According to a recent Letter to the Editor in the Asbury Park Press, one Hurricane Sandy survivor and Social Security Disability Insurance (SSDI) benefits recipient makes a call to lift the income cap from the program funding tax.
As the author describes, he and his wife, both retired, had saved for years and created a sound financial plan. However, they never planned for anything like Hurricane Sandy. After having to spend most of their savings to rebuild their home, they would have not been able to survive without Social Security Disability Insurance benefits.
He describes SDDI as one of the most successful programs ever created by the United States government, but it is in trouble with respect to future spending cuts. He also claims anyone calling disability benefits an entitlement program is not telling the truth, as it is a program every worker pays into for the duration of their working life, so they can receive benefits should they ever become disabled. However, as this author was having his entire paycheck taxed, that is not true for other people who make more money.
There is a cap of $118,500, meaning everyone pays taxes on their first $118,500 of income toward Social Security Disability Insurance. Any money earned in addition to the cap is not subject to SSDI taxation. For most people who earn less than the cap, their entire wage is subject to taxation. For a person earning millions of dollars each year, only a very small portion of their income is subject to taxes to fund the SSDI program.
The solution he presents to this problem to make sure the program is well funded for the foreseeable future is simply to lift this cap and make the wealthy pay the same percentage of taxes as those barely making ends meet. While he is mostly focusing on Social Security Disability Insurance benefits, this same logic holds true for Supplemental Security Income (SSI) benefits and Social Security retirement benefits.
As our Boston disability benefits attorneys can explain, while people pay taxes to all three programs, the money is kept in separate funds as required by federal law, since the programs technically serve different purposes. While most people know the purpose of the Social Security retirement program, the SSI program is less well known. SSI is a federal disability program designed to provide income for disabled children in low income households and disabled or blind elderly Americans. There is not a requirement for beneficiaries to have a work history or to have ever paid taxes. There is, however, a requirement that any recipient meet strict income guidelines.
The Social Security Disability Income program, on the other hand, requires any claimant to have worked a certain number years broken down into quarterly credits prior to applying for benefits, and this is known as paying into the system. If a claimant has the required number of quarterly credits and disability or combination of disability conditions with agency guidelines, they should be able to qualify for SSDI benefits, though the application process is long and difficult, and claimants should consult with an experienced disability attorney.
If you are seeking Social Security Disability benefits in Boston, call for a free and confidential appointment at 1-888-367-2900.
LETTER: Eliminate the income cap on Social Security deductions ,April 15, 2015, Asbury Park Press
More Blog Entries:
SSDI Approvals Lowest in Five Years, June 20, 2014, Boston Social Security Disability Lawyers Blog