Increasing SSI benefits is a more effective approach to reducing poverty than an enhanced Social Security minimum benefit

Image of Social Security cards and a $100 bill.
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Executive Summary

Poverty among older and disabled adults remains substantial and persistent. While Social Security and the Supplemental Security Income (SSI) program substantially reduce poverty among these groups, more needs to be done. A common proposal to reduce poverty rates among retirees is an enhanced Social Security minimum benefit focused on lifetime low earners. This policy, however, achieves only modest poverty reduction. The limited impact of the policy is rooted in a misunderstanding of the factors behind poverty among older and disabled adults as well as the interactions between Social Security, SSI, and Medicaid. A more effective policy would focus on enhancing SSI benefits.

Poverty among older and disabled adults

Among older adults, the poverty rate has declined substantially since the 1960s. Using the supplemental poverty measure (SPM), the Center on Poverty and Social Policy at Columbia University estimated 37.5% of older adults were poor in 1967. By the mid-1980s, poverty rates (SPM) had plateaued at roughly 15%, where they remained until recent years. During the pandemic, poverty rates declined temporarily. For adults ages 65 and older, the Census Bureau estimates poverty (SPM) declined to 13.6% in 2018 and declined further to 9.5% in 2020, only to increase to 14.1% in 2022.  For people with disabilities, improvements have been more limited. Brucker and colleagues estimate poverty (SPM) among working age adults with disabilities was 28.0% in 2010. Researchers at New York University estimate the poverty rate (SPM) among working age adults with disabilities was 24.5% in 2018, dropped to 18.1% in 2020, and increased to 23.2% in 2022. In contrast, the Census Bureau estimates poverty (SPM) among children was 13.7% in 2018, 9.7% in 2020, and 12.4% in 2022. Consequently, using the SPM, poverty is substantially higher among older adults and adults with disabilities than among children in 2022. 

Poverty among older adults is especially pronounced in families that do not receive Social Security or receive a modest Social Security benefit. For Black and Latino older adults, poverty rates are higher.  Factors contributing to this disparity include labor market discrimination and occupational segregation into low-paying jobs that lead to reduced retirement savings. Lower home ownership rates and fewer intergenerational wealth transfers further compound racial differences in retirement security. Black older adults are four times as likely to be below the poverty line than white older adults, and Latino older adults are more than 4 times as likely to be below the poverty line as white older adults. Both Black and Latino older adults have one-fourth as much household wealth as white older adults.

For the families of SSDI beneficiaries, nearly half (47%) relied on Social Security benefits for at least half of total family income and a fifth relied on Social Security for 90% or more of family income in 2010.  Many disabled people who reach retirement age experience a decline in their material wellbeing.  Individuals with a chronic-severe condition experience a substantial drop in food and housing consumption as they retire  and  SSDI beneficiaries who reach retirement age have much lower rates of savings compared to the financial security of non-disabled retirees.

Social Security minimum benefit policies

Under current law in 2023, the Social Security special minimum benefit is $1,033.50 per month for workers with 30 years of coverage, scaling down to $49.40 for workers with 11 years. The relative value of the special minimum benefit has eroded over time because it does not grow with wages. The last year a new retiree became eligible for a special minimum benefit, instead of a higher benefit based on their own wage record, was 1998.

The persistent poverty among retirees has led some policymakers to propose a new enhanced minimum benefit. The most frequently proposed minimum benefit policy targets benefit increases to long-term low-wage workers. With these proposals, the length of work necessary to receive the full benefit is usually 30 years. The full benefit usually varies from 100 to 125% of poverty with the initial benefit level indexed to wages.  For example, the Social Security 2100 Act provides a minimum benefit of up to 125% of poverty (initial benefit indexed to wages) for all those newly eligible for retirement or disability benefits. Workers with 30 or more years of Social Security coverage receive the full benefit (indexed to inflation once awarded) and those with fewer years of work receive a smaller benefit on a prorated basis. If enacted permanently in 2023, the Social Security actuaries estimate the proposal would cost 0.17% of payroll.

Social Security 2100 Act minimum benefit proposal achieves modest poverty reduction.

