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.

Beyond its financial value, the researchers said the housing assistance has an intangible benefit: the security families have in knowing they “will not face increasing rents or be forced to move in the future.”

To read this study, authored by Erik Hembre and Carly Urban, see “Housing Assistance and SSI Participation.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.