August 27, 2020

Housing Subsidies May Fuel SSI Growth

Federal spending on the Supplemental Security Income (SSI) program has grown substantially in recent decades, making it the single largest source of cash assistance for older or disabled Americans with little or no income.

For people with disabilities to qualify for SSI’s benefits – the federal maximum is currently $783 per month, with most states adding in smaller amounts – the disability must severely restrict their ability to work. The average monthly payments under Social Security’s separate disability insurance (DI) program are larger, but people who lack the necessary work history required to apply for DI can seek disability status through SSI.

To better understand SSI’s rapid growth, researchers asked whether the preference for housing assistance that some cities give to people with disabilities might create an incentive – albeit an indirect one – to seek approval for SSI. The possibility of moving higher on a city’s long waiting list for housing is highly prized, because the demand for low-cost housing vastly exceeds the supply.

The housing assistance comes in two forms: apartments in public housing developments or federal rental vouchers that pay landlords the difference between their market-rate rents and what the low-income household can afford. Both types of assistance cap rental payments at 30 percent of the household’s income.

First, the researchers found that people with disabilities are, indeed, more likely to get the scarce housing assistance, and their advantage has increased over the past 20 years. Single mothers and people with no more than a high school education in particular benefit from these housing preferences.

The researchers also confirmed their hunch that the prospect of obtaining low-cost housing is a factor in the growth in SSI’s enrollment. And the more expensive the rents in an area, the stronger the incentive to seek SSI: a $1,000 increase in the value of the assistance increases enrollment in SSI by almost a third, according to the study. …Learn More