Prevalence, Characteristics, and Poverty Status of Supplemental Security Income Multirecipients

Introduction

Since 1974, the Supplemental Security Income (SSI) program has provided income of last resort to the aged, blind, and disabled, and in December 2011, the program served 8.1 million recipients (SSA 2012a). This article examines the characteristics of SSI recipients who lived with at least one other recipient who was not an eligible spouse, in both the narrower family context and the broader household context.¹ The analysis starts by focusing on SSI families because the Census Bureau uses the family unit to generate official poverty estimates. In the family-level analysis, recipients who lived with at least one other related recipient are called “noncouple multirecipients” (NCMs). I then analyze the household unit to consider the full scope of recipients who reside with other recipients and the economies of scale they benefit from within their larger households. SSI recipients who shared their larger households with related or unrelated recipients are simply called “multirecipients.”

The analysis is based on matched Social Security Administration (SSA) and Current Population Survey (CPS) data for calendar year 2005.² With those data, I examine the personal, family, household, demographic, and economic circumstances of recipients living with other recipients and compare them with those of all other recipients. This article addresses four research questions:

1. How prevalent were NCMs in the SSI population and what proportion of them were children?
2. What was the family composition of NCMs?
3. How did the poverty status of NCMs compare with that of other SSI subgroups?
4. What proportion of the SSI population belonged to multirecipient households and what were their characteristics?

The article concludes with a summary of key research findings and their implications.

Program Overview

In 1972, Congress passed legislation creating the SSI program to ensure a minimum income for the aged, blind, and disabled to help them meet their basic food, clothing, and shelter needs. A person must meet three criteria to qualify for SSI payments. He or she must (1) be at least 65 years of age, disabled, or blind; (2) have countable resources at or below a legislated threshold; and (3) have countable income (including deemed income)³ that is lower than the SSI federal benefit rate (FBR).

Federal Benefit Rate

Adjusted annually according to cost-of-living increases, the FBR is the maximum possible federal SSI payment amount. SSA uses one FBR to compute payments for individuals and another FBR for couples. In both cases, SSA considers the recipient's total countable earned and unearned income to determine the final payment amount.⁴ If a recipient lives with a spouse who also qualifies for SSI payments, their payment amount is based on the FBR for a couple, which equals 150 percent of the individual FBR.⁵ In effect, each eligible spouse's share of SSI benefits is 75 percent of the individual FBR.⁶ For 2005, I estimate that 5.9 percent of SSI recipients received payments based on the couple FBR while the remaining 94.1 percent received payments based on the individual FBR.

By law, SSI payment rates for individuals and couples differ because their economies of scale are assumed to differ. Specifically, the couple FBR is based on the premise that two eligible spouses residing within one household require less income to meet their needs than two individuals who live independently (Koenig and Rupp 2003/2004). By contrast, no economies of scale are assumed to arise among nonmarried SSI recipients sharing a household. Thus, two eligible spouses living together receive a payment based on the couple FBR (equal to 150 percent of the individual FBR), while the payment for two nonmarried recipients residing together is based on an amount equal to 200 percent of the individual FBR. The reason the lower FBR does not apply to noncouple recipients living together is that they may not share household expenses if they are unrelated, or the sharing may vary substantially over time, especially in transient households.

SSI Family Residency Groups

For the family-level analysis of the SSI population, I define “individuals” as those who receive payments based on the individual FBR as the sole SSI recipient in their families. Those classified as “NCMs” live in families that include two or more SSI recipients, all of whom receive payments based on the individual FBR (that is, none are an eligible spouse). Examples of NCMs include, but are not limited to, a child recipient living with a brother and a sister who also draw SSI payments; a single-mother recipient whose daughter also receives SSI; and a single man on SSI who resides with his grandmother, who is also on the SSI rolls. The group classified as “couples” comprises SSI recipients who receive payments based on the couple FBR. In sum, we divide SSI recipients into three family residency groups: individuals, NCMs, and couples. Recipients belonging to any one of these groups may also live with nonrecipients, who are presumably ineligible for SSI. The following tabulation shows the 2005 populations for each group, along with the child-adult breakdown.

Findings

This section addresses each of the four research questions in turn.

Research Question 1

How Prevalent Were NCMs and What Proportion Were Children? In 2005, 15.7 percent of SSI recipients were NCMs (Chart 1). Adult NCMs (aged 18 or older) represented 11.3 percent of SSI recipients and child NCMs (aged 17 or younger) represented 4.4 percent of SSI recipients. Although adult NCMs were a larger percentage of the overall SSI population, child recipients were more than twice as likely as adult recipients to be NCMs (32.5 percent versus 13.0 percent).

