Disability benefits have become an increasingly prominent source of cash assistance for impoverished American citizens over the past two decades. This development coincided with cuts and market-oriented reforms to state and federal welfare programs, characteristic of the wider political-economic trends collectively referred to as neoliberalism. Recent research has argued that contemporary discourses on ‘disability fraudsters’ and ‘malingerers’ associated with this shift represent the latest manifestation of age-old stigmatization of the ‘undeserving poor’. Few studies, however, have investigated how the system of disability benefits, as well as these stigmatizing discourses, shapes the lived experience of disabling physical illness in today's United States. Here we present qualitative data from 64 semi-structured interviews with low-income individuals living with HIV and/or type 2 diabetes mellitus to explore the experience of long-term, work-limiting disability in the San Francisco Bay Area. Interviews were conducted between April and December 2014. Participants explained how they had encountered what they perceived to be excessive, obstructive, and penalizing bureaucracy from social institutions, leading to destitution and poor mental health. They also described being stigmatized as disabled for living with chronic ill health, and simultaneously stigmatized as shirking and malingering for claiming disability benefits as a result. Notably, this latter form of stigma appeared to be exacerbated by the bureaucracy of the administrating institutions. Participants also described intersections of health-related stigma with stigmas of poverty, gender, sexual orientation, and race. The data reveal a complex picture of poverty and intersectional stigma in this population, potentiated by a convoluted and inflexible bureaucracy governing the system of disability benefits. We discuss how these findings reflect the historical context of neoliberal cuts and reforms to social institutions, and add to ongoing debate around the future of public social provision for impoverished and chronically ill citizens under neoliberalism.