Social Security Disability Fund Rescued, but Changes Coming

Posted on Oct 27, 2015

Congressional Republicans and the White House have struck a deal which will replenish the money in the Social Security Disability Trust Fund and avoid a nearly 20 percent cut in the benefits checks.  As we have reported in this blog in the past, a cut in benefits would impact the most vulnerable Americans—the disabled.

Social Security has two funds – one to pay old-age retirement benefits and the other to pay disability benefits. The fund for paying disability benefits was running dangerously low and was forecast to run out of money in late 2016. In the budget deal announced today, the Social Security Administration will be authorized to reallocate contributions going forward and increase the amount going to disability trust which is predicted to keep the fund solvent for the next seven years.

The White House has strongly advocated for shoring up the Disability Trust Fund and Congressional Republicans have been pressing for reforms in the program and tougher enforcement against fraud in the system.  Under the proposed budget deal, brokered by outgoing Speaker of the House John Boehner, there will be several changes to the system that the Washington Post says are “the biggest changes the disability insurance program will see for years.” The newspaper reports that this new bill “expands the use of investigation units that partner with local law enforcement agencies to track down people who might be gaming the system. It also forbids ex-felons from making disability benefits determinations, beefs up penalties for fraud, and instructs the Social Security Administration to move everyone onto electronic recordkeeping, in an effort to avoid overpayments.”

These changes to the disability system are expected to save nearly $5 billion over the next ten years, which is only a tiny portion of the $141 billion projected cost of the program over the same time period. Today’s news coming out of Washington of the compromise was a relief to the more than 11 million Americans who rely on relatively meager disability benefits for food, housing and, in many cases, for much-needed medications.

The proposals for the reallocation of funds into the Disability Trust Fund are part of a far-reaching budget agreement which will raise the debt ceiling, fund the federal government for another two years and avoid a government shutdown. The proposed budget deal will now move to the Senate and House for approval.

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Timothy J. Cuddigan
Omaha Social Security and Veterans Disability Lawyer With Over 40 Years Experience