An enhanced minimum benefits policy, such as the provision described above in the Social Security 2100 Act, achieves a reduction in poverty for older and disabled adults. The achievement, however, is modest. The 2100 Act policy, if continued to 2065, would reduce the portion of the older and disabled adults living below a wage-indexed poverty line by 0.6 percentage points, a 6.6% reduction in the poverty rate, based on estimates by the Urban Institute. Measured against an inflation-indexed poverty baseline, the proposal would reduce the poverty rate by 0.3 percentage points, a 14.3% reduction in the poverty rate. The modest impact of this policy is rooted in fundamental policy design features.

Long-term low earners, the focus of the 2100 Act policy, are a modest portion of future Social Security beneficiaries. According to forecasts by Social Security Administration (SSA) staff, people with at least 30 years of low-wage work will comprise only about 3% of beneficiaries aged 60 or older in 2050. Their poverty rates are not substantially higher than the average, at 5.6% for low earners and 4.0% for everyone 65 or older, respectively. Low-income Social Security beneficiaries frequently have extended periods of time out of the labor force. Caregivers and people with disabilities comprise most of those not in the labor force. About 40% of people outside the labor force in 2016 were caregivers, primarily women, and about 30% were disabled (equally distributed by gender). Of beneficiaries with 5 to 9 years of caregiving without earnings, 33.3% had benefits below the poverty level in 2003 compared to 13.4% who have no years of zero earnings while raising a young child. Of those who reported poor health in 2003, 36.4% had benefits below the poverty level compared to 16.2% of those who report very good health. Workers of color experience greater career disruptions and lower earnings due to longstanding inequities in the labor market and criminal justice system.

An inherent challenge to the 2100 Act policy is its inability to help older and disabled adults who do not receive Social Security. For the 3.5% of seniors (2.4 million) who never receive Social Security benefits, their poverty rate was a staggering 54% in 2020.  The substantial majority of seniors who never receive benefits are late-arriving immigrants or infrequent workers, who don’t have enough earnings years to qualify for benefits. Some 64% are women and 60% are people of color.

Another caution regarding the 2100 Act policy is its very limited impact on beneficiaries who concurrently receive Social Security and SSI.  As is discussed further below, under current law, SSI rules disregard $20 in Social Security benefits and reduce the SSI benefit dollar for dollar for any additional Social Security benefits. Consequently, a beneficiary whose is receiving both Social Security and SSI will not receive any benefit from the enhanced minimum benefit until the benefit is large enough to fully offset the lost SSI benefits. Richard Johnson of the Urban Institute estimates that for concurrent beneficiaries with incomes that fall below 125% of the federal poverty line, only 16% would experience a larger overall income from the Social Security 2100 Act policy. 

Minimum benefit policies and the important link between SSI and Medicaid    

SSI eligibility for almost everyone in the program also confers eligibility for Medicaid. This automatic pathway to Medicaid is a critical protection for many low-income individuals. Medicaid provides more generous benefits than Medicare and 20% of older adults use Medicaid to supplement their Medicare benefits.  For low-income individuals without this Medicaid support, the Kaiser Family Foundation estimates that out-of-pocket costs can use up a major portion of their income.

In the case of minimum benefit policies, the interaction with Medicaid is especially important for the 2.6 million individuals who were concurrently eligible for Social Security and SSI in 2021. An enhanced Social Security benefit could make a beneficiary ineligible for SSI and Medicaid, and potentially worse off overall.  For the recipients of SSI affected by a Social Security minimum benefit policy, Johnson estimates that 17% would lose their full Medicaid benefits. In contrast, an enhanced SSI benefit, such as the policies described below, increases the portion of older and disabled workers who are eligible for Medicaid. 

The role of SSI in reducing poverty

Most SSI benefits go toward reducing poverty, with about 80% of SSI benefits going to people who were poor before they received benefits.  SSI substantially reduces the number of households in poverty from 63% to 42% and reduces the number of families living below 150% of the federal poverty level from 75% to 64%.

Policies to improve SSI

Expansions to SSI can have more substantial poverty impact than the enhanced minimum benefit policy discussed above by providing assistance to a broader group of low-income older and disabled adults while achieving efficiencies from income tests inherent to the program. Our proposals for improving SSI can be grouped into three themes. First, broad-based benefit expansions so a program participant usually has overall income that reaches or exceeds the poverty line. Second, enhanced policies to recognize past work and contributions to the Social Security trust funds. Third, program simplifications to increase program participation and reduce the cost for SSA to administer the program.

