Bipartisan bill aims to update rules for federal benefits for elderly, disabled

A federal benefits program for blind, disabled and elderly individuals could get a long-overdue update if a proposal in Washington is approved.

Two Ohio senators — Democrat Sen. Sherrod Brown and Republican Sen. Rob Portman — have teamed up to introduce a bill to update the Supplemental Security Income program’s rules for how much money beneficiaries can have set aside. SSI was created by Congress in 1972.

The senators’ bill, called the SSI Savings Penalty Elimination Act, was introduced on Thursday.

SSI provides a maximum monthly benefit of $841 per individual or $1,261 for couples where both individuals are eligible for the program.

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However, some beneficiaries receive far less. The average monthly benefit for all recipients is currently $625.50.

Many people receiving these benefits are living under or close to the federal poverty level, which in 2022 is $13,590 in annual income for individuals.

SSI also comes with strict rules regarding income and assets for beneficiaries.

Brown and Portman’s bill seeks to update the asset limits, which would enable beneficiaries to have more savings in case of an emergency without affecting their benefits.

Currently, individuals getting SSI are limited to $2,000 in assets; for married couples it’s $3,000. The bill seeks to amend those caps, which have not been changed since 1989, to $10,000 and $20,000, respectively. The change would also help eliminate the marriage penalty for today’s beneficiaries, since the current asset limit for couples is not twice that for a single person.

The program’s limits on assets like savings make it “difficult for SSI beneficiaries and their families to achieve any measure of economic security,” a report from the J.P. Morgan Chase & Co. Policy Center states.

“It doesn’t make sense for SSI’s rules to punish Americans for saving for emergencies,” Sen. Brown said in a statement. “Our bipartisan bill would update the outdated rules for the first time in decades and allow beneficiaries to save for emergencies without putting the benefits they rely on to live at risk.”

The bill would also adjust thresholds annually for inflation, based on Consumer Price Index data, much like Social Security benefits.

The proposal follows a more expansive proposal put forth by Sen. Brown last year titled the SSI Restoration Act. That bill included changes that would have lifted the program’s income restrictions and brought monthly benefits to 100% of the federal poverty level and indexed them to inflation.

Updating the program’s rules around income from work could help improve beneficiaries’ standard of living, a report from the Urban Institute found.

Currently, beneficiaries can have up to $20 in unearned income per month, while their first $65 in earnings are exempt from the program’s rules. Beyond that threshold, SSI benefits are reduced by 50 cents for every dollar of income. Those thresholds have not been changed since 1972.

Brown and Portman’s proposal comes as Congress is poised to consider retirement legislation, known as Secure 2.0, which also includes other emergency savings measures.