Charts 2 and 3 illustrate the age distributions of NCMs and of individuals and couples, respectively. Children constituted 28.0 percent of NCMs and only 10.8 percent of individuals and couples. The average age of NCMs was 38, 10 years younger than the average for individuals and couples (not shown).

Research Question 2

What Was the Family Composition of NCMs? In this analysis, “family composition” reflects several overlapping characteristics: the number of SSI recipients in the family (two, three, or four or more); whether the family includes any nonrecipients; and whether the family's recipients comprise only children, only adults, or both. The tabulation below shows the population estimates for each NCM characteristic.

Chart 4 illustrates the distribution of NCMs by the number of SSI recipients and the presence (or absence) of nonrecipients in their families. More than three-quarters (76.5 percent) of NCMs resided in families with two recipients. Only 6.2 percent belonged to families with four or more recipients; that group constituted less than 1 percent of the entire 2005 SSI population. The remaining 17.3 percent of NCMs had three recipients in their families. The shares of NCMs who lived exclusively with other recipients sum to 31.7 percent. The largest single group, making up more than one-half of NCMs (53.8 percent), consisted of those in families with only two recipients and at least one nonrecipient.

Chart 5 shows the distribution of NCMs by number of recipients in the family and age. It illustrates that children were more likely to belong to families with four or more recipients than adults were (8.5 percent versus 5.3 percent). Nearly the same proportions of child and adult NCMs belonged to families with two recipients (about 76 percent).

Chart 6 combines the family composition characteristics. It shows the distributions of NCMs among all-child, all-adult, and mixed-age family recipient status, with breakdowns by NCM age group, family recipient count, and presence of nonrecipients in the family. Overall, NCMs were most likely to belong to families with recipients who were all adults and were least likely to live with recipients who were all children (54.7 percent versus 12.8 percent). The remaining 32.5 percent of NCMs had both child and adult recipient family members.

Chart 6 reveals three additional key findings. First, NCMs belonging to recipient-only families were most likely to be adults: 78.0 percent of NCMs belonging to recipient-only families had only adult recipients in their families, while only 43.9 percent of NCMs with at least one nonrecipient lived in a family in which all recipients were adults. Second, child NCMs were less likely to live with other recipients who were all children (45.5 percent) than adult NCMs were to live with other recipients who were all adults (76.1 percent). Third, as family recipient counts increased, NCMs were less likely to reside with recipients who were all adults. Instead, they were more likely to belong to families with both child and adult recipients.

Research Question 3

How Did the Poverty Status of NCMs Compare With That of Other SSI Subgroups? I used matched SSA and CPS data along with the Census Bureau's official poverty measure to evaluate the economic well-being of SSI recipients.⁷ In considering the findings, one should be mindful of certain SSI program effects on recipient poverty status. If individuals or couples have SSI as their only source of income while belonging to a recipient-only family, they will be poor because the SSI annualized FBR for individuals and couples is less than the annual poverty thresholds applicable to one- and two-person families, respectively.⁸ By contrast, if NCMs live with other recipients only, they will not be classified as poor. That is because the SSI program assumes no economies of scale among nonmarried individuals living together and the FBR is the same for each additional family recipient, but the Census Bureau assumes greater economies of scale with each additional family member and reduces the incremental increase in family poverty thresholds accordingly. Therefore, all of the individual federal benefits paid to NCMs belonging to a recipient-only family will exceed the poverty threshold applicable to their family.

Baseline SSI Poverty Rates. In 2005, an estimated 41.9 percent of SSI recipients lived in poverty (Chart 7).⁹ NCMs had a poverty rate of 19.8 percent, while more than 45 percent of individual and couple recipients were poor. Child recipients had a poverty rate of about 29 percent whether they were individual recipients or NCMs.¹⁰ Among NCMs, child recipients were almost twice as likely as adults to be poor (29.5 percent versus 15.9 percent).

SSI's effects on recipients' poverty status vary by family residency group and presence of nonrecipients. About 25 percent of SSI recipients who lived with at least one nonrecipient were poor, regardless of whether they were individuals/couples or NCMs (Chart 8). Recall that among those in recipient-only families where SSI is the only family income, NCMs will not be poor, while individuals and couples will be. Individuals and couples who belonged to recipient-only families were among the most likely to be poor, with a poverty rate of 71.9 percent. NCMs in recipient-only families had the lowest poverty rate, 8.4 percent.¹¹ However, 39.4 percent of NCMs in recipient-only families were living in near-poverty.

NCM Poverty Rates. Child recipients living in two-recipient families had the highest NCM poverty rate (37.2 percent) among all age and number-of-recipient categories (Table 1). The poverty rate among all NCMs in two-recipient families, 24.4 percent, nearly quadrupled the rate for three-recipient families (6.4 percent). By contrast, no NCMs in families with four or more recipients were poor. As stated earlier, children were nearly twice as likely to be poor as their adult counterparts (29.5 percent versus 15.9 percent). Therefore, the number of SSI recipients in the family appears to be a stronger determinant of NCM poverty than age.

