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SSI Transfer Penalty: Harsh Consequences Need Attention

April 19, 2011

In a Policy Issue Brief entitled SSI Transfer Penalty: Harsh Consequences Need Attention, NSCLC calls for repeal of the penalty due to the hardship it causes for Supplemental Security Income beneficiaries. The Foster Care Independence Act of 1999 (Pub. L. No. 106-169) increased federal expenditures for foster care. In order to make the legislation revenue neutral, Congress had to seek offsetting cuts elsewhere. One of those cuts was a provision authorizing a transfer penalty in the SSI program. It establishes a period of ineligibility when an individual transfers a resource for less than fair market value while the individual is receiving SSI or during a 36 month look-back period prior to applying for SSI. This policy is based on the unrealistic assumption that people will give away valuable property just for the opportunity to live on a subsistence income amounting, in most cases, to $674 a month. The brief was widely circulated through an Income Alert, Washington Report and with the Social Security Works coalition.

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