Last week, the United States Supreme Court struck down the portion of the Defense of Marriage Act (DOMA) that defined marriage as between only one man and one woman. When it was in place, this section of DOMA meant that from the federal government’s point of view, only marriages between a man and a woman counted as a marriage for the purpose of a myriad of federal programs, including Social Security, Medicare and Medicaid health insurance programs, welfare programs, and immigration regulations. The Supreme Court’s decision means that same-sex couples that are married in states that recognize those marriages are now also considered married by the federal government.
While this is a significant victory for gay rights advocates, the effects of extending the federal definition of marriage to same-sex couples are not uniformly positive, at least from a financial point of view. Federal recognition of same-sex marriages will have a unique effect on a group of gays and lesbians not usually centered in the gay rights movement: those who are living in poverty and use federal public benefits to survive. For these people, the federal refusal to recognize same-sex marriage made it easier for them to qualify for means-tested public benefits and recognition may reduce their income still further, driving them further into poverty.
A wide array of federal public benefits are “means-tested,” meaning that eligibility for these benefits is conditioned on the income and assets of the person applying. These kinds of benefits include the federal Temporary Assistance to Needy Families (TANF) welfare program for households with dependent children, Social Security’s Supplemental Security Income (SSI) program for the elderly or people with permanent disabilities, and Medicaid, a health insurance program for the very low-income. When someone applies for any of these benefit programs, they must prove that their income and assets are below the regulatory cut-off level.
These cut-off levels are all at or below the federal poverty level, meaning that people eligible for these benefits are extremely poor. These benefits are also limited to the most vulnerable of the poor: those with dependent children, who are 65 or older, or have disabilities so severe they are permanently unable to work. Even if people receive these benefits, the benefit amounts are relatively low, meaning they usually continue to live at or below the poverty level. This means that the gay and lesbian people applying for or receiving these benefits are an extremely vulnerable group.
These means-tested programs have rules that if an applicant is married, a portion of their spouse’s income and assets is considered, or “deemed,” available to them. Because the program assumes the person has access to some of their spouse’s income and assets, that money is considered in their eligibility determination and counts against their cut-off level. Someone who would be financially eligible if only their personal financial resources were considered might not be eligible once their spouse’s financial resources are considered. This is precisely the problem now facing this group of low-income individuals in same-sex partnerships, whose marriages may cost them the public benefits they need to survive.
Not everyone in a same-sex partnership of these people would become ineligible if their marriages are recognized federally, nor if they choose to marry and become subject to these rules about spousal income and assets. Overall, we can expect about 2% of individuals in same-sex couples to lose their eligibility for federal public benefits once spousal deeming rules apply to them. For each individual, this represents an average yearly loss of $5,973 per person, either in cash benefits from the TANF or SSI programs or in the value of medical coverage received from the Medicaid program. For people living at or below the federal poverty level, this represents a significant loss in income. For a family of three living at the federal poverty level, this loss is nearly a third of their yearly income.
In theory, this financial loss may be offset by the potential financial benefits of marriage, which creates significant changes in income, estate, and gift taxes, health insurance, inheritance rights, parentage rules, survivor’s and worker’s compensation benefits, and more. But for the very low-income people we are talking about, many of these advantages may be irrelevant; couples without significant accumulated wealth will see little benefit from formalized inheritance rights, for example. Much of the financial impact of marriage for this group will come from changes in federal income tax, and it is difficult to anticipate whether those tax changes will help or hurt these couples.
Importantly, while some couples may choose not to get married in order to avoid the spousal deeming penalties, previous studies have found that the issue of benefits eligibility is rarely an important determinant of which couples do or do not choose to marry. Research on welfare recipients considering opposite-sex marriages has consistently demonstrated that the threat of losing benefits has only a small impact on an individual’s probability of marrying. For couples – gay or straight, rich or poor – money is rarely the most important consideration in deciding whether or not to get married.
But for gays and lesbians who receive these public benefits, the financial effects of marriage recognition will be significant, causing dramatic hardship for people already experiencing severe poverty. These are people for whom the loss of medical coverage means relying on local emergency rooms for treatment of their chronic disabilities, often requiring a 24 hour wait in a waiting room before being seen. These are people who can only afford to live with their children in apartments infested with cockroaches and mice, in illegally converted garages without plumbing or insulation, or in their cars. These are people who, no matter how creative they are with their food budget, run out of food before the end of the month, spending a week surviving on applesauce and crackers.
The other very important benefits of federal marriage recognition, including the symbolic value of having your relationship and commitment formally recognized by the government, will certainly apply to these people living in poverty. But while we celebrate the new right for same-sex couples to get that formal recognition, we should remember that this group of already vulnerable gays and lesbians may be forced to choose between that symbolic recognition and maintaining eligibility for the benefits their families need to survive. Moving forward, gay rights advocates must include voices from this group to ensure their unique needs are considered.
Photo by Fibonacci Blue, licensed under a Creative Commons Attribution 2.0 Generic license.