By Patricia Wen

A controversial federal benefits program provided about $20 billion to low-income families with disabled children over the last two years, quietly eclipsing traditional welfare programs to become the biggest source of monthly cash for the nation’s poorest families, new data shows.

The dramatic growth of the children’s Supplemental Security Income (SSI) program has led some researchers to suggest it has simply replaced welfare as a primary source of cash for many families who lost benefits due to the much-touted welfare reforms of the mid-1990s.

The expansion also comes amid a growing recognition among lawmakers and policy analysts that children’s disabilities, especially harder-to-assess ones like ADHD, have become a gateway to receive the best government cash benefits available today, and this trend deserves closer study.

“SSI is becoming a much bigger part of the safety net that serves low-income families,” said David Wittenburg, a senior researcher who studies disability programs at the independent research firm Mathematica Policy Research in Princeton, N.J. “It means we have to start thinking about that as a part of the whole system of supports that address poverty.”

In 2012, the SSI program for children paid out $9.7 billion, roughly $700 million more than the nation’s welfare programs, which have long given out the most cash for indigent children. Last year, the SSI program distributed even more, paying out about $10 billion, $1.3 billion more than the welfare programs.

The children’s SSI program now serves roughly 1.3 million youngsters, most of whom have behavioral, mental and learning disorders, and is passionately defended by its supporters as one of the last remaining programs for poor families that hasn’t yet faced draconian cutbacks on Capitol Hill.

It started in 1974 as a little-known program that served largely indigent children with severe physical disabilities and cash aid was meant to help parents who were prevented from working because of their disabled child’s needs.

The program nearly doubled its rolls in the past two decades, as it accepted broader definitions of what was a qualifying disability and as the nation’s welfare benefits shrunk. The children’s SSI program now serves six out of 10 children who qualify based on conditions such as Attention Deficit Hyperactivity Disorder, delayed speech in young children, autism spectrum disorders, depression, and learning problems.

Enrollment in the children’s SSI program still does not surpass the number of welfare cases, but because of SSI’s superior cash benefits of up to $720 a month per child, it now distributes more money.

Critics say the program, as it now operates, creates perverse incentives for poor families to obtain – and maintain – disability diagnoses for their children even when symptoms may improve. The program, they say, has become an alternate welfare system without the work requirements and time limits that were hallmarks of the 1996 welfare reforms that passed with bipartisan support and hailed as one of President Clinton’s signature achievements.

In some states, particularly in the South where state welfare benefits are more limited, SSI enrollments for children have surged.

A Cornell professor of policy analysis, addressing an Institute of Medicine panel in Washington D.C. last month, invoked the Hippocratic Oath in calling for bold reforms to the SSI program. “Doing nothing will cause harm,” Richard Burkhauser told the group of about a dozen pediatricians, child psychiatrists, and public health experts, which is studying the rise of mental disability cases on the children’s SSI rolls.

Others have said they are disturbed to see that some teenagers on SSI avoid part-time jobs, worried their pay stubs will bump their family into a slightly higher income category that jeopardizes — or reduces — their cash benefits.

These issues, among others, were detailed in a three-part Boston Globe series in 2010 about the children’s SSI program. Officials from the Social Security Administration, which administers SSI, later approved $1.1 million to fund a study of the program by the Institute of Medicine, the nonprofit health research wing of the National Academy of Sciences.

But supporters of SSI say it is a well-managed critical lifeline for poor families raising disabled children. They note that the program rejects more applicants than it accepts and that eligible children must show “marked and severe” limitations. Its current enrollment represents about 2 percent of all American children.

Kathy Ruffing, senior fellow at the nonprofit Center on Budget and Policy Priorities, said SSI has introduced programs to encourage parents and teenagers to work and exempt some income when calculating benefit amounts. She said the criticism that SSI discourages parents and teenagers from working is “overstated.”

Supporters say the program’s expansion largely reflects the nation’s growing sophistication in detecting disabilities in children, especially behavioral, emotional and mental disabilities. They say indigent parents of disabled children — some struggling to maintain jobs amid their child’s emergencies – need extra income to provide basic needs.

“Cash is what actually matters for these families, as a baseline, before you can even start talking about supports and services,” said Rebecca Vallas of the Center for American Progress, a nonprofit think tank, at the Institute of Medicine hearing.

SSI payments are higher – and generally longer lasting and more flexible – than welfare. Of the 1.3 million children on SSI, the federal government pays on average $640 in federal funds a month for each child who qualifies, and the overwhelming majority receives the maximum $720 monthly payment per child.

Also, more than one child per family can qualify, and parents with disabilities can also receive aid through the adult SSI program.

Once recipients are enrolled, disability examiners are supposed to re-evaluate their cases every few years to see if they have improved and no longer qualify, though those reviews are frequently skipped, data show.

About 1.6 million households receive welfare benefits under a program known as Temporary Assistance for Needy Families (TANF). Households receive on average about $450 a month, with huge variations state to state that can more than halve or double that amount.

The disparities exist because, under welfare reform, each state determines how much of their total welfare funds is used for cash aid to families and how much supports other programs for struggling families, such as child care and job training. Last year, federal and state funds under the TANF program totaled about $32 billion, of which on average about 25 percent was allocated toward cash benefits.

The discretion given to state authorities has resulted in vast differences in the maximum welfare payments families can receive in different states, ranging from $170 a month in Mississippi to $923 in Alaska, according to 2012 data from the Urban Institute, a nonprofit research group that studies social policies.

And, many states that offer lower welfare payments have higher SSI caseloads for children, underscoring critics’ concerns who say SSI is becoming the alternative welfare.

For instance, in Texas, where maximum monthly welfare benefits in 2012 were relatively low at $260 a month for a family of three, there were about 144,000 children receiving SSI, three times as many families receiving welfare payments. (SSI accepts cases per child, while welfare accepts cases by household.)

But in Massachusetts, which pays a maximum welfare benefit of about $630 for a family of three, there were about 50,000 households on welfare, more than twice as high as the number of children on SSI.

Elizabeth Lower-Basch, policy coordinator for the Center for Law and Social Policy, an advocacy group for low-income families, said the state-to-state disparities in SSI participation mayhave something to do with each state’s network of legal aid lawyers, disability advocates, and social service workers, and the degree to which they help poor families navigate the complex SSI application process.

States have an incentive to get a welfare-receiving family, with a disabled child, onto the SSI rolls. If that family drops welfare for SSI, the states save money because SSI is virtually entirely funded by the federal government with no matching state amount needed.

Some public policy analysts say the country’s two major cash assistance programs for poor families ought to be working together, perhaps on the state level, as they largely serve similar low-income families that struggle with physical and psychological issues and are typically headed by single mothers.

Wittenburg of Mathematica said he wants to see greater focus on ensuring that youth on SSI get work training and experience, helping them toward a life of “long-term independence.” He said more than six out of 10 teenagers on SSI qualify for and receive cash benefits in the adult SSI program when they turn 18.

Dr. James Perrin, a pediatrician at Massachusetts General Hospital and a member of the Institute of Medicine panel studying mental disorders among children on SSI, said he recognizes his panel is being given a special opportunity to address important issues around this program.

The group is scheduled to release its report by early next year. “If we’re spending $10 billion a year,” Perrin asked, “is this the right way to spend it?”