More Bad News For The Social Security Disability Program?

The Social Security Disability Insurance (“SSDI”) program is struggling to stay funded.  Some reasons include the fact that future retirees fund the payments for its disabled predecessors. More and more preretirement baby boomers are aging and developing illnesses that prevent them from working. The Social Security Administration has also increased the full retirement age. In addition, the funding of the SSDI program is not keeping up with the costs associated with the program. Isolated cases of fraud have also not helped the situation.

 The Social Security Administration oversees both the retirement and disability programs. Historically, Congress has transferred money between the two programs to keep them both solvent. Allowing this reallocation means that both programs would remain solvent to approximately 2033. However, the 114^th Congress introduced a new House rule on January 6, 2015 that would make it difficult to reallocate funds to the SSDI program. This means the funds remaining in the SSDI program would be exhausted by 2016. Thus, SSA would have to cut SSDI benefits by almost 20% to deal with the exhaustion of SSDI funds. A reallocation would still be allowed if it was accompanied by a “change” that would improve the overall financial health of the Social Security system (likely meaning budget cuts or increased streams of revenue). However, such “changes” would undoubtedly result in other bipartisan disputes, making the “changes” condition seem rather impossible to satisfy.

 Time will tell what this new House rule will develop into. If we hear more information, we will certainly let you know. For more on this story, please read: http://www.latimes.com/business/hiltzik/la-fi-mh-on-day-onel-new-congress-launches-attack-on-social-security-20150106-column.html.

 Got a question about SSDI or SSI that you need us to answer? Please check out our website at www.westcoastdisability.com . We try to provide you with helpful information on our website that will allow you to successfully navigate the Social Security Disability process. Also, feel free to email me your questions at megan@westcoastdisability.com or call me at (800) 459-3017 x 103.