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Universal Benefits Will Help People With Disabilities Escape Poverty

The means-tested benefits model has trapped people with disabilities in poverty without a clear path out.

A person with a disability should not be forced to choose between living off $12,000 a year and losing much-needed benefits.

Twelve thousand dollars a year. For many people with disabilities, living off this meager amount a year is customary. While poverty is on the rise in the U.S., the widening wealth gap between rich capitalists and the working class disproportionately impacts people with disabilities. The model for providing a route out of poverty for the disability community is broken, and a comprehensive overhaul is overdue.

The structure of disability benefits programs, along with unfair labor practices, are confining people with disabilities to dire economic destitution. People with disabilities are dealing with higher rates of unemployment, underemployment and poverty compared to the general population. While disability benefits programs are lifesaving measures, the means-tested model, which determines benefits eligibility based on asset and income limits, has deprived people with disabilities a mechanism to exit impoverishment.

Social Security benefits are tied to Medicaid, a health insurance program that covers people with disabilities and low-income workers, and Medicare, a program that covers workers over 65 with health benefits. Social Security Disability Insurance (SSDI) is coupled with Medicare, and those who receive SSDI are eligible for Medicare. Workers pay into these programs — collectively known as earned benefits — over the course of their careers, and then become beneficiaries once meeting eligibility requirements.

Like SSDI and Medicare, Social Security Income (SSI) and Medicaid are coupled together, and Medicaid eligibility often means becoming an SSI beneficiary (which varies based on states’ rules). Yet, unlike SSDI and Medicare, eligibility for SSI and Medicaid is determined by a person’s income and assets, or the Federal Poverty Level (FPL). Medicaid and SSI are not earned or guaranteed benefits, but rather means-tested benefits.

People with disabilities rely on Medicaid and SSI for basic survival, but the means-tested model has left people with disabilities in an economic trap without a clear route for escaping poverty.

Trapping People With Disabilities in Poverty

Although people with disabilities rely on means-tested programs, the very structure of the policy idea is flawed at its core. When Medicaid and SSI were created in 1965 and 1972, respectively, under amendments to the Social Security Act, the intention was to build a pathway out of poverty for people with disabilities and low-income workers. Yet the means-testing framework in the SSI and Medicaid programs have constrained its intent.

The amendments that created means testing in Medicaid and SSI were embraced by conservatives and liberals. Following the austerity of the Reagan administration, the Democratic Party of the 1990s moved to insert more means testing into the benefits system. Under the Clinton administration, Democrats worked with Republicans and implemented means testing in Medicare. Although championed by Clinton, means testing had bipartisan support, while Medicare beneficiaries were widely opposed to the proposal. In more recent years, the Obama administration floated further means testing in the Medicare program and cuts to social security, while GOP proposals have also sought means testing as a way to cut needed benefits.

For people with disabilities, means-tested benefits have equated to survival, but have simultaneously contributed to the high rates of poverty, while also leaving those slightly above the FPL in precarious economic circumstances.

Means-tested benefits create a poverty trap and are counteractive to providing a pathway toward economic advancement. Because of the means-tested model, working more hours or earning a higher income prevents people with disabilities from improving their financial standing. When a person with a disability wants to work more or earns a higher income, they are in jeopardy of losing their means-tested benefits. The added income from working more isn’t a wise economic tradeoff for means-tested beneficiaries. Benefits from Medicaid and SSI are lifesaving supports, and a few thousand dollars in added income won’t make up for the lifeline that these programs deliver.

Breaking down how the system plays out, in 2018, the FPL for an individual was listed at a mere $12,140. Under means testing, an individual who earns more than $12,140 per year is at risk for losing their health and income benefits.

In health economics, this phenomenon is called the Medicaid notch. Say a person with a disability who is receiving Medicaid and SSI is just under the FPL and can work 10 extra hours per week at the federal minimum wage of $7.25 per hour. That would amount to an extra income of only $3,700 per year, bringing their total income up to just under $16,000. Attempting to leave poverty through earning more income will have a higher cost through the loss of means-tested benefits. Means-testing programs like Medicaid and SSI create an entrapment into the benefits system, and ultimately, people with disabilities are restrained to a callous economic fate.

Means testing isn’t an efficient or equitable model of determining benefits eligibility. The amount of administrative costs for means testing negates any alleged savings it offers. Furthermore, leaving out a person who makes just over the poverty line does not allow for them to receive benefits that would aid in their escape from economic hardship.

Most importantly, means testing has not worked in reducing poverty for people with disabilities. Since the 1980s, poverty among people with disabilities has fluctuated year to year, but overall has been on the rise. Means testing has only encouraged a broken system and held people with disabilities in a cycle of poverty.

