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

Press Release

Today, U.S. Representatives Tom Petri (R-WI) and Niki Tsongas (D-MA), along with seven members of the House, introduced bipartisan legislation--the SSI Savers Act--to help low-income seniors and disabled individuals who rely on the Supplemental Security Income (SSI) program gain the financial independence to eventually transition off of federal assistance.

Current law requires seniors and the disabled to spend down almost all of 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," said Congressman Petri. "Currently, under SSI disabled Americans face a difficult choice between saving for future expenses and losing benefits. The SSI Savers Act would ease these restrictions, remove many of the disincentives that currently keep disabled citizens dependent on government benefits, and allow them to build their own savings."

"The SSI Savers Act fixes a flawed system that strips seniors and the disabled of savings they need to attain financial independence and forces them into permanent dependence on the government," said Congresswoman Tsongas. "Current law has not been updated since 1989, even though inflation has reduced the value of the dollar by almost half since then. Our legislation would sensibly update the savings and assets which seniors and disabled individuals can retain when they need the help of the SSI safety net. By encouraging greater savings among recipients and saving taxpayers money in the long term, this bill is a win-win."

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 recipients 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 $5,500 and $8,250 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."

Andrea Levere, President of the Corporation for Enterprise Development (CFED) said in a statement, "I applaud Congresswoman Tsongas and Congressman Petri for introducing the SSI Savers Act, legislation that will enable low-income people with disabilities to work, save, and build wealth. 44 percent of Americans have almost no savings at all, and poorly-informed policies like asset limits for SSI actively discourage families from saving and making long-term investments that help them achieve financial security. As a national nonprofit dedicated to expand economic opportunity for all families, we at CFED strongly support efforts to reform the SSI asset limits in order to empower families to achieve financial security. The SSI Savers Act will encourage savings and self-sufficiency for families and individuals throughout the country, and I hope that Congress will act quickly to pass this worthy legislation into law."

Petri and Tsongas also introduced H.R. 2470, the Making Work and Marriage Pay Act, on June 20, 2013. This bipartisan legislation would create a commission of lawmakers and policy experts to examine the disincentives to work and marriage that exist for low-income families due to the lack of coordination between federal, state, and local benefit programs and their respective phase-out schedules. The commission would be required to report to Congress with recommendations to address these issues.

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