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  • Social Security's Disability Program Faces an Empty Trust Fund

    With continuing unemployment problems driving more and more Americans to seek Social Security disability benefits, that program’s already weakened trust fund faces a bleak future. Just as unemployed older workers have been forced to apply for Social Security retirement benefits much earlier than they expected, thousands of other unemployed people who have disabilities, or hope that they might qualify, are applying for Social Security Disability Insurance (SSDI) benefits.

    SSDI benefits are somewhat more generous than retirement benefits and turn into retirement benefits once the recipient reaches full retirement age. In addition, SSDI benefits allow the recipient to qualify for Medicare after two years, regardless of what age the individual has reached at that time.

    The influx of new recipients is draining SSDI’s trust fund much faster than expected. Last year, the program spent $127.7 billion in benefits, but only received $104 billion in SSDI payroll taxes. Since starting to run deficits in 2005, the SSDI trust fund has steadily declined, and it is expected to run out in 2017 or 2018. Assets could be transferred from the slightly healthier retirement and survivors program, but doing so would weaken a part of Social Security that faces its own crisis.

    To make matters worse, SSDI has a history of significant administrative problems, and applicants face long delays in getting a decision—even longer delays if they go through the appeals process—and differing standards for approval depending on what state they live in. About 40 percent of initial applications are denied, and while an appeal can be heard in Delaware a mere 10 months later, that same appeal may not be heard for 20 months in Ohio. Despite the continued efforts of the past several Social Security commissioners, it still takes more than 400 days (down from more than 500) to get a decision, and their success in reducing wait times is likely to be overwhelmed by the thousands of new applicants.

    Fixing the problem does not mean raising payroll taxes or spending more. SSDI is filled with picky bureaucratic requirements that delay decisions and tie the hands of appeals judges or bias their decisions. Really reforming the program is not simple, but it is not impossible.

    In July, Senator Tom Coburn (R–OK) issued a comprehensive program to reduce federal spending that includes detailed proposals (starting on page 532) for fixing SSDI, reducing overpayments, and making it easier for applicants to get an accurate decision in an acceptable time period. The latest news on SSDI confirms what we already knew—like its sister program, Social Security, it should be fixed through comprehensive reforms.


    Posted in Featured [slideshow_deploy]

    13 Responses to Social Security's Disability Program Faces an Empty Trust Fund

    1. Fedup says:

      This is certainly one program where drug testing should be required to qualify. We all have seen many people who are on SSDI that are addicted to alcohol and/or drugs. THAT should not qualify as a "disability!"

    2. Paul says:

      What's new. Since the beginning of Social Security new changes to it's initial purpose has destroyed the social security fund. We americans have been robbed by our U.S. Congress. The 2-party political system is an absolute failure. The U.S. Congress has destroyed everything Americans have worked so hard for all of their lives. Both political parties have destroyed our home values, our savings, our investments, our financial system and our good paying manufacturing jobs were sent to Communist China. Now, All we working americans are left with is high taxes, no jobs and big interest payments to China and Japan. P. Yandura

    3. Mike, Wichita Falls says:

      My 62 year old uncle is on SSDI due to a shoulder "problem". He seems to be living the good life in Florida in one of those HOAs. I don't know how much he gets from SSDI and how much from other retirement accounts. Why couldn't he have done some other kind of work until age 68 like his brother, my 63 year old dad, who is scraping by now, without any kind of welfare, after a divorce? If he hadn't told me his shoulder was bad, I wouldn't have known it. He was in construction, so a good shoulder is necessary, but is there really no other way to make a living?

      My parents and my in-laws are divorced and are less financially stable as a result. I hope SS is there for them, as promised, but the current structure, and political will to change it, leaves me little hope that I, along with their other kids, will not have to support them to the detriment of our own financial future.

      Thanks a lot, Uncle Sam, for making promises you can't keep just to buy votes. Shame on you! Big gov blames big corp, oil, food, bank, pharma, etc. for stealing the American dream, but the blame belongs solely to them.

