In 2016, millions of disabled Americans may suffer the devastating effects of a depleted Social Security Disability Fund. According to recent reports, 11 million people face deep, abrupt cuts in disability insurance benefits in late 2016 if Congress fails to replenish Social Security’s disability trust fund, which is quickly running out of money. The trustees of Social Security said the trust fund would be depleted in the last quarter of next year. This means that benefits to disabled Americans will be cut by 19 percent because revenues would only cover about 81 percent of the scheduled benefit payments.
How Does Social Security Disability Work?
Social Security Disability Insurance (SSDI) falls under Title 2 of the Social Security Act. SSDI provides disability benefits to those who have earned sufficient work credits to qualify. Social Security Disability Insurance is paid out of the Social Security Trust Fund. The SSDI program began as an early retirement program at a time when the only benefit offered by Social Security was retirement. Now, 15 cents of every Social Security tax dollar goes toward the disability trust fund rather than the retirement trust fund.
The Potential to Devastate Families
For those who receive Social Security Disability benefits, about 11 million Americans, those benefits are crucial when it comes to making ends meet. In many cases, for these individuals who are unable to work due to a disability – be it physical or mental – Social Security represents their only source of income. A majority of these individuals collect only $14,000 a year, which is barely enough to survive.
The cuts that come in late 2016 would reduce that amount to around $11,350. This funding shortfall has been anticipated for a long time now, but not much has been done to prevent it. If there is no reform in this area, disability benefits may be the first to get cut followed by Medicare and retirement benefits. This will leave a number of families financially devastated.
The Dire Need for Change
We have had no serious reform in Social Security for more than three decades. Although Democrats and Republicans oppose the cuts, it is unclear if they will find a solution together. With more and more baby boomers aging and retiring, there is simply not enough revenue from payroll taxes to cover the benefits. Our legislators and policy makers cannot afford to waste time on this issue.
That would mean allowing millions of Americans and their families to go without the benefits and assistance they desperately need and are entitled to get. We hope policy makers prevent these dire cuts and devise long-term strategies to protect the future of disabled Americans.
The experienced Rhode Island Social Security Disability lawyers at d’Oliveira & Associates are committed to assisting each and every one of our clients receive the benefits they are entitled to so they can live their lives with the quality care and peace of mind they deserve. Call us at toll-free at 1-800-992-6878 for a free (no obligation) case evaluation.