Supplemental Security Income for the Disabled (SSI-D) Block Grant

Supplemental Security Income for the Disabled (SSI-D) is a means-tested income assistance program (PL 96-603) that began in 1974 to provide monthly cash benefits to eligible low-income individuals with disabilities, including children under age 18 with profound physical impairments such as cerebral palsy and Down’s Syndrome, as well as qualifying individuals who are aged or blind. It is funded through general revenues and is administered by the Social Security Administration (SSA). While initially well intended, SSI-D over time has become the welfare program of choice for far too many.

In 1984, Congress mandated the development of new disability standards for individuals with mental disorders. Then, in 1990, two important changes were made that exploded SSI-D eligibility for children: the SSA added impairments such as Attention Deficit Hyperactivity Disorder (ADHD) to the list of conditions it considers disabling; and, as a result of the U.S. Supreme Court decision in Sullivan v. Zebley, established “functional equivalence” as opposed to medical diagnosis as a basis for determining SSI-D eligibility for children.

These policy changes opened the door for severe abuse of the SSI-D program and the automatic eligibility it grants its participants for separate Medicaid and other welfare benefits. The number of children qualifying for benefits more than tripled from 265,000 in 1990 to almost 955,000 in 1996.⁴⁹ From 2000 to 2011, the total number of children with mental impairments on the SSI-D disability rolls grew by an astounding 60%, from 543,000 to almost 861,000.⁵⁰

The SSI-D program is now often referred to as the “New Welfare” since many states have redirected much of their TANF cash welfare caseload to this 100 percent federally funded — and higher benefit — program once dependent children reach the five-year eligibility limit of the TANF program.⁵¹

In October 2011, the GAO conducted a critical review of children’s benefits under SSI-D and reported that the use of “functional equivalence” as a basis for determining eligibility has steadily increased — with 71 percent of recipient children with ADHD qualifying under it in 2011 compared with 23 percent in 2000. Similarly, 81 percent of children who qualify due to speech and language delays were admitted using “functional equivalence” in 2011 — up from just 59 percent in 2000.⁵²

SSA is generally required by law to perform Continuing Disability Reviews (CDRs) at least every three years on child recipients under age 18 if their impairments are likely to improve. However, GAO found that between FY 2000 and 2010, the number of CDRs actually performed by SSA declined significantly, resulting in fewer children being removed from the program prior to age 18. During that time frame, all childhood CDRs fell 70 percent, from more than 150,000 to just 45,000, while CDRs for children with mental impairments fell by 80 percent, from 84,000 to 16,000. In addition, the GAO found that more than 400,000 CDRs are overdue for children with mental impairments — with some CDRs having been pending for 13 years or more.⁵³

In 2011, SSA paid almost $50 billion in SSI-D benefits to about 8 million recipients, of which about $9.4 billion was paid to 1.3 million children.⁵⁴ According to the GAO, “SSA’s process for issuing waivers from the CDR’s legal requirement lacks transparency, and without these reviews, SSA could continue to forgo significant program savings.”⁵⁵

It is readily apparent that SSA is not capable of adequately administering the SSI-D program and that it needs to be reformed along with other low-income assistance programs to prevent it from serving as an end run around the current TANF program and future welfare block grants.

The CCWR recommends that funding for the disability portion of SSI be provided to the states as a stand-alone block grant. This one program cost over $52 billion at the federal level in FY2011 — not counting the federal government’s administrative costs for the program.⁵⁶

Table Supplemental Security Income for the Disabled Block Grant (PDF – 145 KB).

Table Supplemental Security Income for the Disabled Block Grant