2014 Annual Report of the SSI Program

II. Highlights

The SSI program is a nationwide Federal assistance program administered by SSA that guarantees a minimum level of income for aged, blind, or disabled individuals. This section presents highlights of recent SSI program experience, a summary of important changes to the program in the last year, a discussion of current issues facing the SSI program, and a summary of the key results from the 25-year projections.

A. Recent Program Experience

SSI program experience during the past year included the following:

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During calendar year 2013, 2.1 million individuals applied for SSI benefits based on blindness or disability, a decrease of 10 percent from 2012. Additionally, 148 thousand individuals applied for SSI benefits based on age, an increase of 1 percent as compared to the 147 thousand who applied in 2012. In 2013, 918 thousand applicants became new recipients of SSI benefits, a decrease of 6 percent as compared to the 973 thousand who became new recipients in 2012.

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Each month on average during calendar year 2013, 8.1 million individuals received Federal SSI benefits. This group was composed of 1.1 million aged recipients and 7.0 million blind or disabled recipients, of which 65 thousand were blind. Of these 7.0 million blind or disabled recipients, 1.3 million were under age 18, and 0.9 million were aged 65 or older. During the year, 9.1 million aged, blind, or disabled individuals received at least 1 month’s Federal SSI benefit.

•	Federal expenditures for payments under the SSI program in calendar year 2013 totaled $53.4 billion, up from $51.7 billion in 2012.

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Each month on average during calendar year 2013, 2.2 million individuals received federally administered State supplementation payments. This group was composed of 0.5 million aged recipients, 1.7 million disabled recipients, and fewer than 50 thousand blind recipients. During calendar year 2013, 2.5 million individuals received at least 1 month’s federally administered State supplementation payment.

•	The recent decline in State expenditures for federally administered supplements, excluding fees for administration, slowed down considerably in 2013 with State expenditures remaining at $3.3 billion, roughly the same level as in 2012.

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The percentage of SSI recipients receiving their benefits electronically increased from 83 percent in fiscal year 2012 to 94 percent in fiscal year 2013. SSI recipient participation in direct deposit increased gradually in the 2000’s after experiencing a period of sharp growth when it more than doubled from 24 percent in 1995 to 49 percent in 2000. Electronic receipt of benefits again increased significantly in 2013 and is expected to continue to increase somewhat in the next year as most SSI recipients must receive their benefit payments by direct deposit, the Direct Express® debit card, or an electronic transfer account.

•	The cost of administering the SSI program in fiscal year 2013 was $3.8 billion, which was roughly 7 percent of total federally administered SSI expenditures.

•	In January 2014, 8.4 million individuals received federally administered monthly SSI benefits averaging $535. Of these, 8.1 million received monthly Federal SSI payments averaging $516, and 2.2 million received monthly State supplementation payments averaging $122.

B. SSI Legislation Since The 2013 Annual Report

Since we submitted the 2013 Annual Report of the Supplemental Security Income Program to the President and Congress on June 20, 2013, there have been no legislative changes made to the SSI program.

C. Current Issues Facing The SSI Program

With this edition of the SSI Annual Report, we recognize the 40th anniversary of the SSI program, acknowledging the enduring legacy of a nationwide cash assistance plan that has meant the difference between poverty and security for millions of Americans. When President Richard Nixon signed the SSI program into law on October 30, 1972, he effectively replaced a variety of State programs providing varying levels of income support for the aged, blind, and disabled, with a national system that provided means‑tested, standardized cash payments. Upon SSI’s implementation in January 1974, these most vulnerable individuals found themselves for the first time on equal footing—eligible for the same means-tested benefit based upon the same qualifications, regardless of the State in which they lived.

Today, more than four decades later, the SSI program continues to provide a safety net for the neediest of aged, blind, and disabled Americans. These individuals frequently have nowhere else to turn, and rely on the cash assistance provided by SSI for their basic needs of food, clothing, and shelter. Because the program plays such a crucial role in the lives of over 8 million Americans, we have an ongoing obligation to promote its effective administration and to ensure SSI payments are paid accurately to the right person at the right time.

