Let’s take two identical people, Jane and Mary. Jane and Mary each graduate from college and get good jobs in the same city. Each earns $45,000 per year.
Jane goes on some trips, but tries not to spend too much. She uses frequent flier miles to go to Europe. She brings her lunch to work every day. She lives in a nice apartment, but it’s nothing fancy, and it’s definitely not her ideal. She buys decent clothes, but tries not to spend too much. She manages to save $10,000 each year. She puts most of her savings into a retirement account, and keeps some handy in a savings account, just in case she needs it.
Mary goes on a fancy vacation every year, spending as she pleases. She eats out all the time and goes to fancy clubs with high cover charges. She lived in a luxury apartment for a bit, but now owns a condo in a trendy neighborhood. She goes to the expensive department stores to buy high-end clothes and shoes. She keeps around $200 in her checking account. She doesn’t have any savings, but she doesn’t mind.
Now, Jane and Mary each get sick and have to stop working. They both apply for SSDI. Then they need to apply for other services too, like SSI and food stamps. Mary is able to apply for all of these but Jane is not eligible to even apply for SSI or food stamps. Why? Because Jane has savings!
You see, someone decided that to get a lot of federal and state services and aide, what matters is not only income, but also assets, but for some reason they do not count houses toward the asset limits. So Mary can get extra services that she can use to pay her mortgage, but Jane does not get these services to help pay her rent. Mary gets help buying food, but Jane does not get help buying food. Jane did what she was “supposed” to do – she saved for the future. Now, the government is telling her to spend down all of her hard-earned savings before she can get their help. And if she needs the money later? Too bad. To get help now, Jane needs to spend the money that she could otherwise use in a few years for extra medical bills, food, or clothes.
Now, suppose Mary and Jane both get these extra benefits, after Jane spends all of her savings. After a few years, Jane and Mary are ready to go back to work! Yay! Mary is back where she started (minus a few years of work experience.) On the other hand, Jane is now behind. In addition to the same lack of work experience, Jane has also spent her retirement and other savings, and now has to start over.
Guess who I am? Yup, that’s right. I keep discovering that there are all sorts of services I can’t get, or even apply for, because I have savings. Since they don’t look at real estate in calculating assets, I could take all of my savings and buy a house and then I’d get those services…. but I don’t want a house! Why should I have to spend down my hard-earned savings? I have spent my entire life (well, almost – I started saving when I was 10) building this up, and I resent being told that I’d get more help now if I’d wasted that money on martinis, fancy cars, designer purses, and the newest electronic gadgets. I understand that help should be reserved for only those who need it, but if a house isn’t counted towards assets, then I don’t think my retirement fund should be either. If they want me to spend down the money in my checking account, that’s annoying but fair. But my retirement account should be off limits!
Our system is broken in many ways, and I believe this is one of them. After all, if I need to spend more than SSDI provides for new sneakers, an umbrella, unexpected medications, or some other “luxury,” then wouldn’t it be better if I could spend my own money on it? It would sure be a better use of the cash than buying Hermes bags…. which I don’t even want.