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How Government Policy Makes People With Disabilities Live in Poverty

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Imagine the year is 1984. A dollar went a lot further than it does today. What cost a dollar then would cost $2.47 in 2020. In 1984, the SSI asset limit was $2,000, and that amount remains the same today.

In 2020, clearly $2,000 doesn’t get you as far now as it did back in 1984. With inflation of 147%, the $2,000 asset limit from 1984 would equate to $4,935 in 2020. The asset limit should be increased to $4,935 and continue to grow with inflation year after year.

Experts say that your emergency fund should be large enough to cover expenses for a minimum of three to six months.

According to Bizjournal, the average cost of living in the city of Milwaukee, Wisconsin was $1,657 per month as of August 23, 2019. This includes rent for a one-bedroom apartment, utilities, internet, gas, and food. So, to have a sufficient emergency fund, a person would need to be able to save $4,971 to cover the recommended three months minimum. That’s more than double the current $2,000 cap, and more than the inflation-adjusted SSI limit if it would be amended. The current asset limit effectively reduces one’s ability to hold money for savings or emergencies.

In fact, the current $2,000 asset limit only allows beneficiaries to live paycheck to paycheck. Let’s also note that the income of someone on SSI in Milwaukee is only $867 per month, a mere 52% of the average $1,657 cost of living.

The Federal poverty level in Wisconsin is currently $12,760 per year. Those on SSI have an annual income clearly below the poverty level ($10,404 per year).

Thankfully, subsidized housing may be available for some. (I’ve been on a waitlist for close to a year and have no end in sight). Those living in subsidized housing may pay rent at a rate of about 30% of their $867 income. That leaves $607 for food, utilities, clothes, personal care, transportation, entertainment and emergencies. With that limit, beneficiaries cannot save for their future.

Looking at a real-world possibility, let’s say a car breaks down and needs a repair. Will that cost more than the $600 left after paying rent each month? What if an individual is in need of a different, more reliable car? Most used cars cost more than $2,000, thus eliminating the ability to pay for both transportation and the essentials of food and housing.

With the asset limit set at $2,000, people are prohibited from saving, which prevents them from ever having the chance to get ahead. Adjusted for inflation, the 1984 equivalent $2,000 would be $4,935. Reform to the asset limit will save time and money due to the lesser need for oversight at the SSA office.

In addition, with beneficiaries being required to report income of over $65 each month and being penalized for earning anything higher, increasing the income limit would also reduce overhead costs of the program day to day. Increased for inflation, the $65 limit in 1984 would be around $160 today. The current $65 income limit translates to working only about two hours a week at minimum wage before being penalized.

Raising the current asset and income limits now and in accordance with inflation will allow people to save money so a car breaking down will not be financially crushing. One would not have to choose between transportation and eating dinner.

Being disabled is often limiting physically and mentally and financially. Being on disability benefits makes it difficult to barely even survive in 2020. The current SSI asset limit forces people to live in fear of what may come next because, at any moment, their whole world could come crashing down solely because they do not have the finances to save themselves.

The year is 2020. Please stop requiring people on SSI and Social Security to live like it is still 1984.

Educate those around you about how limiting the current system is. Share this story. Contact your senator and representative in Congress. Let them know how the current system prevents you or someone you know from reaching their fullest potential. With more voices that speak, maybe Congress will begin to work toward change.

Getty image by JaruekChairak.

Originally published: July 21, 2020
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