Chart 9 shows that the poverty rate for NCMs in families in which all recipients were adults was 11.5 percent, and for those in families in which all recipients were children, it was 26.9 percent. NCMs who were members of families with both child and adult recipients had the highest poverty rate of the three categories, at 30.9 percent.

Table 2 shows that NCMs residing in families with both child and adult recipients consistently had the highest poverty rates regardless of other family characteristics. Table 2 also reaffirms previously noted findings that NCMs were more likely to be poor if they had fewer recipients in the family, were children, or lived with at least one nonrecipient.

Research Question 4

How Many SSI Recipients Belonged to Multirecipient Households and What Were Their Characteristics? Many people have proposed sliding-scale benefit reductions for children belonging to SSI multirecipient households (NCCD 1995, 64–65; House Ways and Means Committee 2011; House Budget Committee 2012, 101). Reflecting the principle that families living in the same household benefit from economies of scale that reduce their per capita living expenses, the proposals would reduce SSI payments for each additional child recipient belonging to a household with multiple child recipients.¹² In this subsection, I extend the analysis from the family unit to the household level to understand the full scope of recipients who live with other recipients, their economic circumstances, and the implications of the sliding-scale proposals. The analysis takes no position on whether sliding-scale benefit reductions should be adopted for the SSI program or, if adopted, which households should be affected.

Prevalence of SSI Multirecipients. In 2005, nearly one of five SSI recipients shared a household with related and/or unrelated recipients. The family-level analysis indicates that 15.7 percent of SSI recipients were NCMs who shared their homes with at least one related recipient (Chart 1). Shifting focus from the family to the household unit reveals that a subset of NCMs (accounting for 0.1 percent of all SSI recipients) shared their households with related and unrelated recipients. Recipient couples living with one unrelated recipient were less numerous in households than in families.¹³ Another 3.8 percent of recipients were individuals who resided with at least one unrelated recipient. The 19.6 percent (or 1,440,824) of SSI recipients who shared their larger households with other related and/or unrelated recipients are called “multirecipients.” Multirecipients belong to one of two groups: (1) NCMs who live with related recipients, or (2) individuals who share their households with unrelated recipients while being the sole recipient within their families.

Characteristics of SSI Multirecipients. The majority of multirecipients had two recipients belonging to their households who were related and/or adults (not shown). Nearly 74 percent of multirecipients had a two-recipient household. Most multirecipients were NCMs who resided with related recipients (80 percent). About 77 percent of recipients living with other recipients were adults. From a different perspective, nearly 63 percent of multirecipients had only adult recipients living in their homes.

Most multirecipients appeared to be better off in their larger households than in their immediate family units, and adults appeared better off than children. When evaluated within their families using the official poverty measure, multirecipients had a moderate poverty rate of 28.3 percent relative to the overall SSI recipient poverty rate of 41.9 percent (Table 3). At the household level, only 17.9 percent of multirecipients were poor. Among individuals living with unrelated recipients, multirecipients were more than five times as likely to be poor when evaluated within their families as when evaluated within their households (61.5 percent versus 11.5 percent). By contrast, the incidence of poverty among all NCMs was marginally lower when considered at the household level rather than for the family unit (19.3 percent versus 19.8 percent). Regardless of the unit of analysis, adult multirecipients were half as likely to be poor as child multirecipients (15.9 percent versus 29.5 percent, not shown for the household-level analysis).

Conclusions

For 2005, matched CPS and SSI administrative data provide a clear picture of SSI multirecipients. A minority (19.6 percent) of SSI recipients belonged to multirecipient households. Multirecipients were most likely to be adults (77.1 percent), to share their homes with one other recipient (73.7 percent), or to be NCMs who lived with related recipients (80.5 percent). A majority (63.0 percent) of multirecipients belonged to households in which all recipients were adults. Most multirecipients appeared to be better off at their household level than in their immediate family units. Multirecipients had poverty rates of 28.3 percent and 17.9 percent when evaluated within their family and household units, respectively. Regardless of the unit of analysis, adult multirecipients had lower poverty rates than children (15.9 percent versus 29.5 percent).

The research indicates that implementing sliding-scale SSI benefit reductions for children belonging to SSI multirecipient households would affect about 23 percent of multirecipients (or 4.5 percent of all SSI recipients). Applying sliding-scale benefit reductions to all multirecipients, including adults, would reduce payments for nearly 20 percent of the entire SSI population, or 1.4 million recipients. Finally, child multirecipients are more likely to be poor and to benefit less from greater economies of scale than are adult multirecipients.