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Issue 1
QUICK GUIDE TO PROGRAMS
The New Ticket to Work law.
What we can |
Harriet Johnson on the plan to privatize Social Security
Social Security:
What it does,
By Harriet McBryde Johnson.
Harriet McBryde Johnson is a lawyer and disability activist in Charleston, SC. Her practice emphasizes disability issues including Social Security.
A nice home. A strong family. People working hard to pay the rent and put food on the table. Beyond that, the dream means having the "little bit extra" it takes to buy a home, launch children into a good life, and cover the losses and setbacks that happen from time to time.
During the 1930s New Deal, the Social Security Act was passed to bring that dream closer for millions who had previously lived on wages that, at best, kept them at the precipice of catastrophe. In good times, they could pay rent, buy food, and keep the children clothed, but any setback -- an illness, a job loss, even a bad storm -- could mean destitution. When a worker died or became unable to earn even subsistence wages, there was no cushion. Sometimes aged parents and orphaned children found shelter with relatives, but too often the relatives had nothing to spare. By ensuring basic income protection to wage earners and their families, the Social Security Act brought a new level of stability to families and to the economy as a whole.
About the new Ticket to Work law
So what went wrong? Why does it seem that Social Security is telling us, people with disabilities, not to dream that American dream? Why is it saying that a hand-to-mouth existence, in poverty or at the brink of poverty, is all we can hope for?
I set out here to give a "big picture" answer to that question, but in the wonderful world of Social Security, the devil is in the details. Therefore, I have to start with a very lawyerly, very sincere disclaimer: This article is a discussion of public policy, not a source for how-to advice. It tells how the main Social Security programs work for most disabled people. Your individual situation is probably different. If you want to escape regulatory bondage and chase either the American Dream or your own personal dream, there are lots of creative things you can do. At most, this article may suggest some questions to ask a good benefits consultant. End of disclaimer.
Social Security has evolved a lot since the 1930s.
The original program is now in Title II of the Social Security Act. In the disability community, Title II is often equated with SSDI, Social Security Disability Insurance. In fact, it is more than that: The correct acronym for Title II (and this is a world that lives and breathes acronyms) is RSDI: Retirement, Survivors' and Disability Insurance. Disabled people are among the beneficiaries of all three arms of Title II.
Working the acronym back to front:
DI, Disability Insurance, covers wage-earners who become disabled later in life. It pays these disabled workers and their qualified dependents.
S, Survivors' benefits, go to deceased wage-earners' minor children, their disabled spouses (along with some other categories of spouses), and their adult children who became disabled before age 22.
R is the granddaddy of them all -- the big Retirement program. It covers not only the retired wage-earner and but also disabled adult children of the wage-earner.
To sum up, if you're disabled, you might get Title II benefits based on your Social Security account from your own work, or based on your spouse's account, or based on a parent's account. The common thread is that entitlement to benefits -- and the amount of your check -- is always traced back to someone's contribution into the system in the form of FICA tax. These benefits are not means-tested or adjusted based on financial need. You can have a million dollars in the bank and still qualify for monthly benefits. However, to qualify as "disabled", you must be unable to work. If you "earn" more than $700.00 per month, you will be presumed non-disabled by Social Security. Disabled recipients of Title II also get Medicare coverage after a waiting period.
Title XVI, Supplemental Security Income, came later to the legislative scheme. One arm, SSI-D, covers disabled people. The other covers elderly people. SSI evolved when it became clear that Title II had failed to rescue many disabled and retired workers and their families from destitution.
Because all Title II benefits are keyed to someone's paying into the FICA system over time, millions of people -- people who lacked that FICA history and failed to qualify as a disabled adult child or disabled widow(er) of a Title II beneficiary -- were completely left out of Social Security's promise. Others found that years of intermittent low-wage work produced a Title II check of only $50.00 or $100.00 per month. SSI was designed to "supplement" Title II by guaranteeing a minimum income to disabled and elderly people.
Title XVI's SSI, targeted at disabled and elderly people, was part of the same broad anti-poverty policy that produced Aid to Families with Dependent Children (AFDC, commonly known as "Welfare"), targeted at poor single parents. A political consensus had emerged that these three groups -- people who were disabled, elderly, and single parents -- were not to blame for their poverty and therefore deserved a minimum income without working. As to single parents, the consensus has eroded. In 1996, "welfare reform" ended AFDC as a long-term entitlement.
To qualify for SSI requires proof of poverty similar to what is required under Welfare. The rules are complex, but in general, you don't qualify if you own "resources" (SSA's word for what accountants call "assets" and most of us call property, wealth, or money) worth more than $2,000.00. Your home isn't counted, and in some cases your car isn't counted, but most everything else is.
If you meet the resources test and have no income, your SSI check will be $512.00 per month in most states. (A few states supplement the federal SSI amount.) After a small exclusion, the $512.00 benefit is reduced by one dollar for every dollar of unearned income you get, including any Title II check. To encourage you to work, the government reduces your SSI by only 50 cents for each dollar you earn. If you get even one dollar per month in SSI, you are covered by Medicaid.
