The First Circuit court ruled last Friday that the federal government cannot exclude Puerto Rico from Social Security Supplemental Security Income (SSI) payments.
In its opinion, the court cited longstanding precedent holding that the U.S. is allowed to treat territories differently from states as long as there is a rational basis for the difference. In this case, the government argued two primary reasons as to why it is “rational” to leave Puerto Rico out of SSI benefits, both of which the court ultimately rejected:
- Puerto Ricans don’t pay federal income tax.
- Including Puerto Rico would be costly.
To the first point, the court noted that Puerto Ricans do pay federal taxes, and that “any individual with earnings low enough to qualify for SSI will not be paying federal income tax regardless of where they reside.”
To the second point, the court responded that the Fifth Amendment of the Constitution doesn’t allow the government to discriminate against Puerto Rico in order to save money.
The lack of SSI coverage is just part of the inequality in Social Security benefits Puerto Rico has faced for decades.
Inequality in the SSI Program
Social Security Supplemental Security Income (SSI) is for very low income individuals over 65 or who have a permanent disability, including blindness.
Instead of SSI, Puerto Rico is currently covered by the U.S. Health and Human Services Department program called Old-Age Assistance, Aid to the Blind, and Aid to the Permanently and Totally Disabled (AABD). This program was the precursor program to SSI. The fifty states and D.C. qualified for SSI when it was enacted, but Puerto Ricans were left out of the new – significantly more generous – program.
While SSI payments average $438.05 per month, payments under the legacy AABD program in Puerto Rico run just $73.85 per month.
The Northern Mariana Islands, also a U.S. territory, receives SSI.
A 2014 Government Accountability Office (GAO) study on how Puerto Rico statehood might affect federal programs examined possible costs for the year 2011. In the study, GAO estimated that the SSI program would provided $1.5 billion to $1.8 billion to Puerto Ricans had the U.S. territory been a state. AABD cost just $24 million.
GAO also held that 305,000 to 354,000 Puerto Rico residents would have been served by SSI if it applied to Puerto Rico. Only 34,401 residents were enrolled in Puerto Rico’s AABD program that year.
Extending SSI coverage to Puerto Rico could indeed be costly for the United States. However, the court made it clear that the cost of covering any particular jurisdiction – whether a U.S. state or a territory – is not a valid argument against providing a federal benefit.