A Targeted Minimum Benefit Plan: A New Proposal to Reduce Poverty among Older Social Security Recipients

Abstract

In recent years, the big news in Social Security reform has been the program’s fiscal concerns. In light of concerns about both program costs and benefit adequacy, we propose an effective and relatively inexpensive targeted program to provide a minimally adequate floor to old-age income through the Social Security system. This minimum benefit plan would provide a cost-effective method for reducing elder poverty to very low levels. A key element is that the benefit would not count toward income eligibility thresholds for other social programs. Other aspects include an income-tested benefit that would bring beneficiaries to 100 percent of the poverty threshold; application by filing of a 1040 income tax return; and setting of benefit levels and distribution through the Social Security Administration.