So the basic scheme is two programs for two kinds of people. Upon disability or old age, middle- and upper-class wage-earners get Title II and Medicare, usually supplemented by private pensions, insurance, savings, and investments. The very poor aged and disabled remain very poor -- but stay alive -- under Title XVI (SSI) and Medicaid.
For vast numbers of people, these two programs work reasonably well. Any Social Security lawyer will tell you about very grateful clients -- winning a difficult Social Security claim can be the difference between life and death. But when you factor in the real-world lives of some of us, especially those of us with expensive disabilities, fundamental irrationalities in the system become clear.
Irrationalities
First, the Social Security system (both Title II and Title XVI) irrationally divides the world between those who can work and those who cannot. Perhaps that division made some sense in the work world of the 1930s, dominated by an uneducated labor force concentrated in manufacturing and agricultural jobs. However, since then, advances in technology, the growth of service industries, and the rise of part-time and temporary work, and self-employment, have changed what workers do and how they do it. With the right resources and job accommodations, almost anyone can work.
Second, the rules usually cut off entitlement before the individual is reliably earning enough money to replace the steady monthly income and medical coverage offered by Social Security -- for many people, working would be an unreasonable, self-destructive choice. This is the irrationality addressed by most of the Work Incentives that have been written into the law over the past few years. By allowing certain income and resources to be excluded from SSI calculations, allowing certain people to keep medical coverage after leaving the rolls, and so forth, Work Incentives have enabled many Social Security recipients to work and keep the safety net intact. But these Work Incentives are difficult and complex. Most recipients don't even know they exist. They remain narrow exceptions to the general rule that you get benefits if and only if you're unable to work.
Third, poor people's Medicaid is in many ways better than middle-class people's Medicare. Medicare was based on 1940's thinking on what basic medical coverage should look like. It covers a portion of doctor and hospital charges, and has an acute-care focus. Medicaid was based on 1960's research on what people need. While low reimbursement rates limit the number of participating doctors and hospitals, the consumer gets full coverage of a broad range of services. If you have expensive needs like kidney dialysis, HIV drugs, or full-time attendant services, Medicaid can be worth tens -- or even hundreds -- of thousands of dollars a year.
Fourth, the income and resource limits of Title XVI are too low to guarantee economic stability, even at the level of bare subsistence. Living on $512.00 per month is a delicate balancing act requiring ingenuity, persistence in locating other benefits, and considerable good luck. Any disruption -- the loss of that cheap rented room, the death of a loved one or even the death of a car -- can make the whole structure come tumbling down. When that happens, there's a need for more public support. When public support fails, people who can't survive on the streets typically wind up in institutions. We know all about the irrationality of institutions.
What can we do to reform the system?
Do we have to accept a public policy that is aimed at helping us, but doesn't reflect the reality of our lives? What can we do? There are lots of options.
The most radical -- and rational -- option would be to sweep away the categories that divide us. Don't restrict Medicaid to poor disabled and elderly people. Make universal, comprehensive health coverage a right of citizenship so no one has to trade a good job or a nest egg for the services they need to stay alive. Don't restrict minimal income support to those defined as unable to work. Assume people are rational. They will work if benefits are structured so that work makes them better off than not working.
For those who think more incrementally, here are some more modest proposals:
First, make Medicare more like Medicaid so Title II recipients with expensive medical needs will not be forced to impoverish themselves to fund the services they need. Generally, Title II recognizes that both individuals and the broader public good are served by encouraging private savings and investments. To the extent that Title II recipients have private pensions, IRA's, and other resources, they enjoy a better quality of life with lower public investment.
Second, allow more people to buy in to Medicaid and Medicare without being poor or unemployed.
Third, restructure monthly benefits to reflect the reality that disability is not all-or-nothing. Allow people with work-related impairments to earn what they can, when they can. Over the course of our lifetimes, people who can work occasionally should be able to fall back on the rolls during periods of unemployment or get a partial benefit when working part-time.
Fourth, make sure that benefits are not cut off until the individual's income is of greater value to the individual than the benefits in question.
Fifth, raise Title XVI income limits above the poverty line. Raise the resource limit to allow a reasonable financial cushion to prevent poverty over the individual's life. Make sure the limits keep up with inflation.
Sixth, also under Title XVI, expand the categories of income and resources that are excluded from the limits. For example, just as home equity is excluded, so might home maintenance, taxes, and insurance.
Seventh, push SSA and the disability community to make full use of the Work Incentives, those lovely loopholes that already exist.
In pushing for a more rational Social Security system and a way out of the poverty trap, we need to be mindful that the effort is fraught with difficulty and danger. It's tempting to hammer on the simple message that "All disabled people can and should work." It makes people admire us so much!
But the more complicated truth is that for most of us, disabilities do limit the amount and kinds of work we can do. Many of us cannot hope to fund our expensive lives solely through work, at least not all the time. We cannot afford to lose our basic claim on the public largess or trade secure benefits for forced "workfare." We need to be wary of what happened to single parents when AFDC was revamped in 1996.
Like Welfare, the current disability benefits structure too often gets in the way of responsible work, savings, and investment. It pushes people into ever more expensive, dream-killing dependence. But we need to be sure everyone knows that the benefits are not the problem. Our beef is with the irrational restrictions that come with them. What we are after is a system that lets us do all we can for ourselves and our families. Nothing more, nothing less.
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