reliant.

The SSI Savers Act of 2011 (H.R. 2103), introduced by Congressman Tom Petri (R-WI) and Congresswoman Tsongas (D-MA), will reform the asset limit test of the Supplemental Security Income program. H.R. 2103 would help people with disabilities on SSI by reducing disincentives and allowing recipients to build a financial cushion while retaining their benefits.

The SSI Savers Act of 2011 proposes the following:

• Increase asset limits from $2,000 (single) and $3,000 (married) to $5,000 and $7,500 respectively, and indexes those limits to inflation.
• For recipients younger than 65, the bill excludes retirement accounts, education savings, and individual development accounts from counting against the limit.
• For recipients 65 and older, it allows retirement accounts up to $50,000 (single) / $75,000 (married) to reduce SSI benefits accordingly instead of creating an immediate cut off.

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CFED expands economic opportunity by helping Americans start and grow businesses, go to college, own a home and save for their children’s and own economic futures. We identify promising ideas, test and refine them in communities to find out what works, craft policies and products to help good ideas reach scale, and develop partnerships to promote lasting change. We bring together community practice, public policy and private markets in new and effective ways to achieve greater economic impact.

Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.