Budget negotiations will determine fate of shrinking rebate program for older Pennsylvanians

This story originally appeared on Spotlight PA.

An upcoming federal cost-of-living adjustment to Social Security benefits could shake up a state program that helps older and disabled Pennsylvanians pay their rent and property taxes.

Lawmakers have just a few months to pass legislation that would expand the shrinking rebate program.

On the campaign trail, Democratic Gov. Josh Shapiro promised to support such a measure, but the fate of any proposal depends on coming budget negotiations between the governor and the legislature.

The issue is not new to Harrisburg. As Spotlight PA has reported, the number of rebates paid out each year has dropped by more than 25% percent over the past decade. The main reason: The state legislature hasn’t updated the income limits for homeowners to qualify since 2006. For renters, the income limits haven’t changed since 1985.

Most people who are eligible for the state rebates also receive Social Security payments, which are adjusted each year to keep up with inflation. The state program doesn’t account for this. As a result, these routine Social Security increases can cause people who’ve been receiving rebates for years to suddenly find that their income is too high to qualify — even though their financial situation hasn’t really changed.

During his campaign, Shapiro proposed expanding the program to cover an additional 275,000 people — an increase of roughly 60% — and increasing the maximum rebate amount to $1,000. The estimated price tag for those changes is $400 million, which Shapiro previously said could be paid for with leftover federal pandemic aid.

For years, a handful of lawmakers from both parties tried to address the program’s declining numbers, but those bills mostly died in committee. In the current session, legislators have already introduced at least eight bills that would increase the income limits to qualify for the program, or ensure that recipients do not lose out because of Social Security cost-of-living adjustments.

The problem looms particularly large this year. In response to soaring inflation, the federal government approved a 5.9% increase in Social Security benefits for 2022 — the largest boost in 40 years. Unless the income limits for the state program are updated this year, that extra money will prevent many people who usually receive rebates from qualifying.

The state Department of Revenue, which administers the program, estimates that roughly 11,000 fewer people would receive rebates this year compared with 2022.

Virginia Kerr, 66, received a property tax rebate for the first time last year, a modest but welcome financial cushion, she said. This year, she worries that the Social Security cost-of-living adjustment could stop her from qualifying again. “These amounts are really not fair for seniors.”

Spotlight PA is an independent, non-partisan newsroom powered by The Philadelphia Inquirer in partnership with PennLive/The Patriot-News, TribLIVE/Pittsburgh Tribune-Review, and WITF Public Media.