Ending the Two-Tier System of Disability Benefits

In the period before the adoption of disability benefits, people with disabilities who were unable to work were often forced into destitution and viewed as undeserving of public support. The creation of public disability benefits marked a drastic shift in the government’s treatment of people with disabilities, signalling societal recognition of their right to financial security. But despite such changes, out-of-date views on the worthiness of people with disabilities to receive benefits prevail. The US currently employs a two-tier system whereby those who have worked receive improved benefits and those who have not worked “long enough” are left behind. All people with disabilities deserve to live with dignity and financial security. To achieve this, the United States must move beyond arbitrary notions of deservingness and abolish the two-tier system. 

The system of disability benefits that is in place today was first established by the Social Security Act in 1935. Notably, the Social Security Act created two separate programs for the provision of disability benefits. The main program is established in Title II of the act and is known as Social Security Disability Insurance (SSDI). Eligibility for this federal program requires that individuals meet a set of conditions, including at least 20 quarters of work experience in the past 40 quarters; this made SSDI inaccessible for those born with disabilities and those who became disabled before accruing enough work credits. These people could only receive benefits through Supplemental Security Income (SSI), a significantly less generous program that provided cash assistance to low-income people with disabilities who did not meet the work history requirement. This distinction between SSDI, which is still only available to those with work histories, and SSI has persisted to the present day, creating substantial difficulty for those people with disabilities forced to rely on SSI.

There are numerous issues with SSI, all of which can cause significant hardship for recipients. The first and most glaring is that SSI provides only subpoverty level income to its recipients. The maximum SSI benefit for an individual in 2022 is $841 a month, or $10,092 a year. In contrast, the federal poverty line for an individual in 2022 is $13,590 a year. As a result, people with work-limiting disabilities who rely entirely on SSI for their income are forced into poverty, leaving them with little financial security. 

To make this reality even worse, SSI program rules are designed to make it extremely difficult for recipients to earn additional income. Only individuals who earn less than $841 a month from any income source are eligible for the program, and each additional dollar earned of “countable” outside income reduces benefits received from SSI by one dollar. SSI also imposes significant restrictions on assets for recipients: Assets over $2000 disqualify an individual from receiving SSI. These rules force recipients to avoid saving and to not seek out additional sources of income in order to keep their benefits, as each additional dollar earned in income is offset by a decreased benefit payout. When considered with the fact that the SSI benefit is below the federal poverty line, it is obvious that SSI is a failure as a social insurance program, likely stemming from the perception that those without work histories are less deserving of public assistance than those with work histories.

Fixing the immediate problems with SSI is not a difficult task, as the failures of the program are clear. A recent bill proposed by Senator Sherrod Brown (D-Ohio), the Supplemental Security Income Restoration Act, would go a long way in patching the glaring hole in the social safety net that SSI currently represents. The bill proposes raising the SSI benefit to 100 percent of the federal poverty level and indexing it to inflation, raising the asset cap from $2,000 to $10,000, and raising the income recipients can earn before being subjected to benefit reductions. These reforms would significantly improve the quality of life of Americans with disabilities, and polling by Data for Progress, a progressive polling firm, finds that these changes, along with the removal of the asset cap, are overwhelmingly popular among the American public. Given this polling, it is likely that the lack of policy action taken to improve SSI is less a result of political resistance and more a result of inertia and lack of attention. A determined campaign to improve SSI could therefore yield real benefits for people with disabilities who rely on it.

In the long run, however, building a system of disability insurance that guarantees financial security to all people with disabilities requires rethinking the two-tier system, which separates those with work experience from those without work experience. This distinction remains rooted in ideas of worthiness, with those who have work histories seen as more deserving than those who do not. However, there is nothing inherent to a person who becomes disabled after working for an arbitrary period of time that makes them more deserving of dignity and security than someone who was born with a disability or developed a disability early in their career. All of these people are equally deserving of the support of society, and our system of disability insurance should reflect that fact. 

One proposed solution to this problem is given by Matt Bruenig of the People’s Policy Project, who suggests guaranteeing a minimum SSDI benefit to all people with disabilities equal to the federal poverty line regardless of work history, earnings, or assets. He further proposes abolishing the SSI program entirely. This solution would end the two-tier system, allowing current SSI recipients to stand on equal footing with those who receive SSDI. The policy would allow those who receive more than the minimum benefit through SSDI to continue to do so, while also providing a minimum level of support for those who currently rely on SSI. It would also greatly reduce the administrative complexity of programs for the provision of disability insurance, allowing all people with disabilities to access benefits through one centralized program. While consolidating these programs may cause some transitional difficulties for government offices, it would greatly improve recipients’ ability to access benefits.

The public provision of disability benefits allows those with work-limiting disabilities to maintain some level of financial security without being forced to rely on private charity. However, the current system creates two tiers within the benefit process, separating those with work histories from those without and forcing the latter into financial precarity. Updating and reforming SSI would take the United States a small step closer towards the ideals embodied, however imperfectly, by the original Social Security Act: that all people deserve to live with dignity, regardless of whether they are able to work or not.