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Property tax and rent rebate program will soon serve more older Pennsylvanians

The rebate program had not seen a full update since 2006 despite repeated bipartisan efforts to stem enrollment declines.

  • Charlotte Keith/Spotlight PA
The Pennsylvania Capitol building in Harrisburg.

 Commonwealth Media Services

The Pennsylvania Capitol building in Harrisburg.

Spotlight PA is an independent, nonpartisan newsroom powered by The Philadelphia Inquirer in partnership with PennLive/The Patriot-News, TribLIVE/Pittsburgh Tribune-Review, and WITF Public Media.

Thousands more older and disabled Pennsylvanians will qualify for help from a landmark state property tax rebate program, after Democratic Gov. Josh Shapiro signed a major expansion into law on Friday.

The program, which provides a partial refund on rent or property taxes paid the previous year, offers a financial cushion to some of Pennsylvania’s most vulnerable residents. But the number of people receiving the benefit has fallen every year since 2009, after state lawmakers failed to update the income limits to qualify.

The new law reverses that decline and seeks to prevent it going forward. An estimated 173,000 households will be newly eligible, while roughly 400,000 current recipients will receive a boost in the dollar value of their rebates. The income limits will also be adjusted for inflation each year to ensure that small, routine increases to Social Security benefits do not knock people out of the program — a major factor in the shrinking number of residents getting help.

For Shapiro, expanding the property tax and rent rebate program fulfills a key campaign promise. The changes represent “the largest targeted tax cut for seniors in nearly two decades,” he said before signing the bill at a community center in Scranton, calling it a “much-needed update.”

Despite reservations from some Republican lawmakers about the potential for automatic spending increases, the bill passed the state House with widespread bipartisan support and was unanimously approved by the state Senate.

The rebate program had not received a comprehensive update since 2006 despite repeated attempts by state lawmakers from both parties to stem the decline.

As a contentious budget impasse over school vouchers draws to a close, Shapiro said the expansion is an example of “what it looks like when Republicans and Democrats come together to actually get stuff done.”

Previously, the income cap to qualify was $15,000 for renters and $35,000 for homeowners. The new measure eliminates this disparity by raising the limit to $45,000 for both. (As before, the program’s rules only count half of someone’s income from Social Security benefits.)

The lowest-income households will be eligible for rebates of $1,000, up from $650, the previous maximum.

The law also resolves the mismatch between state and federal law that fueled the program’s waning usage.

The federal government adjusts Social Security payments each year to keep pace with inflation. Although most people who are eligible for state rebates also receive Social Security payments, the state program didn’t account for this. As a result, many recipients found that small cost-of-living increases to their Social Security benefits nudged their incomes over the limit to qualify for a state rebate — even though their underlying financial situation had not changed. The new law solves this problem by tying the income thresholds for the rebate program to inflation so that they will gradually increase over time.

The changes will not go into effect until next year. Until then, the downward trend in rebate recipients will continue. The state Department of Revenue, which administers the program, estimates that roughly 11,000 fewer people will receive rebates this year compared with 2022.

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