Program Integrity Work

SSI is funded from general revenues. SSA is committed to protecting taxpayer dollars, and we strive to maintain the public’s trust by ensuring effective stewardship of program dollars and administrative resources. This work involves our efforts to prevent improper payments – including both overpayments and underpayments – at all stages of program administration, from the initial application to the assessment of continuing eligibility, and when improper payments are made, to correct or recover them as soon as possible.

As SSI is a means-tested program, individuals must have income and resources (i.e., assets) below specified levels to be eligible for benefits. Accordingly, we need to be able to determine the income and resources of recipients on an ongoing basis. Our vital program integrity work supplements recipients’ reports of changing circumstances, helping ensure that only those persons eligible for benefits continue to receive them.

One of our most valuable tools used to accomplish this goal is the SSI redetermination process. During the redetermination, we review all the nonmedical criteria for eligibility, including living arrangements, and income and asset levels. In fiscal year 2013, we completed 2.6 million redeterminations. We use a statistical model to select many of the cases that are reviewed, selecting those that are most likely to have undergone a change in circumstances potentially affecting eligibility or payment amount.

In our efforts to accurately pay benefits, we also conduct continuing disability reviews (CDR). CDRs are periodic reviews of a recipient’s medical impairment to determine if he or she is still disabled according to agency rules. We conduct two types of reviews as part of the CDR process: full medical reviews and mailers. A full medical CDR requires a medical evaluation and disability determination by our disability determination services (DDS) examiners. Generally, the cases with the highest likelihood of medical improvement receive a full medical review, whereas, the remaining cases due for review receive a mailer requesting updates on their impairments, medical treatment, and work activities. In fiscal year 2013, we completed 429,000 full medical CDRs.¹

Advances in Program Integrity Methods

As we review recipient eligibility, we rely on emerging technology to support our efforts. For example, the Access to Financial Institutions (AFI) initiative is one of our most useful tools to detect improper payments caused by excess resources held in financial accounts. AFI is an alternative to the traditional SSI asset verification practices of beneficiary self-reporting and direct contact with financial institutions. We use AFI to identify excess resources in bank accounts of SSI applicants and recipients by electronically checking for known and potentially unreported accounts directly with the financial institution. This process has proven very cost effective and useful in identifying undisclosed accounts. Currently, we use AFI in processing SSI initial claims and redeterminations in all 50 States, the District of Columbia, and the Commonwealth of the Northern Mariana Islands.

Another very important tool we use to reduce improper payments is the SSI Telephone Wage Reporting System (SSITWR). SSITWR is an automated, toll-free telephone number that allows beneficiaries, deemors (i.e., spouses or parents whose income and resources are considered in determining SSI eligibility and payment amount), and representative payees to report wages by calling in and using either voice‑recognition or touch-tone software. This system automatically enters the wage data into the SSI system, which eliminates the need to enter a manual report. These telephone reports generally are accurate and require no additional evidence, which saves time in our field offices. SSITWR has allowed us to process more wage reports automatically, thereby reducing wage-related errors.

In addition to continuing to expand the use of SSITWR, SSA has introduced an alternative for individuals to make monthly wage reports through an Android or iPhone smartphone application. This alternate method of wage reporting will help reduce delays in posting of a recipient’s income change to our systems. We expect new tools such as these for wage reporting will help reduce improper SSI payments.

Program Complexity

Another area of the SSI program requiring thoughtful attention is program complexity. The process of evaluating eligibility and payment levels on an ongoing basis and addressing the accuracy of payments both contribute to the complexity of the SSI program. Income and living arrangements, for example, are two of the factors used to determine an individual’s monthly benefit. Income can be in cash or in kind, and is usually anything that a person receives that can be used to obtain food or shelter. It includes cash income such as wages, Social Security benefits, pensions, and unemployment compensation. In-kind income is food and shelter or something someone can use to obtain those items. Generally, the amount of the cash income or the value of the in-kind income is deducted from the Federal benefit rate, which is currently $721 a month. Additional rules regarding the consideration of earned income, unearned income, and calculation of payments amounts further complicate this picture.

