Aged Poor, Disabled to Lose Benefits Raise : Income: $17-a-month federal cost-of-living increase will be wiped out because the state will reduce its contribution.

The aged poor as well as blind and disabled citizens of California will not receive a cost-of-living increase in federal benefits next year even though the federal government will provide an extra $204 per person, officials said Tuesday.

Instead of passing along the $17-a-month increase in federal benefits, California will reduce its own contribution to the 849,000 poor people in the program. The savings will be applied to the state budget shortfall.

California apparently is the only state that will not use the federal increase in Supplemental Security Income to provide bigger benefit checks, a Social Security Administration spokesman said Tuesday. The maximum benefit check in California will remain unchanged at $704 a month for the blind and $630 for the impoverished elderly and disabled.

The state will save $58 million by reducing its contribution to the total benefit program when the federal payments increase in January.

“The decision was part of the budget compromise worked out between the governor and the Legislature last summer to deal with the gap between available revenues and projected expenditures,” said Theresa Parker, a spokesman for the state Department of Finance in Sacramento.

The state’s summer budget compromise included legislation suspending the automatic inflation adjustment in all California health and welfare programs. It is the first time in a decade that Californians enrolled in welfare programs will not get a cost-of-living increase. The federal government does not provide any automatic increases for welfare programs such as Aid to Families With Dependent Children.

The SSI benefit is available to people over 65, the blind and the disabled. To qualify for the grants individuals must have incomes of less than $630 a month, or $1,117 for couples. Beneficiaries are permitted to have savings of as much as $2,000 for an individual and $3,000 for a couple.

The benefits normally increase each January to keep pace with the cost of living. But the increase granted by Washington will be wiped out by the reduction ordered in Sacramento.

Currently, the maximum grant for an an aged or disabled individual in California consists of $386 from the federal government and $244 from California’s state supplemental program.

In January, the federal payment rises to $403, but the state contribution will drop to $227, leaving the total check unchanged.

But the recipients actually will lose more than $17 a month. The state usually grants a cost-of-living adjustment based on the full benefit check--the combination of federal and state contributions.

The state measurement of inflation, known as the California necessities index, called for an increase of 4.62%. Applying this adjustment to the $630 benefit would yield an increase of $29, according to the Finance Department. The top benefit would have climbed to $659 a month in January if the automatic increases had not been suspended.

The Legislature and the governor will decide next year whether to restore the inflation adjustment for 1992.

The federal Social Security Administration mails the monthly benefit checks to Californians. “We’ll be sending notices to all recipients in California notifying them of the effect of the state’s decision on their benefits,” said Phil Gambino, a spokesman for the Social Security Administration.

California generally has kept pace with inflation over the years in its supplemental benefits for the poor, according to Ron Pollack, executive director of Families USA, an advocacy group for the elderly poor.

“California has done better than most states, which have fallen behind enormously in having state supplements keep up with inflation,” he said.

But the freeze in benefits means that “California will start to fall behind,” he said. “The lowest-income seniors and others receiving benefits are going to be in a worse situation. They face higher costs with the same amount of income. They will be in much worse shape in paying for necessities.”