Asset limits prevent people on SSI/SSDI from obtaining financial stability

Most of us have experienced the harsh effects of the financial crisis, but what if you had no savings or 401K to cash in to give you a little buffer? What if you were not allowed to save for an emergency like this? Individuals on SSI or SSDI are in this situation.

At the SparkPoint Marin Center we say that everyone should have three months of expenses in their savings. So when things go wrong, which they eventually do (trust me on this), you have a cushion to fall back on.

When you are on SSI/SSDI fixed income, not only is it close to impossible to put money aside for savings, but the government actually discourages it. Currently, you are not allowed to have more than $2,000 in assets in order to receive disability benefits. $2,000 is not a lot for when, for example, you break a leg or another financial crisis occurs. People’s savings need to be higher.

After talking to several people living on SSI/SSDI, I have learned about the utter lack of resources our elderly and disabled people have. However, even with their limited income and barriers to extra revenue or savings, they were making ends meet…until the financial crisis hit!

So why can’t they save? Asset limits are designed to restrict who applies for benefits and who deserves benefits, but it doesn’t always work. Since assets are technically defined as any personal resource, such as cash, savings accounts, a car, a retirement fund, or a valuable heirloom, benefits programs can strip away someone’s livelihood before beginning to help them.

Not only are these asset limits really inhibiting to individuals receiving benefits, but enforcing them is expensive. In fact, the percentage of people who “trick” the system and get benefits unlawfully is so low it does not equal the amount of money spent on enforcing asset tests. Many states have actually done away with their asset limits. For example, 5 states have gotten rid of Temporary Assistance for Needy Families (TANF) asset tests, and all but 2 states do not do asset tests for Children’s Health Insurance Program (CHIP) (CFED: Eliminating the Incentive to Save). While many state benefit programs are tending to move away from asset tests, the federal social security act has not been updated since 1970 and continues to enforce outdated asset limits.

(I wrote this for the Marin Grassroots Network)