Did you know this about SSI?

I am a financial stability counselor with homeless addicts and mentally ill, and part of my job entails helping people find ways to manage their money and recover from financial mistakes of their past.

I was working a budget with one gentleman, an SSI recipient who was newly in an apartment after having been homeless for several months.  I began to talk to him about building savings for future emergencies so he’s less vulnerable to repeated homelessness (a conversation I have with all of my guys). This man immediately cut me off.  “Oh no, I can’t do that.  I’ll lose my social security.”

Say what?

Could it be, as I’m trying to help this man recover and take responsibility for himself and his actions, that he is not allowed to build a safety nest for the future?

Short answer: Yes

Long answer: There is an asset limit that to which social security recipients must adhere, a bank account (even emergency savings) counts. If single recipients have more than 2,000 in a bank account, their SSI payment decreases.

This is a no-no.

This is a no-no.

What this means, practically, is that people receiving SSI payments from the government are discouraged from building a safety net for themselves, discouraged from saving for things, even when those things will help them get themselves out of poverty, like housing or education.

I think this is absurd, and not only because it makes my job harder. (What can I say to my client? Encourage to save anyway in an account when we know he’ll receive less in payments? Encourage him to save on the quiet and cheat the government? NOT encourage him to save?)

This is just counter-intuitive to the possibility of these recipients lifting themselves out of poverty, making a substantive change in their lives.  I’m not talking about getting people rich here, but simple stability, enough for someone to get their head on straight and take care of themselves. The way the system currently is just guarantees that recipients will become and remain dependent.

For more information, here is a fact sheet published by the Corporation for Enterprise Development concerning H.R. 4937 in 2010, a bill that proposed to permit single SSI recipients to save up to $5,000 and to be able to build a retirement account. Nothing was done on it in 2010, and the bill was reintroduced in 2011 as H.R. 2103. It died before reaching committee.

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1 Comment (+add yours?)

  1. Trackback: Did you know this about SSI? Follow-up | Mixing Chicory

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