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

This story first appeared in The Investigator, a weekly newsletter by Spotlight PA featuring the best investigative and accountability journalism from across Pennsylvania. Sign up for free here.

This story was updated on March 7 to include remarks from Gov. Josh Shapiro’s budget address.

Update, Aug. 4, 2023: Gov. Josh Shapiro signed a major expansion of Pennsylvania’s property tax and rent rebate program into law.

HARRISBURG — 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.

In his budget address Tuesday, Democratic Gov. Josh Shapiro proposed a major expansion of the program, but the fate of any proposal depends on coming 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.

In his budget address, Shapiro proposed boosting the dollar value of the rebates, increasing the income cap, and tying the income limits to inflation. This, he said, will ensure that Pennsylvania “never has to tell another senior, ‘Sorry, you’re out of luck’ because their Social Security payment went up and we didn’t act.”

All told, Shapiro said the changes would nearly double the number of people eligible for the assistance, as well as the amount they could receive. Expanding the rebate program was a key campaign promise for the governor.

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.”

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