Social Security

As the foundation of economic security for generations of elders, Social Security lifts millions of elders out of poverty and prevents millions more from falling into poverty. Without Social Security, according to one study, 45 percent of all Americans aged 65 or older would have been living on incomes below the Federal Poverty Thresholds in 2008. And yet, policymakers are now considering cuts to Social Security, a prospect that not too long ago would have been considered politically unthinkable. We must not only preserve the current Social Security system in the short-term, but in the long-term, we must also make it more inclusive (e.g. of same-sex partners, non-married partners, etc).

Diverse elders are disproportionately dependent on Social Security and Supplemental Security Income (SSI) to make ends meet. And yet, certain populations have historically been, and continue to be, excluded due to restrictions on eligibility. At the same time, other groups receive less than they otherwise would be entitled due to traditional definitions of marriage, workers being paid off the books, or other causes.

Below are some of the most important changes necessary to improve Social Security for diverse communities in the long run:

Broaden the concept of “family” from the nuclear version of husband, wife, and children to account for broader types of household arrangements: specifically, same-sex couples and heterosexual couples who are not married. Policymakers should also extend spousal benefits, survivor benefits, and the one-time death benefit to include same-sex partners of LGBT elders.

Provide an enhanced minimum benefit for low-wage workers. This “special minimum benefit” would provide full career (30-year) minimum wage workers a benefit of no less than 125 percent of the Federal Poverty Guidelines.

Finalize the Consumer Price Index for the Elderly and use it to calculate Social Security’s cost of living adjustment. Social Security’s cost of living adjustments are used to make benefits match inflation. However, the way the cost of living adjustment is currently calculated does not accurately reflect elders’ expenses. A Consumer Price Index for the Elderly would increase Social Security benefits to match rising costs of the goods elders buy the most, such as prescription medication and health care.

Improve enforcement of employee versus independent contractor labor classifications. Janitors, maintenance workers, construction workers, truck drivers, domestic care workers, and other low-wage workers are often misclassified by their employers as independent contractors so that the employer does not have to pay minimum wage, overtime, or Social Security payroll taxes. Immigrants and people of color disproportionately hold these kinds of jobs and, therefore, not only get paid less than they otherwise would, but they also end up receiving less in Social Security.

Provide a caregiver’s Social Security credit for those caring for dependent relatives. For example, caregivers could receive the amount of Social Security benefit equivalent to what they would have been allocated if they were actually compensated during their years of caregiving.

Provide paid family leave through Social Security. The United States is the only developed country that does not require that workers have access to paid leave for the birth of a child or to care for a seriously ill family member. This proposal would enable workers to access Social Security disability benefits so they have income when they need leave from work due to the birth of a child or a serious illness. Such a proposal would enable more people to care for elderly family members.

Delink citizenship from eligibility for Supplemental Security Income. SSI is a federal income supplement program to help the aged, blind, and disabled who have little or no income by providing cash to meet basic needs. It is available to citizens and historically was available to unnaturalized refugees and asylees, until welfare reform was enacted in 1996. Now, refugees and asylees are only eligible for seven years. Though many refugees do naturalize within that time, a small segment are unable to for reasons of age, infirmity, or disability.

Remove the payroll tax cap, or raise it to cover 90% of wages from the current $110,100 to $180,000. This would cause those making above that amount to pay their fair share. The Social Security tax is capped now at 6.2 percent of $110,100. In 1983, the ceiling was set so the Social Security payroll tax would apply to 90 percent of all wages covered by Social Security. Today, though, the Social Security payroll tax applies to only about 84 percent of total income. To go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000. Doing so would keep Social Security fully solvent for more than the 26 years that the Social Security Trust Fund is projected to pay full benefits.

This excerpt is taken from Securing Our Future: Advancing Economic Security for Diverse Elders, by the Insight Center for Community Economic Development. Read the full report >>