110 HR 3696 IH: To exclude the first $75,000 of the value of retirement
U.S. House of Representatives
2007-09-27
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1.Findings and statement of
purpose
(a)The
Congress finds as follows:
(1)The Supplemental Security Income program
provides essential income security to more than 4,000,000 working-age adult
Americans, most of whom are disabled.
(2)Eligibility for the Supplemental Security
Income program requires the applicant to have very few assets that are
available for the individual’s use. However, certain necessary assets, such as
the person’s primary residence, and certain government benefits, such as the
Earned Income Tax Credit, are excluded from the asset test.
(3)The value of a traditional defined benefit
plan that will eventually provide the former worker with periodic payments does
not count against the asset limit for the Supplemental Security Income program,
allowing a person who becomes disabled to qualify for Supplemental Security
Income and Medicaid benefits while maintaining the right to receive a pension
at retirement age.
(4)Americans are increasingly dependent on
defined contribution plans such as 401(k) and individual retirement accounts to
provide for retirement security. Assets saved in such plans count against a
person’s eligibility for Supplemental Security Income benefits.
(5)Persons with disabilities are thus
discouraged from accumulating any retirement savings during periods of time
when they are able to work, because if their medical condition deteriorates or
they otherwise lose their job, they will have to liquidate their retirement
accounts and pay penalties in order to qualify for Supplemental Security Income
and Medicaid benefits.
(6)The current treatment of retirement assets
discourages savings and work for disabled persons.
(b)The purpose of this
Act is to encourage retirement savings for all and promote work and
self-sufficiency for persons with disabilities by disregarding up to $75,000 in
retirement accounts when determining eligibility for benefits under the
Supplemental Security Income program.
2.Exclusion of
limited value of retirement plans under the SSI program
(a)
(1)Section 1613(a) of the Social Security Act (42 U.S.C.
1382b(a)) is amended—
(A)by striking
and
at the end of paragraph (14);
(B)by striking the
period at the end of paragraph (15) and inserting ; and
;
and
(C)by inserting after
paragraph (15) the following:
(16)the value of any plan, contract, or
account, described in section 401(a), 403(a), 403(b), 408, 408A, 457(b), or
501(c)(18) of the Internal Revenue Code of 1986, established for the benefit of
the individual, to the extent the aggregate value of all such plans, contracts,
and accounts so established does not exceed $75,000 (in the case of calendar
years prior to 2009) and the amount determined under section 1617(d) for the
calendar year (in the case of calendar years after
2008).
.
(2)Annual cost of
living adjustmentSection 1617 of such Act (42 U.S.C. 1382f) is
amended by adding at the end the following new subsection:
(d)(1)The Commissioner of
Social Security shall, on or before November 1 of 2008 and every calendar year
thereafter, determine and publish in the Federal Register a dollar amount for
purposes of section 1613(a)(16) for the succeeding calendar year. The amount
determined under this subsection shall be the amount in effect in the calendar
year in which the determination is made or, if larger, the product of—
(A)$75,000, and
(B)the ratio of—
(i)the Consumer Price Index for the
calendar year before the calendar year in which the determination is made
to
(ii)the Consumer Price Index for
2007,
with such
product, if not a multiple of $100, being rounded to the next higher multiple
of $100 where such product is a multiple of $50 but not of $100 and the nearest
multiple of $100 in any other case.(2)For purposes of this subsection, the
term Consumer Price Index
for any year means the arithmetical
mean of the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI–W) issued by the Bureau of Labor Statistics of the Department of Labor for
the 12 months in such
year.
.
(b)Section 1612(b) of such Act (42 U.S.C. 1382a(b)) is
amended—
(1)by striking
and
at the end of paragraph (22);
(2)by
striking the period at the end of paragraph (23) and inserting ;
and
; and
(3)by adding at the
end the following:
(24)the interest or
other earnings on the resources of the individual that are excluded by reason
of section
1613(a)(16).
.
(c)No requirement
To accelerate retirement paymentsSection 1611(e)(2) of such Act (42 U.S.C.
1382(e)(2)) is amended by inserting (except, in the case of a person who
has not attained 65 years of age, payments from a plan, contract, or account
referred to in section 1613(a)(16))
after 1612(a)(2)(B)
.
(d)The amendments made by this section shall apply to benefits
for calendar months beginning after the date of the enactment of this
Act.