In the section below,  policies are presented with specific dollars values. Point estimates for policies are needed to estimate the overall cost of a package. However, policies interact and a more expansive policy in one area can affect the cost of other policies. Consequently, it is recognized that a range of values have policy merit. The SSI Restoration Act took one approach to these policies and proposed a package of changes that the Social Security actuaries estimated in 2021 would cost $510 billion over ten years, with a majority of the cost from raising the Federal Benefit Rate (FBR), the maximum federal SSI benefit, to the poverty line. It is unlikely that a proposal of that magnitude is realistic in Congress, especially given the need to address other policies of importance to older and disabled adults, especially improving long-term care services and supports.

Broad-based benefit expansions. The maximum federal SSI benefit of $943 a month for an individual in 2024 is modest. If this benefit is an individual’s only source of income, it would bring the beneficiary to 75% of the poverty line. This proposal puts forth SSI and SNAP policies that, in combination, would raise the overall resources for most SSI beneficiaries to above the poverty line. Specifically:

  • Increase the SSI individual adult FBR by $60 for a household of one. Increase the couple FBR by $90. Require states to provide a new or enhanced state supplement to all adult beneficiaries of the same amount as the FBR increase and index the increase to inflation. This combined FBR and state supplement increase would be twice the increase enacted in the 1983 bipartisan Social Security agreement after adjusting for inflation. The cost of the state supplement would be offset from state Medicaid savings from policies that will be proposed in forthcoming papers.

Recognize past work. As discussed further in previously published work, the SSI rules do little to recognize the interaction of SSI and Social Security. Concurrent beneficiaries are only able to retain $20 of their monthly Social Security benefit. To support low-income workers with social insurance in a way that reflects their contributions to the workforce and history of paying taxes, changes must be made to how SSI and Social Security interact with one another. A policy change can maintain Social Security’s benefit-contributions link by changing the Social Security disregard rule in SSI. This proposal increases the current $20 general income disregard to $60, indexes the $60 to inflation, and adds an additional 40% disregard to Social Security benefits when calculating the SSI benefit. Having a larger disregard more clearly reflects the earned income principle, as a portion of benefits received are clearly awarded due to the worker’s previous earnings history alone. Additionally, this disregard provides support for those who get a partial SSI benefit below the FBR. Therefore, a dimension of fairness is introduced, as the percentage component of the disregard ensures that the worker receives additional disregarded benefits commensurate with their contributions in taxes to the Social Security trust funds over their lifetime. This proposal has important implications for Medicaid, which will be considered in a future brief.

Improve and simplify the SSI program. The SSI program has rules that have not been indexed for inflation for decades and other rules that discourage participation and are expensive for SSA to administer. Below is a brief summary of additional policies to improve the program. 

  • Increase the asset eligibility limits in SSI. Increase the asset limit from $2,000 to $10,000 for an individual and from $3,000 to $20,000 for a couple and index, as proposed in the SSI Savings Penalty Elimination Act. The SSA actuaries estimated in 2024 that this policy would cost $9.8 billion over ten years. In addition, exclude $50,000 in dedicated retirement savings accounts for an individual and $75,000 for a couple and index. The retirement account limit would only be applied upon initial eligibility determination, allowing account values to fluctuate based on changes in market values.
  • Increase the earned income disregard from $65 to $200 in 2027 and index. Under current rules, the SSI program begins reducing SSI benefits at a 50% rate even before a beneficiary has enough income from SSI and earnings to be above the poverty line.
  • Eliminate the in-kind support and maintenance requirements in SSI. These requirements are complicated and time consuming for SSA to enforce and result in unnecessary errors and overpayments.
  • Between SSI redetermination reviews, direct SSA to hold beneficiaries harmless for fluctuations in earnings or assets relative to the prior redetermination. This policy would substantially reduce harmful overpayments.
  • Increase SSI participation rates. Utilizing the same mechanism that changes how Medicare premiums are lowered for low-income Medicare beneficiaries, require SSA to send a notice every year to all individuals who meet the SSI income eligibility threshold but are not enrolled in SSI. This mechanism uses income data from the Internal Revenue Service (IRS) plus Social Security benefit information from SSA. The notice would indicate that conditional on meeting asset limitations, the individual is eligible for SSI based on their income. The notice would then prompt the individual to provide further information on their assets. Because of the automatic income eligibility assessment, more individuals will become connected with the SSI program. This proposed reform to the SSI enrollment process is a significant departure from how the program currently operates and attempts to streamline the existing highly complex enrollment process.

