House Bill 1247 – decreasing tax relief for the impoverished elderly and disabled

Added February 25th, 2011 by

Less than 10% of South Dakota elderly living below poverty level receive property or sales tax refunds.

South Dakota has a long-standing program that provides sales and property tax relief to the elderly and disabled poor.

However, because income eligibility is tied to a fixed dollar income (not a % of the federal poverty rate), the number of households able to take advantage of the program have eroded over time due to inflation.

Fifteen years ago the program was helping almost 5,700 households with almost $1.2 million of relief.   Now that relief has fallen over 50%, to $500 thousand, projected to help only 2,400 household in FY 2011. 

The average annual refund per approved applicant decreased 11.4% between 2002 and 2010 to $153. 

House Bill 1247 represents an additional 16.7% cut in the appropriations for tax relief for the impoverished elderly and disabled.According to census data South Dakota has over 12,000 elderly living in poverty – yet less than 10% benefit from this program.  The reason for decreasing participation appears to be related to the low eligibility guidelines for this state program, which are not automatically adjusted for inflation.

To be eligible, applicants must have an annual household income below $10,250 for single individuals and $13,250 for households.   This is below the Federal Poverty Level.  Over 80% of the applications denied for this program (1,663 applicants denied between 2002 and 2010) were denied based on income eligibility.

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