Tom Margenau

I was playing one of my morning online word puzzles when up popped a little blurb from a senior citizen advocacy group announcing that the Supplemental Security Income program has recently turned 50 years old.

I’m sure most people who see a reference to SSI would say something like “Supplemental Security what?” And that’s because SSI is not very well known to most people. And as I’ve pointed out umpteen times, a lot of folks probably just figure, given its name, that Supplemental Security Income is some kind of supplemental Social Security benefit. It is not.

So, I guess it’s time to dust off and update some of the columns I’ve written in the past that explain the SSI program.

To begin with, here is just a short history lesson. Back before the early 1970s, there were hundreds of different welfare programs in the country. Sometimes states administered welfare programs. Other times, counties had their own welfare programs. And in some places, cities or other jurisdictions had their own welfare programs. It was a mess.

Some officials in the Nixon administration had a good idea. They decided to federalize and standardize this hodgepodge of welfare programs into one national program.

But then they had two bad ideas.

The first bad idea: They gave this new program to the Social Security Administration to run. On the one hand, I suppose it made sense. The SSA had a network of field offices around the country, and it had the computer infrastructure necessary to manage a big national government benefits program. On the other hand, they messed up a nice, clean government operation used to dealing mostly with grandpas and grandmas and saddled it with the task of running a big, messy welfare system.

And their second bad idea was the name. Some people somewhere in the Nixon administration decided to call the new program Supplemental Security Income. I understand what they were trying to do. They wanted to remove the negative connotations of the word “welfare” from the minds of potential program beneficiaries. But this act of political correctness has led to problems ever since.

On a related side note, I remember the beginning days of the program when the government was first introducing it to American citizens. Social Security Administration employees (like me) were absolutely forbidden to use the word “welfare” when explaining SSI to people. The closest we could come to being open and honest with them was to say it was a “needs-based program.” I recall many an interview with potential applicants (usually older and poor men and women) who would look at me blankly when I used the term “needs-based.” So, I’d then kind of whisper to them and say, “I’m not supposed to tell you this, but it’s a welfare program.” Then I’d see some degree of recognition in their face. Despite its connotation, people at least know what “welfare” is. They don’t know what “needs-based” means.

Anyway, they called the new program Supplemental Security Income, and they gave the program to the Social Security Administration to run. And almost everyone back then in the 1970s, and almost everyone still today, thinks that Supplemental Security Income is some kind of supplemental Social Security benefit.

But as I said, it’s not. SSI is a federal welfare program that has absolutely nothing to do with Social Security other than the fact that it happens to be managed by the Social Security Administration. SSI payments are funded out of general tax revenues — NOT Social Security taxes.

Gosh, how I wish they would have called SSI something like the Federal Welfare Program. And gosh, how I wish they would have created a new federal agency to run it and called it something like the Federal Welfare Benefits Administration. OK, I got that off my chest! Now, let me explain how SSI works.

In a nutshell, it does just what its name says. It “supplements” someone’s “income” to give that person some degree of financial “security.”

To qualify for benefits, you must be 65 or older, or you must be disabled. (That latter category includes disabled children.) And most importantly, you must have limited assets and income. These income and asset rules are WAY more complicated than I will be able to explain in a short column. But here they are in a very general sense.

The asset limit is $2,000 for one person or $3,000 for a couple. Assets include cash, bank accounts, personal property, etc. Essentially, anything you could readily convert to cash and use to pay for food and shelter. (Usually, the value of your home and car don’t count toward these limits.)

The income rules are a little messier. The basic federal SSI payment is $841 per month. Some states add more money to that federal payment, so the SSI benefit could be higher where you live.

So, the SSI program supplements your income up to that federal or combined federal and state income level. For the following example, I’ll just use the federal payment of $841.

Let’s say 72-year-old Myra gets a Social Security widow’s benefit of $750 per month, and that is her only income. She owns her home and has a few hundred dollars in the bank. If she applies for SSI, her $750 Social Security check would be supplemented up to $841 — meaning she would get $91 per month in SSI benefits. But there is a little twist that says the first $20 per month of income she has doesn’t count toward the SSI limit. That means they would only apply $730 against the SSI threshold. So, she would actually end up getting $111 per month in SSI benefits.

That was a very simple example of the rules for an extremely messy welfare program. For example, there are different payment levels for people who live in someone else’s household and who don’t pay any rent. And there are also complicated rules about “deeming” income and resources from other family members.

Anyway, happy birthday to a messy and misunderstood government program!

If you have a Social Security question, Tom Margenau has two books with all the answers. One is called “Social Security — Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security.” The other is “Social Security: 100 Myths and 100 Facts.” You can find the books at Amazon.com or other book outlets.

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