The cost of this set of policies are especially dependent on the size of the increase in the FBR. For virtually all beneficiaries with concurrent Social Security and SSI benefits, the policies described above will move a beneficiary’s overall income to substantially above the poverty line. The proposed increase to the FBR  allows for a broad package of SSI improvements that can be fully offset by other proposals that will be proposed in subsequent papers. Improvements to SSI will need to be offset by savings in other areas or revenue increases to avoid obstacles in Congress.

Table 1 illustrates the impact of two of the proposals described above: increasing the SSI Federal Benefit Rate by $60 per month and increasing the current $20 per month general income disregard to $60 per month and adding an additional 40% disregard of Social Security benefits when calculating the SSI benefit amount. Under current law, an individual would need a monthly Social Security benefit equivalent to the poverty level as they would not be eligible for an SSI benefit.  Under the proposal, an individual would need to be receiving only a $440 monthly Social Security benefit to be at the poverty level, given the $775 SSI benefit for which they would be entitled.  Similarly, a couple would only need to be receiving a $258 Social Security to have an overall income at the poverty level.

These monthly Social Security benefit levels are quite small and almost all Social Security beneficiaries have benefit levels greater than those amounts. Obviously, there are some individuals with no Social Security benefits. However, this table illustrates that many individuals will be removed from poverty.  And furthermore, given the ease of application and the very streamlined application process to apply for SSI benefits in this proposal, the poverty rate of the elderly should be significantly reduced.  

Strengthening SSI has important advantages over Social Security minimum benefit policies

Targeting and efficiency  

A policy designed to reduce the number of individuals living in poverty should consider all of an individual’s major sources of income both to improve the efficiency of the policy and to provide for equity across individuals with different sources of income.  Among older adults in poverty, 66.7% receive Social Security benefits and 22.1% have pension, retirement, or capital income.  Pensions from non-covered work provides an important source of income for several million Social Security beneficiaries.  The SSI benefit is adjusted for these other sources of income, whereas a Social Security minimum benefit policy, such as in the Social Security 2100 Act, is not. 

Expanding SSI is more consistent with key principles of social insurance

Social Security is the bedrock of the social insurance protections in the U.S. A fundamental feature of social insurance programs is the link between tax contributions and benefits.  Policies that dilute that link can be justified if they serve broader compelling objectives and alternatives are not available.  Enhanced minimum benefit policies seek to achieve compelling objectives but other alternatives are available, especially policies to improve the SSI program. Extensive enactment of policies that dilute the contribution/benefit link risk undermining the broad-based public support for Social Security.

Additional mechanisms: Leveraging the income tax system

Our discussion above focused on policies to enhance the existing Social Security minimum benefit policy that appear, with some modest differences, in many Social Security proposals, including the Social Security 2100 Act. Several other proposals have been made to increase benefits for low-income Social Security beneficiaries through the income tax system. These policies deserve separate consideration; in this section, the 2016 Bipartisan Policy Center (BPC) Commission’s basic minimum benefit (BMB) is considered.

The BPC BMB is focused on Old-Age and Survivors Insurance (OASI) beneficiaries who reach the full retirement age.  The BMB would be a household benefit that would phase down as traditional Social Security benefits increased.  Families with modified adjusted gross income (MAGI) of over $30,000 for individuals and $45,000 for couples in 2015 (about $39,000 and 58,000 respectively in 2023) would have their BMB reduced or eliminated through their income tax return. The BMB is indexed to wages while the MAGI tax thresholds are indexed to inflation. The BMB does not have a direct linkage to the poverty line and the benefit supplement is not enough to move many of those affected above the poverty line.  In 2015, an individual receiving only a $280 monthly traditional Social Security benefit would receive an overall Social Security benefit of $688 including the BMB, whereas the BMB would be fully phased out for someone receiving about a $862 traditional benefit well before the poverty line is reached. In 2023, the BMB supplement would have been $809 and $1,214 for singles and couples respectively. 

