Earlier this week, I wrote about the annual SSI Annual Statistical Report, 2013. Supplemental Security Income (SSI) is a national, needs based, federal assistance program administered by the Social Security Administration (SSA) that provides benefits to low income people at age 65 and over, and for blind or disabled children and adults.
Is SSI part of Social Security?
Supplemental Security Income (SSI) is very different and separate from the Social Security retirement, disability and survivors programs. It is not Social Security even though administered by the Social Security Administration. Depending on office size, SSA employees often work primarily with either SSI or Social Security.
Since the two programs are separate, there are many differences between them with two major ones related to how each is funded and basics of eligibility. U.S. Treasury general revenues fund SSI while Social Security is funded mainly through designated payroll taxes paid by employees and employers. SSI is an assistance program for the aged or disabled with eligibility based on financial need. Social Security provides retirement, survivors and disability benefits based on individual work.
If a person meets the separate program requirements, he or she could receive both Social Security and Supplemental Security. If not, a person might be eligible for just one or neither.
Why is there a SSI program?
The original Social Security Act of 1935 contained more than just the start of Social Security, which is in Title II of the Act. For example, funding for unemployment compensation is in Title III of the Act.
Other sections of the Act provided federal funding for state run need-based programs of old-age assistance, aid to dependent children and aid to the blind providing the roots for the future SSI program. Despite substantial federal financing, those were essentially state programs. With only broad federal guidelines, each state was responsible for setting its own standards for determining who would receive assistance and how much they would receive. As a result, eligibility requirements and payment levels differed from state to state. Over the years, the State programs became more complex and inconsistent, with as many as 1,350 administrative agencies involved and payments varying more than 300% from State to State.
Beginning in the early 1960s, this state-operated, federally assisted welfare system drew criticism from within and outside of government for lack of consistency. To reform this, Congress passed and President Richard Nixon approved the Social Security Amendments of 1972, (Public Law 92-603, enacted October 30, 1972), which federalized the programs and created Supplemental Security Income.
Supplemental Security Income (SSI) provided for a uniform federal income floor of assistance, and optional state programs could supplement that floor. The new program was historic in that it shifted from the states to the federal government the responsibility for determining who would receive assistance and how much assistance they would receive.
The Social Security Administration was chosen to administer the new SSI program because of its reputation for successful administration of the existing social insurance programs, its existing network of field offices and large-scale data processing and record-keeping operation. At the time, over 3 million people were converted from State welfare programs to SSI.
The first Supplemental Security Income payments were issued in January 1974. I was there.
Information for today’s post is primarily from the Social Security website history section and the Background section of the SSI Annual Statistical Report, 2013.
Learn more about SSI and Social Security retirement, survivors and disability benefits at www.socialsecurity.gov. Click on the homepage “Benefits” tab to select a topic.