The non-partisan Government Accountability Office (GAO) recently issued a report to the US senate’s Subcommittee on Social Security, Pensions, and Family Policy which highlighted how far we are from truly assisting SSI recipients who are looking to work their way out of poverty.
The report, based on records that go back to 2002 as well as some preliminary observations, provides evidence of some shockingly low work incentive usage. The hugely generous Student Earned Income Exclusion (SEIE), which will essentially protect the whole SSI check for a student working part-time, was used by less than $1.5% of transition aged youth (14-17 years of age) between 2012 and 2015. While those figures may well have increased in the past 6 years the fact remain that there was a lot of room for improvement.
With the SEIE in place for youngsters it may be less shocking that there is no record of any beneficiaries in the 14-17 age group using the Impairment Related Work Expenses (IRWE) work incentive. No more than 5 students a year engaged in the Plan to Achieve Self Support (PASS) although that may be understood in the context that the PASS is an arduous and long-term commitment to a particular work goal. One senses that there are few of us who were set on one defined career path as we dealt with the rigors of high school.
The statistics as presented show little cause for celebration for adult SSI beneficiaries, either. The report indicates that 59% of TTW participants were SSI-only beneficiaries (although a careful editing of the report may have made for a clearer reading of the finding) which shows some success. The percentage of beneficiaries who, 5 years after leaving TTW, had worked their way off SSI was double that of those who did not participate in TTW. Positive reading until it’s acknowledged that only 2% of non-TTW participants got off the SSI rolls. Further disappointment comes from the statistic, based on records for 2002 to 2018, that the average annual earnings of those who were working after TTW participation came in at $9,083 (significantly below the federal poverty rate). If that’s not bad enough, for the same period 57% of folks weren’t working at all.
The report does cite some reasons for the lack of success and there are few surprises. The basic work incentive of losing a dollar in SSI for two gained in work is not incentive enough; it’s all too complicated to understand what the rules are; and then there’s the very real fear of the overpayment (this issue gets its own section in the report, and it is not shy in stating that there are on-going failings that are yet to be addressed).
While there’s no plan laid out to rectify the poverty of work incentive usage the general recommendation that changes should be made so that work is seen as the sensible financial option rather than a risky venture is one that few of us would disagree with.
To read the highlights of the report you can go here: GAO-21-105419, SUPPLEMENTAL SECURITY INCOME: SSA Faces Ongoing Challenges with Work Incentives and Improper Payments