Need To Prevent Windfall Benefits to Supplemental Security Income Recipients

HRD-80-44: Published: May 30, 1980. Publicly Released: May 30, 1980.

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The Social Security Administration (SSA) is required to determine Social Security Income (SSI) eligibility and benefit payment amounts on a quarterly basis. It computes benefits based on the income a recipient expects to receive over a projected 3-month period. Basic benefits are reduced dollar for dollar for countable income. Windfall benefits occur when other retroactive income covering prior quarters is received in a current quarter and is greater than the current quarter's SSI benefits. The Social Security Act does not provide for the recovery of these windfall payments creating a program of inequity which allows recipients of large retroactive payments to receive more SSI benefits than recipients who receive a similar amount of non-SSI income on a current monthly basis. Legislation has been proposed which would partially solve the problem.

During fiscal year 1977, SSI recipients received windfall benefits totaling an estimated $43.6 million as a result of receiving retroactive social security retirement, survivors, or disability benefits. Windfall benefits continue as a result of retroactive income from these as well as other sources, including veterans' compensation and pensions, and railroad retirement benefits. The present Social Security Act only permits SSI payments to be reduced for the calendar quarter that other income is actually received. Legislation authorizing other Federal benefit programs does not provide for reducing retroactive benefits paid to individuals receiving SSI to offset windfall benefits. By limiting other income benefits to that which the individual would have been entitled had the other income payments been current, equal treatment could be provided to all SSI recipients. While SSA officials believe many windfall benefits resulting from retroactive social security payments can be handled administratively if the proposed legislation is enacted, some cases will continue to occur when SSI retroactive payments are made after retroactive social security payments. The Department of Health, Education, and Welfare (HEW) should determine the extent of windfall benefits that occur when SSI recipients receive retroactive payments from other Federal benefit-paying programs, and if significant, assess the need for additional legislation to prevent windfall payments from occurring.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Favorable consideration should be given to the proposed section 303 of H.R. 4904 allowing the Secretary of HEW to offset excess SSI windfall benefits against retroactive social security benefits.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: If the proposed legislation presently pending before Congress is passed, the Secretary of HEW should direct the Commissioner of SSA to take the necessary administrative action to change processing of concurrently filed claims to reduce the number of windfall benefits paid to SSI recipients receiving retroactive social security payments before retroactive SSI payments, and advise Congress whether additional legislation is needed to eliminate all windfall benefits to (1) SSI recipients who receive retroactive social security benefits before retroactive SSI benefits and (2) SSI recipients who receive retroactive benefits from other Federal benefit-paying programs, such as Veterans Administration or the Railroad Retirement Board.

    Agency Affected:


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