Reps. Petri and Tsongas Introduce Legislation to Promote Financial Independence Among Disabled Adults and Seniors

| | Comments (0) | TrackBacks (0)

Congressional Documents and Publications
June 3, 2011

Congressman Tom Petri (R-WI) has joined with Congresswoman Niki Tsongas (D-MA) to introduce bipartisan legislation to help low-income seniors and disabled adults who rely on the Supplemental Security Income (SSI) program eventually transition off of federal assistance. Current law requires seniors and disabled adults to spend down almost all their savings before they can receive SSI support for basic needs such as food, clothing, shelter, and other necessities, a policy which often makes them permanently reliant on the federal government.

"Too often government policy gets in the way of personal initiative," Petri said. "The asset limits and savings restrictions faced by many disabled Americans present a difficult choice between work and the loss of benefits. The SSI Savers Act would ease these restrictions and remove many of the disincentives that keep disabled citizens from greater participation in our economic life."

Tsongas noted that current law has not been updated since 1989, even though inflation has reduced the value of the dollar by almost half since then.

Because current asset limits are so restrictive, individuals are forced to spend down savings they may have before they are eligible for SSI assistance, leaving them with only $2,000 (or $3,000 for married couples) to help them through any emergencies and their entire retirement.

For young disabled adults capable of doing some work, these limits can discourage them from taking their first job. Since first jobs lead to second and third jobs, this initial hurdle can make the difference between a lifetime of government assistance and financial independence.

The SSI Savers Act increases asset limits in the Supplemental Security Income (SSI) program from $2,000 (individuals) and $3,000 (couples) to $5,000 and $7,500 respectively, and indexes those limits to inflation. For recipients younger than 65, the bill excludes retirement accounts and education savings accounts from counting against the limit. For recipients 65 and older, it allows retirement accounts to reduce SSI benefits instead of creating an immediate cut off.

Studies conducted by the Economic Mobility Project and the Urban Institute suggest that permitting modest savings not only reduces hunger and poverty among our most vulnerable seniors and disabled adults, but also reduces their dependence on the government over the long-run as they are able to gain the financial security necessary to transition off of assistance. As the Economic Mobility Project concluded, "reforming asset limits should, in time, reduce the number of families receiving assistance and shorten time spent on public assistance programs."

The Corporation for Enterprise Development (CFED) said in statement, "We applaud Congresswoman Tsongas and Congressman Petri will enable low-income people with disabilities to work, and save and build wealth. CFED, a national nonprofit working to expand economic opportunities for all Americans, appreciates any action that would allow asset-poor Americans the ability to build a nest-egg for themselves in times of emergency or to pay for an asset that would improve their financial self-reliance. Reforming the SSI asset limit test would help SSI recipients to rely less on government assistance and provide them a stepping stone towards financial security."

0 TrackBacks

Listed below are links to blogs that reference this entry: Reps. Petri and Tsongas Introduce Legislation to Promote Financial Independence Among Disabled Adults and Seniors.

TrackBack URL for this entry:

Leave a comment

About this Entry

This page contains a single entry by CFED published on June 7, 2011 4:15 PM.

Second-Mortgage Misery was the previous entry in this blog.

The American Dream Deferred; Restoring the Dream is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.