Despite the limited size of the benefit, the BPC BMB achieves substantially greater poverty reduction than the Social Security 2100 Act proposal. Urban Institute modeling estimates that by 2065, the BPC BMB would reduce the poverty rate of older and disabled adults (wage indexed) by 2.0 percentage points while having a long-term cost of 0.21% of payroll that is similar to the Social Security 2100 Act policy. Using an inflation-indexed poverty rate, the BMB would reduce the poverty rate by 1.6 percentage points.

An important concern with the BPC BMB is how it interacts with Medicaid and SSI. The BPC BMB retains current law rules for SSI and according to the BPC Commission report, the increased Social Security benefit from the “BMB would effectively replace Supplemental Security Income (SSI) for all eligible OASI beneficiaries above the full retirement age.”  As discussed earlier, the loss of SSI and Medicaid can significantly impact many beneficiaries.


Proposals to strengthen the Social Security trust funds should also include policies to improve the financial security of the poorest older and disabled adults. The most effective policies take into account the life histories of low-income older and disabled adults, especially their frequent need to leave employment to manage their own health conditions or provide caregiving to family members. The most common policy proposal, the enhanced minimum benefit included in the Social Security 2100 Act, fails to consider this issue and achieves far less poverty reduction as a consequence. Effective policies must also take into account program interactions, especially between Social Security, SSI, and Medicaid. A failure to consider these interactions can greatly reduce the overall benefits to the affected beneficiaries, especially those who lose SSI and Medicaid because of an enhanced Social Security minimum benefit. Policies to update and expand the SSI program can more effectively improve the lives of low-income older and disabled adults. These policies need to reimagine the role of SSI, including greatly expanding program participation and simplifying program administration. These policies achieve substantially more poverty impact than an enhanced Social Security minimum benefit.


  • Acknowledgements and disclosures

    The author would like to thank Wendell Primus of the Brookings Institution, Karen Smith and Chantel Boyens of the Urban Institute, and Kathleen Romig of the Center on Budget and Policy Priorities for comments on an earlier draft. He would also like to thank Vani Agarwal and Caitlin Rowley for excellent research and editorial assistance.

    The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.

  • Footnotes
    1. Estimates can be found on page 20.
    2. Survey questions used to estimate the percent of the country with a disability have changed over time which limits historical comparisons.
    3. Estimates by New York University for the author, April 19, 2024.
    4. Social Security actuaries estimate assumes permanent enactment in 2023. Some recent versions of the Social Security 2100 Act only propose temporary changes in Social Security benefits. This brief is focused only on permanent changes.
    5. Boyens, Chantel, Kathleen Romig and Jack Smalligan, “Redesigning Social Security’s Minimum Benefit Could Significantly Reduce Poverty,” Center for Budget and Policy Priorities. Forthcoming, 2024.
    6. Both price- and wage-indexed poverty thresholds are presented because poverty thresholds that are indexed to price inflation have the potential to under-estimate the poverty rate, since Social Security trustee assumptions have wages growing faster than inflation.  Price-indexed poverty for the aged and disabled adults is estimated to decline from 9.0% in 2015 to 2.1% in 2065, whereas wage-indexed poverty is projected to remain essentially constant. Comparing policies in a nearer time can underestimate the impact of policies that take many decades for fully phase-in.
    7. Johnson, Richard, “How Would a New Social Security Minimum Benefit Affect SSI and Medicaid Receipt?,” Urban Institute, forthcoming.
    8. Johnson, Richard, “How Would a New Social Security Minimum Benefit Affect SSI and Medicaid Receipt?,“ Urban Institute, forthcoming.
    9. Two Social Security experts made a proposal similar to this one in 1981. See Burkhauser, Richard, and Timothy Smeeding, “The Net Impact of the Social Security System on the Poor,” Public Policy, Vol 29, No. 2, 1981.
    10. Author’s estimates consistent with chart in BPC report.
    11. Poverty reduction estimates from Boyens, Chantel, Kathleen Romig and Jack Smalligan, “Redesigning Social Security’s Minimum Benefit Could Significantly Reduce Poverty,” Center for Budget and Policy Priorities. Forthcoming, 2024. Social Security actuary estimate assumes enactment in 2027.
    12. Quote from page 93 of BPC Report.