According to a 2017 Social Security Administration report, only around 5 percent of people with disabilities receiving SSI were working, and a majority — 57 percent — received SSI as their main source of income. In other words, people receiving means-tested benefits are held back from participating in the labor force and earning more income to escape from poverty.

The means-tested system hasn’t allowed for people with disabilities living below the FPL to earn more income while retaining their needed benefits. The system wasn’t designed to reduce poverty. It was designed with governmental budgetary concerns and austerity rather than a poverty-reducing measure for a historically disregarded population.

A Universal Benefit That Includes People With Disabilities

Corporations and many market-based ventures do not value the capabilities and labor power of people with disabilities. A segregated and exploitative employment system, paired with a flawed disability benefits structure, has left people with disabilities underrepresented in the labor force and overrepresented in the low-income demographic.

In the short term, while the GOP continually fights for redistributing wealth to the richest Americans at the expense of social programs, the public must fight to stop conservatives’ cuts to Medicaid and SSI. Any further budgetary cuts or restructuring through block grants will undoubtedly exacerbate the poverty crisis in the disability community. Similarly, the public must fight against the centrist, corporate-aligned wing of the Democratic Party, which adopted “welfare reform” and means testing under Clintonism. But that isn’t enough. Working toward a comprehensive overhaul of the benefits system in tandem with staving off attacks on lifesaving programs should become the new norm for the working class.

Poverty is a macro-scale issue that is multifaceted and impacts people with disabilities at a much larger rate. It is not enough to lightly reform the disability benefits system and raise the FPL. Eliminating means testing altogether and building a system that is based on a universal benefit with the inclusion of people with disabilities is the route toward improving material conditions for all and alleviating the disproportionate rate of poverty within the disability community. To address the U.S. poverty crisis, especially among people with disabilities, working-class people must fight for a new universal benefits guarantee.

A new benefits program for all people that includes people with disabilities should be multi-pronged and include a federal jobs guarantee with fair compensation, health care and universal basic income with extra funding for those with disabilities who are unable to work.

A federal jobs guarantee that includes people with disabilities, while also fighting for equitable compensation, will better the economic reality for those living in poverty. A jobs guarantee will not force people with disabilities to work, but simply guarantee that any person who wants to work will be able to do so while also receiving benefits.

Fair compensation must also be part of that guarantee. Raising the federal minimum wage to at least $15 an hour and eliminating subminimum wages for 321,000 workers with disabilities would similarly help combat the high rates of poverty among people with disabilities.

The disability community must also be included into a comprehensive overhaul of the U.S. health system. A single-payer health model is the only forward to curtail rising costs, improving health outcomes, expanding patient choice and increasing coverage to all. Lawmakers must be mindful of including people with disabilities in a single-payer program and ensure that all long-term care and disability-related health expenses are covered in full. A universal health benefit through a single-payer model will provide increased affordability, universal access and improved outcomes, while creating a health system that views disability as part of the human experience rather than a charitable burden subjected to means testing.

A Universal Basic Income (UBI) with increased funding for people with disabilities who are unable to work, united with a single-payer health system and a federal jobs guarantee, will ease the transition out of poverty. A UBI would provide much needed extra income for people with disabilities living on the margins and aid in reducing poverty in the U.S.

A new universal benefits system can be achieved. When investments in health care, federal jobs and income are made, economic pressure can be alleviated. These policies will have certain impact in reducing poverty for the disability community in the long run and create a system that is based on sustainable universal equality and solidarity.

When a new universal benefits system is achieved and a model that accounts for people with disabilities as people, working-class solidarity is built. A universal benefits program will maintain disability rights as human rights by including all working-class people into a universal program. Under a universal benefits model, people with and without disabilities are banded together and all are invested in a system that works to meet the needs of beneficiaries. By achieving a universal benefits model, attacks to the benefits system will be easier to stop, and all people will be invested into a system that delivers economic justice and inclusion.

Within the wealthiest society in the existence of humankind, a person with a disability should not be forced between living off $12,000 a year and losing much-needed benefits. For too long, people in the disability community have been overlooked by employers and elected officials. The U.S. has enough resources to fund the abolition of poverty of all workers, especially for vulnerable people with disabilities. Working people, poor people and people with disabilities must unite for a system that redistributes wealth to solve the U.S. poverty crisis and guarantees that all people, including those with disabilities, have a job, comprehensive health care and a basic income.

Ending means testing and redistributing wealth to responsibly fund a universal benefits program will create an economy that reduces poverty for all workers, including people with disabilities who have been held back by a flawed system.