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Phase-out is the key that's missing from so many assistance programs. It's the same with Medicaid, which really discourages you from taking that next step up to

Phase-out is the key that's missing from so many assistance programs. It's the same with Medicaid, which really discourages you from taking that next step up to a slightly better-paying job, especially if you have a chronic health condition. Advancing your career in a way that should gradually decrease your dependance on government assistance instead cuts it off all at once, turning a raise into a massive pay cut, thus ensuring you don't climb the ladder and stay dependent on aid indefinitely. It's utterly perverse.

paulmd 4y ago
SSI already has an income phase-out (not a cliff), as discussed in the article. The problem is the phase-out starts at $85 (!) and benefits steeply decline once you are in the phase-out, not that there isn’t a phase-out at all. It also has a wealth cap, but that’s unrelated to the “make a dollar more and you’re done” idea that so many people hold, which is not how SSI income phaseouts work. The wealth cap is “you accumulate more than $2k at any one time, you’re done”, and that is different from making money resulting in a sudden loss. It probably is not a great idea to have a wealth cap at any sort of a level that might be relevant to a middle-class individual. Someone shouldn’t have to destroy their safety net in order to qualify for benefits in the event they become disabled, and disability holders should not be barred from having enough cash to operate and to access the financial tools that would allow them to build their way out of poverty. Maybe we could set a cap at $50k wealth or something but in the end who cares, if a few people in the top 1% end up using it that’s probably less costly than administrative costs of peering at everyone’s bank statements monthly. Nor should there really be a wealth phase-out for benefits either imo. What is the benefit of making it harder for people who are just about to make the leap off welfare to actually take the leap?

paulmd 4y ago

SSI already has an income phase-out (not a cliff), as discussed in the article. The problem is the phase-out starts at $85 (!) and benefits steeply decline once you are in the phase-out, not that there isn’t a phase-out at all. It also has a wealth cap, but that’s unrelated to the “make a dollar more and you’re done” idea that so many people hold, which is not how SSI income phaseouts work. The wealth cap is “you accumulate more than $2k at any one time, you’re done”, and that is different from making money resulting in a sudden loss. It probably is not a great idea to have a wealth cap at any sort of a level that might be relevant to a middle-class individual. Someone shouldn’t have to destroy their safety net in order to qualify for benefits in the event they become disabled, and disability holders should not be barred from having enough cash to operate and to access the financial tools that would allow them to build their way out of poverty. Maybe we could set a cap at $50k wealth or something but in the end who cares, if a few people in the top 1% end up using it that’s probably less costly than administrative costs of peering at everyone’s bank statements monthly. Nor should there really be a wealth phase-out for benefits either imo. What is the benefit of making it harder for people who are just about to make the leap off welfare to actually take the leap?