      • The Truth says:

        What your forgetting is your Uncle had to pay into the system for at least 5 out of the last 6 yrs before he applied.The amount of his SSDI is based on what he paid into the SDI/FICA through his payroll! If was 100% S/E as say a Contractor he wouldn't qualify.Also if he also receives a pension, he has to pay Tax on both! Unless it's under 2k a month combined!(Your uncle is not rich) he's not living high off the hog! Most of the posts like yours are based on jealousy! If you were disabled, and thought you could qualify, believe me you would apply!

        Maybe he really can't find work!(Due to his disability)Is that not possible?

    4. YnotNOW says:

      What SSDI "Trust Fund"??
      The same as the SS Trust Fund, it consists of US Treasury Bonds -essentially IOU's from the Federal Govt. How Does SSDI tap these funds? It sells the bonds back to the US Treasury, which means the Treasury can pay with
      – taxpayer dollars
      – Borrow money (issue more Treasury Bonds to sell on the open market)
      – Print money
      Exactly the same as if there were no SSDI Trust Fund in the first place.

      So the SSDI is paid by general revenues, and any assertion that we are paying from a "Trust Fund" is an accounting fiction!

    5. Valard says:

      You state: "About 40 percent of initial applications are denied, " In fact, over 60% of initial applications are denied.

    6. Jeanne Stotler says:

      There are many on SSDI who should not be, I myself know a few who used it to quit work earlier than 62

    7. B. Patriotic says:

      Whatever happened to the death panels they talked about in 2008? think of all the money we could save by putting these people out of their misery. Especially the ones who are disabled from birth, can you imagine how much taxpayer money is spent on them for an entire lifetime? Most of these so called 'disabled' people are just plain lazy anyway. Look at Helen Keller and Stephen Hawkings. If they can be productive, why can't the rest of them be productive and get off the dole for god's sakes. And whatever happened to Soylent Green? We could solve our high food costs by using these people the death panel terminates and put them to good use. This would create jobs making soylent green,, lower food costs, and save tons of tax money which we could use to lower the taxes for the millionaires/billionares so that they could create more jobs. Lowering taxes for the rich hasn't worked the last dozen times we did it which means we should keep trying it because the law of averages is now on our side so it is bound to happen one of these times. So what do you say, you bleeding heart liberals? Are you ready to be patriotic and start thinking outside the box?

      • The Truth says:

        Oh it's Rush Limbaugh everyone! Yes he's the solution! B.Patriotic, U should apply for Disability.Obviously you have a mental defect!

    8. saveamerica says:

      the millions of ones against us are against human decency and personal dignity!! the government deprives it so the people deprived take advantage of the government dole!! Why can't the government respect 70% of immigrants and Muslims are equally human to have the ability to derive personal dignity to know their personal accountabilities and carry out their livelihoods accordingly without imposing on the rest of society or otherwise known as the government? Government controlled condescension! wonder about those the government deems less than human are proud to be nursing off that?

    9. edd says:

      wow, here i am just had 3 bilateral hip replacements and having lower back pain.knee problems mental issues from my injuries ,,tried getting workers compensation after fighting for 3years couldnt recover anything even with a lawyer,and a good firm that is supposed tobe one of the best in the country but i was told to apply for ssi,now if these company where in was injured would had payed for me when i got hurt i would have to apply for ssi this would take a punch at the social security system..

    10. While Social Security Disability, and in particular its need-based counterpart program SSI, has received attention recently related to investigations of recipients and judges on charges of fraudulent awards based on questionable disability situations, it is VERY important to remember that the disability programs operated by Social Security are the literal lifeline of many of our country's neediest individuals. When discussing so-called "entitlement" reforms, we must keep in mind that there is more to the equation than simple dollars and sense.

      Thanks for the article,

      Social Security Disability Help http://www.socialsecurity-disability.org

    11. Richard Hubbard says:

      All of the people I have met that are on disability are definetly scamming the system because they are LAZY. PERIOD. They fake their unability to work and it really pisses me off. No way they should transfer money from the real SSI to them!

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