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Measuring Poverty: A New Approach
tional scholarships, and lump sums) minus the following: $480 for each family member (other than the head or spouse) who is under 18, older and disabled, or a full-time student; $400 for an elderly family member; medical expenses of more than 3 percent of gross income for an elderly family member; and child care and handicapped assistance expenses necessary for a family member to work or further his or her education.5 For families with net family assets above $5,000 (including the net cash value of real property, savings, stocks, bonds, and other forms of investment but excluding furniture and automobiles), the greater of the following is included in countable income: actual income from all net family assets or a percentage of their value based on the current passbook savings rate.
Section 8 families pay a rent equal to 30 percent of their countable income or 10 percent of gross income, whichever is higher, and the federal government makes up the difference.
The low-rent public housing program operates in the same manner as the Section 8 program, but the benefit is a rent subsidy for a unit in a public housing project rather than a rent subsidy for a unit of the recipient's choosing.
Supplemental Security Income
The SSI program provides monthly cash benefits to needy aged, blind, and disabled people. SSI began operating in 1974, replacing the former federal-state programs for old-age assistance, aid to the blind, and aid to the permanently disabled. About 40 percent of SSI recipients are over age 65; the remainder are disabled. Children can qualify for benefits on the basis of disability, and children can also benefit indirectly because they live in a household with one or more SSI recipients.
SSI is unique among current assistance programs in that it provides a nationwide federal benefit (indexed each year for inflation) that is supplemented by most states. State supplementation is required for people who received benefits under one of the former federal-state programs that were more generous than the federal SSI benefits, although relatively few SSI beneficiaries receive supplementation for this reason. States can also choose to supplement the federal benefit for other beneficiaries in their state, and only seven states do not currently provide some form of supplementation. In the aggregate, 44 percent of SSI beneficiaries receive some type of state supplement (U.S. House of Representatives, 1994:222-223).
To be eligible for SSI benefits, aged, blind, or disabled people must have countable monthly incomes that do not exceed the federal benefit standard plus the applicable state supplementation. Countable income is gross income minus: $720 of unearned income (not counting such means-tested income as
Legislation in 1990 liberalized the deductions allowed from gross income by increasing the dependent allowance from $480 to $550 per dependent; allowing a deduction of 10 percent of earned income; and extending the medical expense deduction to nonelderly families. However, these liberalizations were only to take effect if approved in an appropriations measure, which, to date, has not occurred.