Q: Should I worry about Social Security Disability benefits funds running out?
Applying for Social Security disability benefits is a complicated process made worse by the stress the disability itself puts on the applicant and their family.
In the face of serious financial burdens and needing to put forth the strongest application possible, many families wisely turn to experienced Social Security benefits attorneys to handle the initial application and/or appealing any denial of benefits.
But the application and appeals process is not the only thing causing disabled people stress. For decades, rumors surrounding the financial state of the Social Security system have many fearing their benefits will be reduced or disappear entirely at some point.
According to the 2017 annual report of the Social Security and Medicare Board Trustees, those concerns may be warranted.
Social Security is funded by payroll taxes and is paid out through two different trust funds. The one more widely understood is the retirement fund known as “Old Age and Seniors Insurance” (“OASI”) which most workers draw from upon their elective retirement usually after an uneventful lifetime of work. The other fund is the disability insurance fund. (In contrast, Supplemental Security Income (“SSI”), another government disability benefits program, is funded by US Treasury and other federal funds rather than payroll taxes.)
For decades, the number of workers far exceeded the number of retirees, keeping the funds solvent. However, advances in medicine extending life expectancy and the recent but massive retirement of baby boomers have upset the fund’s balance and financial security.
Here are some sobering projections from the report:
- OASI will be depleted by 2035 after which benefits will be reduced to 75% of expected benefits
- Disabled fund will be depleted by 2028 after which benefits will be reduced to 93% of expected benefits
- Medicare (the government health plan for those over 65 and for permanently disabled) Part A will be depleted by 2029 after which it would only pay 88% of expected benefits.
In the past, when faced with projected impending depletion projections, the government has responded with payroll tax increases, backed-up retirement age dates, and other measures to extend solvency– so panic at these recent projections may be premature.
There are many benefits to Social Security disability benefits and reasons why applying for SSDI may be advisable even if an employer or insurance company offers long-term disability insurance.
If you need assistance applying for, or appealing the denial of, Social Security disability benefits or have any questions regarding the benefits of Social Security disability, the Law Firm of Peña and Bromberg can help. Contact us for a free consultation.
From our office in Fresno, we represent veterans, disabled individuals and their families in Central Valley, California and throughout the United States.