Social Security Disability Insurance (SSDI) was created in 1956 to provide financial assistance to people unable to work because of severe health issues.
Fast forward to 2014 – More than 11 million Americans rely on Social Security Disability Insurance (SSDI). Many of the beneficiaries reply on this program (funded through the federal payroll tax) for a significant portion of their income – averaging $1,129.51 per month.
What would happen to this 11 million+ Americans if this program ceases to exist? For many, this income helps pay for rent/mortgage, food, medical supplies and expenses. Without it, those who are disabled (with no ability to obtain gainful employment) would be in a dire situation. What could they do to replace this loss of vital income? For many, the only option would be family and friends, of which many would be in the same situation.
The Fiscal Times offers insight to the future of this benefit for those in need.
Since 2000, SSDI beneficiaries have increased by 73 percent. Experts from the Federal Reserve Bank of San Francisco attribute that partially to population growth, but they also note “disability insurance caseloads as a share of the population age 20 to 64—known as the disability recipiency rate—also have risen rapidly over the past several decades.”
According to the Social Security Administration, spending on the program has more than tripled since 1983 from $43 billion to $139 billion, adjusted for inflation. It now accounts for about 20 percent of the Social Security Administration’s total budget.
According to The Fiscal Times, “The program has swelled in recent years—with rapid growth driving it full speed ahead to insolvency”. The government has paid out more than it has taken in every year since 2009, according to the Social Security Board of Trustees.
How is Congress going to fix this dwindling fund? With its rapid increase since 2000, what does the near future hold for those in need? Will Congress FIX the problem as they did in 1994, or will the SSDI speed ahead to insolvency? For years, the Social Security Administration has warned lawmakers that unless they do something soon, the entitlement program for disabled workers will run out of cash by 2016.
Two years from now! In its most recent report, the Social Security Board of Trustees suggests that one way of doing this would be to raise the federal payroll tax. We all know this is not a popular option! The more likely option is to reallocate funds from other Social Security programs, like Old Age and Survivors Insurance- the much larger-known Social Security insurance plan for the elderly.
Congress has used this option at least 11 times since Social Security was enacted. The agency says both programs taken together will be solvent for at least two more decades.
Interesting information to absorb – especially for the recipients of the Social Security Disability Insurance (SSDI) program.
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