You may have heard on the news or different social media discussions about the Social Security disability “trust fund” becoming “bankrupt” or “insolvent” in 2016. Let me give you a small “breather” – this does not mean SSA will be unable to pay any benefits in 2016. But here is the significant kicker: unless Congress acts quickly, millions of disabled workers and their families will face nearly a 20% cut in their SSDI benefits in late 2016. A cut like this would reduce the average SSDI beneficiary to living below the federal poverty line.
To help you better understand how all this works: there are “two” Social Security Trust Funds which are treated as one trust fund (for purposes of this blog, I’m going to refer to both of these as “the Trust Fund.”) One is the “Old Age and Survivors Insurance (“OASI”) Trust Fund which, by its name can be explained, is for retired workers (old-age) and their spouses and children, and to survivors of deceased insured workers. The other is for the Social Security Disability Insurance (“DI”) Trust Fund which imparts benefits to disabled individuals. Both the OASI and DI programs are supported by taxpayer dollars under the Federal Insurance Contributions Act and the Self-Employment Contributions Act. In the past, Congress has simply adjusted tax revenues to maintain solvency in the Trust Fund. This has occurred 11 times and about equally in both directions. A 12th reallocation was foreseen by SSA Actuaries two decades ago. This action would keep both trust funds solvent until 2033. This is what I’ll refer to as a “Clean Reallocation.”
Right now, the DI share is only 1.8% of the current 12.4% percent Social Security payroll contribution. All Congress has to do is raise the DI share to 2.8% and only for two years, gradually reducing it back to 1.8% by 2025. So for example: if you receive a monthly paycheck of $1,000 — $18.00 of that currently goes to the DI share. If you raise the DI share to 2.8%, then $28.00 of your paycheck will go to the DI share – and only for two years, before it begins to reduce back down again to $18.00 each paycheck. That’s it!
Knowing how crucial this issue is to our clients and all social security disability claimants, three of our attorneys at Morgan & Weisbrod (including myself) lobbied on Capitol Hill in May of this year for a “Clean Reallocation.” Read about our trip here! The attorneys at Morgan & Weisbrod, L.L.P. will continue to zealously advocate Policy measures that protect our clients’ legal rights under the Social Security Act as well as fight for their rights in their individual cases.
This is an important Presidential Election year for disabled individuals. For this reason, we strongly urge you to find out who your U.S. Senators and Congressmen are and where they stand on this vital issue.
by Carl M. Weisbrod Managing Partner of Morgan & Weisbrod, Board Certified in Social Security Disability Law