An individual’s living arrangement also affects his or her monthly benefit. For instance, when an individual moves into a nursing home, the person’s monthly payment may be reduced to as little as $30 per month. If the person moves from his or her own household into the household of another person, and that person provides food or shelter, the payment also may be reduced.

In another example of SSI program complexity, the value of an individual’s resources also affects eligibility for the program. An individual is not eligible for benefits if his or her countable resources exceed $2,000, and couples are not eligible if their countable resources exceed $3,000. In general, we count as resources items individuals can convert to cash and use for their support and maintenance, such as bank accounts, stocks, and bonds. Congress has amended the Act many times to add new resource exclusions, further increasing the complexity of the program. In short, the many factors SSA must evaluate in determining eligibility and payment amounts result in a program that is especially complicated to explain and labor-intensive to manage.

Conclusion

More than 40 years after its implementation, the SSI program continues to provide support for millions of vulnerable Americans. However, the program faces challenges related to its requirement to respond to changing circumstances of beneficiaries. Fluctuations in either income or resources may affect eligibility or payment amounts. And while the SSI program was never simple, it has become increasingly complex over the years. Some of these complexities stem from the way SSI payments are calculated, which is defined by statute, while others are related to administrative rules we use to determine program eligibility. Although we continue to make positive strides in improving the administration of the SSI program, legislators and program administrators will be pressed to find ways to reduce this complexity. Our goal remains consistent: to pay the right person the right benefit at the right time, and we will use every tool at our disposal to ensure that SSI payments are accurate. Moving forward, we will continue to search for ways to simplify the SSI program and to pursue technological improvements, resulting in a program that is easier for the public to understand, more efficient for us to administer, and continues to provide support to vulnerable Americans.

D. Key Results From The 25-Year Projections

The major findings in the 25-year projections prepared for this report are:

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Following small declines in the SSI recipient population in the late 1990s due to the combined impact of Public Law 104-121 (the Contract With America Advancement Act of 1996) and Public Law 104-193 (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), modest growth in the SSI rolls resumed in 2000. The economic recession that began in late 2007 led to faster growth in the SSI recipient population in recent years. We expect a somewhat higher level of growth to continue for a few years due to the still-elevated unemployment rates during the remainder of the recovery from the recent economic downturn. That brief period of elevated growth is projected to be followed by a return to more modest growth throughout the remainder of the projection period at a rate somewhat slower than the rate of growth in the U.S. population. By 2038, we estimate that the Federal SSI recipient population will reach 9.2 million. As a percentage of the total U.S. population, we project the number of Federal SSI recipients to decrease very gradually from 2.52 in 2013 to 2.35 percent of the population by 2038.

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We estimate that Federal expenditures for SSI payments in calendar year 2014 will increase by $1.2 billion to $54.6 billion, an increase of 2.3 percent from 2013 levels. In dollars adjusted by the Consumer Price Index to 2014 levels, we pro­ject that SSI program outlays will increase to $61.2 billion in 2038, a real increase of 0.5 percent per year.

•	Federal SSI expenditures were 0.32 percent of Gross Domestic Product (GDP) in 2013. We project that such expenditures will decrease to 0.31 percent of GDP in 2014, and continue to decline thereafter to 0.22 percent of GDP by 2038.

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1

This figure is the total number of full medical CDRs completed in fiscal year 2013, including cases involving SSI and/or Old-Age, Survivors, and Disability Insurance. In each of the past 10 years, full medical CDRs involving SSI recipients have represented over 60 percent of the total number of full medical CDRs processed.