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The SSI Resource Limit and Home Ownership Exclusion

Ms. Smith, a Supplemental Security Income (SSI) recipient, came to me with a writ of restitution. That meant that her landlord would soon show up at her door with Federal Marshalls and a moving crew to throw her and her stuff out on the street.

Her landlord/tenant case was a straightforward non‐payment of rent, so she could still prevent her eviction by paying all that she owed plus court costs.

Non‐payment of rent cases occur for a variety of reasons; but frequently, it is because the cost of living is simply higher than the income people receive.

This is very common for people like Ms. Smith, whose sole income was Supplemental Security Income–the safety net program for elderly people and people with disabilities who do not have enough of an earnings record to qualify for a higher benefit through Social Security disability or retirement insurance. Such people have a maximum benefit of $733, approximately 75% of the federal poverty line for a household of one. In DC’s housing market, $733 is not even enough for a one bedroom apartment, much less the other costs of living that SSI is meant to cover.

My client, however, had a housing choice voucher, so she paid 30% of her income for rent, and the government paid the rest. Covering the cost of food, toiletries, transportation, clothing, entertainment, and life’s other costs, with a budget less than $500 per month is by no means easy, but our clients are pretty resourceful and we can help fill in some gaps.

Prior to coming to see me, Ms. Smith had faced some unexpected expenses that broke her already strained budget. Her father was dying, and he had some medical bills and final expenses that needed to be covered. This fell on his impoverished, disabled daughter, who did all she could to help her father in the final few months of his life. Unfortunately, this meant the rent did not get paid, and thus she arrived at our door.

Just for a second, let’s play “blame-the-victim.” Let’s wag our fingers and say that Ms. Smith should have had some money saved away for a rainy day. If you’re going to live so extravagantly off the public dole that you can afford to pay your dying father’s incidental expenses, you probably should have saved enough money so you could still pay your $219 in rent every month.

Surely she did not need every dollar of her $733 benefit (SSI rules rely on a premise that people can afford to live on 90% of their benefit), so she could have afforded to put a little money away each month. Maybe she received an inheritance or a birthday present from some cousin, kept the back-payment from the initial SSI award that took a half decade to be approved, or won a small lottery—it happens—and she should have done what all responsible Americans ought to do and save her money.

Unfortunately, because Ms. Smith was on SSI, she was not allowed to behave like a responsible American. The general rule that one is supposed to save—a rule encouraged by generous tax policies for retirement and capital gains—does not apply to people on SSI. You see, SSI is not payable to people with over $2,000 of countable resources, a number that has not changed since 1989 . Cash, savings and retirement accounts, valuable artwork, certain life insurance policies, extra cars, and everything except a few excludable items can disqualify someone from receiving SSI.

This policy is presumably meant to conserve SSI resources for those who really need it. In reality, however, it forces people to modify their behavior and keeps them from being able to handle emergencies or save for major purchases. Furthermore, the disabled members of wealthy families—in the unlikely event that they end up on SSI at all—have a variety of ways around the resource limit such as special needs trusts that are difficult to access for the poor.

Another exception to the resources limit is housing; and here, Social Security taps one of the great kegs of American racism.

A home, regardless of its value, can be excluded as a resource for SSI purposes. While the aforementioned client could not save a year’s rent without triggering the resource limit, another beneficiary could own a million dollar home.

According to data from the US Census Bureau, the home-ownership rate for African Americans is 42.1 percent compared to 72.3 percent for whites. This is the effect of a long history of legalized discrimination, income inequality, predatory lending practices, limited access to credit, and good old-fashioned American violence. For anyone reading this post who has not read Ta-Nehisi Coates’s “The Case for Reparations,” I thank you for your readership and strongly encourage you to spend your time more productively.

Among SSI recipients, homeowners have a tremendous advantage over non-homeowners. When they have a little extra money, they can take care of repairs without the money counting as benefit-affecting income or a resource. If they need to move, Social Security gives them some time to sell and buy before counting the resources against them. If they want to grow vegetables in their backyard, the produce does not count as in-kind support and maintenance that would lower benefits.

Example after example of preference to homeowners is sprinkled throughout the Social Security rulebook, useless to so many African-Americans who have been excluded from the “American Dream.”

Allowing SSI recipients to have a stable source of housing through home-ownership is a good thing—it keeps a lot of people from the situation our client was in. Ultimately, it is not Social Security’s fault that American society has made it so much easier for white Americans than black Americans to buy houses and accumulate wealth. (Well, maybe a little bit. Read Coates’s article closely or continue reading this series to find out how!)

However, we need to stop compounding centuries of oppression and start resisting them. We need to allow all people on SSI to take the steps necessary for their survival and flourishing.

Congress has had the opportunity to do so through legislation such as the SSI Restoration Act of 2014 and the SSI Restoration Act of 2015 that we and others have advocated for in the past. It is time that we start enacting policies that keep people in their homes.

Click here to read Part 1.

Click here to read Part 3.