House Budget Cuts Impact SSI; Minimum Savings With Maximum Pain

The House Committee on Ways and Means voted last week along strict party lines on its portion of the budget reconciliation bill currently working its way through the House.

The House Committee on Ways and Means voted last week along strict party lines on its portion of the budget reconciliation bill currently working its way through the House. The version approved by the Committee includes a provision that would require installment payment of back benefits in the Supplemental Security Income (SSI) program when more than three months of back benefits are owed. Current law requires installment payment whenever the back benefit is equal to or greater than 12 times the SSI benefit rate. The change would greatly increase the number of people to whom the installment payment requirement would apply. The primary impact of this will be on people applying for SSI on the basis of disability who must wait an extended period of time for their first check while the claim is processed through the Social Security Administration’s lengthy disability determination process. However, it will also affect those who are owed money because their benefits were suspended and the suspension was later determined to be improper.

The purpose of the change supposedly is to save money. However, very little, if any, money is likely to be saved. There are two possible ways in which money might be saved through this process. One is a gimmick and the other is tragic. Some money will be "saved" by simply shifting spending from one fiscal year to the next. The remaining money will be saved when individuals die before they receive their last installment since SSI payments, unlike Social Security payments, are not payable to an individual’s estate.

While the savings may be dubious, the harm to individuals is clear. These are people who have often had no income at all while waiting for their benefits and who invariably have significant deferred needs and often have debts to family and friends who have helped out while they waited for their first SSI check. While there is a right to request an increase in the first and second installments if the individual is able to document outstanding debts for food, shelter or certain necessary medical expenses, few will be likely to know about this procedure and fewer still will be able to provide the necessary documentation. However, it is possible that if enough people learn about the right to request an increase in the first installments, the result could be an increase in administrative costs sufficient to completely offset whatever meager savings might otherwise result.

For further information contact Gerald McIntyre in the NSCLC Los Angeles office.