TANF and SSI: The Rest of the Story
In last week's This American Life episode, which focuses on income support programs for people with disabilities, one segment reports on contractors who are paid by states or counties to assist individuals receiving TANF benefits in applying for Supplemental Security Income (SSI), an income support program for low-income individuals who are unable to work due to disability. While not directly stated, many listeners may have been left with the impression that states are helping people who are not really disabled qualify for SSI, or that such efforts have been a significant driver of the growth in the numbers of individuals receiving SSI benefits. Neither of these is true.
Here's the rest of the story:
Individuals who move from TANF to SSI are a small share of participants under either program. TANF is limited to families with minor children, while SSI is available to individuals who meet the stringent disability criteria, regardless of family status. One study of 532 long term welfare recipients found that only 37 ended up receiving SSI benefits. An MDRC study that linked TANF and SSI data found that TANF recipients accounted for only about 7 percent of individuals applying for SSI in a given year. This is true even though large shares of TANF recipients report work-limiting health conditions.
The MDRC study found that most people who move from TANF to SSI applied for both programs at the same time. It currently takes an average of about 3-4 months between when an individual applies for SSI and an initial decision is made, and can take much longer if an appeal is necessary. If you're a very poor parent with a disability, you can't afford to wait that long, so it makes sense to apply for TANF at the same time so that you can survive until you get a disability determination from SSI. (If you get retroactive SSI benefits covering a period when you received TANF, you generally have to pay the state back for your TANF benefits.)
Many states and counties do assist TANF recipients who are unable to work because of a disability in applying for SSI benefits. Some use contractors, as highlighted in the radio story, while others partner with local nonprofits or use internal staff. NPR suggested that states do this because TANF benefits are paid by the state, while SSI is federally funded. However, because TANF benefits are so low and time limited, the financial incentives to shift people to SSI are relatively small. Rather, states do this because they believe it is helpful for recipients, and because it can help states with the work participation rate under TANF. States that fail to meet the work participation rate targets are subject to fiscal penalties from the federal government. Individuals with severe disabilities are unlikely to participate in federally countable activities for the required number of hours per week to count toward the work participation rate. Moving them to SSI takes them out of the work participation rate calculation.
Why do these advocacy programs have so much higher approval rates than individuals applying on their own? First, the advocacy programs are selective. They do their own initial assessment of whether someone is likely to qualify and only work with people who appear to have significant disabilities. A share of the individuals who apply on their own are not disabled, just unemployed and desperate - and they are correctly rejected when they apply.
Second, the advocacy programs do a much better job of putting together the application than individuals do on their own. Poor people tend not to have a single doctor whom they see regularly. Their medical records are likely to be scattered across multiple doctors' offices, clinics, and emergency rooms. Mental illnesses may never have been diagnosed, or individuals may not remember all the details. Without a complete and documented medical history, a claims examiner will have to reject an application for disability benefits, even if the person is genuinely disabled and incapable of employment. It is better for both the applicants and taxpayers if these cases are fully documented on initial application, rather than approved on appeal months or even years later.
That said, SSI application assistance is not appropriate for all TANF recipients with disabilities. Many individuals with disabilities want to work, and can, with the appropriate supports. TANF agencies should have a range of services to offer recipients with disabilities, including treatment, education and training (because skilled jobs are often less physically demanding), and individualized job placement services. Unfortunately, the TANF work participation rate calculation fails to give states credit for these activities unless an individual is able to participate for 20-30 hours per week (depending on the age of children, not on the individual's disabilities).
What wasn't mentioned at all on the radio show is the fact that single mothers with disabilities are at high risk of losing TANF benefits due to sanctions or time limits, often becoming deeply poor and "disconnected" - not working and not receiving either SSI or TANF. In 2008, 18 percent of disconnected single mothers reported having a health problem that prevented them from working. Overall, the share of low-income single mothers who are disconnected from both work and benefits has grown since welfare reform - rising from about one in eight in 1996, to over one in five in 2008.
The This American Life story was compelling listening. But it only told part of the story. And while it did not make policy recommendations, it has already been picked up by those who are looking for excuses to slash benefits and make it harder for people to get help.