Does Funding for Social Security Disability Benefits Face an Uncertain Future?

If you or a loved one currently receives Social Security Disability (SSD) benefits, you may be concerned about the future of the Security Disability Insurance (SSDI) fund.

In a report, "Projected Future Course for SSA Disability Programs," the Social Security Administration (SSA) states that the fund is heading towards insolvency by 2027. Scheduled revenue from taxes would only be sufficient to pay 75 to 80 percent of benefits after that, the report states.

The Washington Post reports that the disability insurance program is likely to run out of money much sooner - as early as the end of 2016.

The SSDI fund relies on workers making routine tax contributions into the fund. However, it is running out of money due to "the increasing number of beneficiaries relative to the number of workers paying into the system," according to the SSA.

A growing concern is that, unless enough people are paying into the fund, SSD benefits could be decreased. If this were to happen, it could prove devastating to families in West Virginia and across the country.

A Closer Look at the Disability Insurance Funding Problem

Existing SSD growth predictions indicate a 40 percent increase per 100 covered workers between 2004 and 2030, going from 4.8 to 6.8 per 100. The anticipated growth is more than double the dependency rate seen back in 1970, when fewer than three beneficiaries per 100 workers were receiving SSD benefits.

Another problem the DI trust fund faces is that income is expected to plateau, and then slightly decline. At the same time, projections indicate that expenditures and costs will continue to grow.

The DI trust fund has already passed the date (2014) when the SSA predicted outgoing expenditures would exceed income. By 2016, the cost rate for the DI program is estimated to be 2.05 percent, while the income rate will remain around 1.85 percent.

By 2027, when the DI trust fund assets are expected to be depleted, the program's cost rate is estimated to be 2.29 percent, with an income rate of 1.86 percent. The chart below indicates what may lie ahead.

Cost and Income Rates for the DI Program (as a percentage of taxable payroll)	Cost rate	Income rate
2005	1.83	1.82
2016	2.05	1.85
2027	2.29	1.86

What Is Being Done to Remedy the Social Security Disability Funding Issue?

In the past, short-term solutions employed by Congress to remedy dwindling funds have involved moving money between the DI portion of the SSD trust fund and the Old Age and Survivors Insurance (OASI) trust fund. However, the House recently adopted a rule that makes it more difficult for such reallocations to take place, the Washington Post reports.

Many suggestions are now being proposed on how to fix the SSD system and resolve funding issues. A few of the recent proposals include:

• A proposal by the Fiscal Times to improve incentives that encourage disability benefits recipients to return to work.
• Another suggestion, recently reported on by The Week, is to merge the DI and OASI trust funds into one fund so as to eliminate the need for temporary transfers and to secure solvency for Social Security until at least 2033. As both programs have basically the same goal - providing protection for those in need - a merging of the two programs would make financial sense, The Week states.
• Forbes has highlighted another proposal that involves raising taxes.

As you can see, all of these benefits have their positives and drawbacks. The key will be coming up with a balance between the interest of taxpayers and the needs of disabled Americans that depend on SSD benefits and other government-funded benefits for their survival.

A Solution Is Needed - SSD Benefits Are Too Important

At Mani Ellis & Layne, PLLC, we have seen first-hand the importance of SSD benefits to disabled recipients and their families in West Virginia. We believe immediate and careful attention needs to be paid to this issue so the right solution can be found.

Those West Virginia residents who have a genuine need for SSD benefits should not be deterred from pursuing them due to the current funding problem. If you believe you qualify for benefits, we believe it is crucial to take action today and to keep fighting until you are able to receive the benefits you deserve.

Our firm will continue to help those who need disability benefits in Charleston and across the state of West Virginia. If you need assistance with pursuing SSD benefits, contact us today.