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Time Is Running Out for Social Security Disability Funding

Time is running out for Social Security Disability Insurance (SSDI). The Social Security Administration (SSA) is nearing a fiscal cliff. By fourth quarter 2016, nearly 9 million Americans will have their benefits cut by as much as 20 percent. Congress needs to act now.

These are just some examples of the headlines we have seen over the past several months predicting a budgetary crisis to the Social Security Disability Insurance and Supplemental Security Income (SSI) programs. Let’s move beyond the “Sky is Falling” headlines and identify the real problems.

In 2014, the Social Security Trustees released their annual report.

This report claimed there will be no major change in the number of people retiring or the number of people claiming disability benefits in the near future. In other words, demand for Social Security will not change much. However, the report concluded the Old-Age and Survivors Insurance (Social Security retirement fund or “OASI”) and the Disability Insurance (DI) fund will both be exhausted by the year 2034, as reported by Market Watch.

Though the two funds are combined to make that estimate, they are actually separate funds. The OASI fund is expected to become exhausted in 2034, and the disability insurance fund is expected to run out in late 2016.

This is the fiscal cliff everyone is talking about. While SSA administers both funds, Congressional mandates require the money to come from two separate funds, and SSA cannot just borrow from one fund to pay the other.

This is not to say that can’t happen, because Congress can allocate money from one fund to the other, as they have done time and time again throughout the roughly 60 years the programs have been in existence. It just means SSA cannot do any allocation of the funds without authorization from Congress.

As our Boston disability attorneys can explain, this restriction comes from a series of laws governed by Congress known as anti-deficiency legislation. The United States government can keep spending when there is a deficit, but individual agencies cannot.

If the fund is not fixed soon, there will be an immediate reduction in Social Security Administration’s disability fund budget of around 20 percent. This is why those already receiving SSDI benefits could have up to a 20 percent reduction in benefits they are currently being awarded.

There are a lot more Americans receiving Social Security retirement benefits than disability benefits. In fact, if one year of retirement budget were shifted to the disability fund, this would allow the disability program to run at full strength for 17 more years, while only reducing the retirement budget by one year. This sounds like an obvious solution. This is also what Congress has done in the past when this problem occurred.

What makes matters worse is the Social Security Administration’s disability insurance fund budgetary shortfall is perfectly timed with an upcoming presidential election, and politicians are using this as an opportunity to bash the program and get on TV, rather than fixing a program which millions of Americans desperately need to take care of themselves and their families.

If you or a loved one is seeking Social Security Disability Insurance in Boston, call for a free and confidential appointment at (617) 777-7777.

Additional Resources:

Social Security disability fund will run empty next year ., , April 4, 2015, Market Watch
More Blog Entries:
Rand Paul Says Many Receiving SSDI Benefits Gaming System, Jan. 27, 2015, Boston Social Security Disability Insurance Lawyer Blog

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