Text: H.R.3696 — 110th Congress (2007-2008)All Bill Information (Except Text)

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Introduced in House (09/27/2007)


110th CONGRESS
1st Session
H. R. 3696

To exclude the first $75,000 of the value of retirement plans (adjusted annually for cost of living) in determining eligibility for, and the amount of benefits under, the supplemental security income program.


IN THE HOUSE OF REPRESENTATIVES
September 27, 2007

Mr. Lewis of Kentucky introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To exclude the first $75,000 of the value of retirement plans (adjusted annually for cost of living) in determining eligibility for, and the amount of benefits under, the supplemental security income program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Findings and statement of purpose.

(a) Findings.—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) Statement of purpose.—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.

SEC. 2. Exclusion of limited value of retirement plans under the SSI program.

(a) Resourse exclusion.—

(1) IN GENERAL.—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 ADJUSTMENT.—Section 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) Income exclusion.—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 payments.—Section 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) Effective date.—The amendments made by this section shall apply to benefits for calendar months beginning after the date of the enactment of this Act.