Age-Restricted Benefits, and the Lifecycle of Need

Age is the most simple and most common of the criteria used to restrict eligibility. In 1998 about one-third of all public spending was on services that were available exclusively, or primarily, to the young or old, regardless of their income or other circumstances. These include elementary and secondary education (10.9 percent), social security for the retired (11.2 percent), Medicare (6.6 percent), and public higher education (3.9). Public higher education is theoretically available to everyone, but in practice is used primarily by the young. Social Security is only available to those 62 and over, Medicare to those 65 and over, and their share of public spending is going to soar in the next few decades. While the rules vary, one typically becomes ineligible for public elementary and secondary education after a certain age, typically age 21, even if one had not finished high school. There are additional services restricted to the young and old, such as senior citizens centers, and youth day camps and recreation activities, but spending on them is not tabulated separately from other, similar activities. These services may be enough, however, to increase the overall share of public funding allocated to age-restricted services and benefits to one-third of all government funding. Public education for the young and retirement income and health care for the elderly, along with the military and interest on federal, state and local public debts, are the most costly public programs. The age-restricted programs are also the most popular, for four reasons, discussed below.

First, most people accept that children and the elderly deserve special assistance and consideration. For everyone, healthy adulthood is bordered on each side by helplessness. One of the main functions of the government is to collect resources, in the form of taxes, from healthy, working adults and transfer them, in the form of public services and benefits, to the elderly and children, and to those who care for them. So while most adults do not benefit from Social Security or public schools, they generally have parents, grandparents, or children who do. A family, as well, transfers resources – time, work and money – from healthy working-age adults to the elderly and children. The equity issues on the border between social obligations and family obligations to the young and old is a different discussion, a major one in itself.

Second, age-restricted public services are not just for one’s parents and children. They are for one’s self. An adult may not be receiving age-restricted services and benefits today, but he or she probably did receive them during childhood, and expects to receive them later in old age. One receives these services at one point in the lifecycle of need, and pays for them at another. Only a hypocrite would resent the burden of paying for services for others that he had enjoyed in the past, or expects to enjoy in the future. Both this expectation and the equity of age-restricted services, however, depends on a pact between the generations, with each being willing to shoulder its share of the burden during its healthy, working adulthood to provide greater or equal benefits to those who came before, and to those who will come after. The current status of that link, the “generational equity” issue, is also a major, separate discussion in itself.

Third, age restricted benefits are, in a sense, nearly as universal as a public sidewalk. Virtually everyone who is theoretically entitled to receive them actually does. Just about everyone age 65 and over receives social security and Medicare. Public schools educate 89 percent of school-aged children, and public universities educate 78 percent of those in college. No inside information is required to access these public services, since everyone knows about them; there are few applications, and no waiting list. While only 35 percent of all Americans benefit from these services, therefore, almost everyone does at one point or another. Money spent on public schools, public universities, social security and Medicare is not thought of as money spent on “special interests,” or on people working the system. These are government functions in support of everyone, and are therefore thought of as “fair.”

Finally, age-restricted benefits are difficult to scam, and very few people who are not entitled receive them. There are exceptions. There were news reports in prior years of dogs and dead people “receiving” social security checks that were cashed by others. There was a news report of an adult who was arrested for attending high school by impersonating a teenager. Such cases are rare, however, for two reasons. First, one’s age is not subjective. One is born on a given date, it is a given date today, and the difference between the two is one’s age. One cannot otherwise justify, and does not have to otherwise justify, his or her right to receive age-restricted public services. And second, one’s age is difficult to fake. The birth certificate, the basic proof of age, is a fairly reliable public record, and personal appearance is a fairly reliable check on it. There is an upfront industry – cosmetics – to make the old look younger, and an underground industry – fake I.D.s – to make the young appear to be older. One could attempt the reverse, but for only so long.

The key question for age-restricted benefits is one of generational equity. It is widely understood that those generations paying for Social Security and Medicare today, and those that follow, will get much less than those receiving these services today, after paying much more for them. In fact, it is virtually inevitable. But that hasn’t stopped those generations now in charge from demanding more senior citizen benefits for themselves, such as the recently enacted prescription drug benefit for Medicare, and deferring costs to the future, through rising public debts. Educational services for the young have also expanded, with kindergarten moving to full day and pre-kindergarten being added in some places. But this only offsets, in part, the need for both spouses in a two-income couple to work, in part due to the much higher payroll taxes in effect since 1983. The current generation in charge will have a lot to answer for, and is deferring providing those answers as long as possible. But it is possible, however, that some time the future age-restricted benefits, and those who receive them, will be about as popular as welfare and its recipients were in 1995.

I’ll write more about generational equity issues some time in the future. But let’s move on to other far more controversial types of public spending and eligibility criteria, in the next two posts.