SSDI recipients could soon see 20 percent cut to benefits amount

Imagine the following scenario. You're a working parent who is the main breadwinner and upon whose job your family relies on for medical benefits. Upon driving home from work one day, your car is hit by a semi. You suffer several serious and debilitating injuries including a traumatic brain injury. After months in the hospital, you go home and quickly realize that life will never be the same. Impacted by cognitive and physical disabilities, even everyday tasks are now a challenge and working and earning any type of income is out of the question. What happens to you and your family? How will you afford to live?

Social Security disability insurance exists for individuals who find themselves in this type of situation. In addition to providing financial support to those individuals who suffer debilitating injuries in accidents, SSDI benefits also provide monthly income to millions of Americans who are ill and who are born with or develop debilitating medical conditions. Despite the important role the SSDI program plays in helping millions of disabled Americans afford housing, food and clothing; the program faces an uncertain future.

Social Security retirement and disability benefits are funded primarily by business payroll taxesas well as taxes employees pay under the Federal Insurance Contributions Act. Reserves allocated for both Social Security programs accrue interest and remain in the respective trusts to provide benefits for future recipients.

However, if Congress fails to take action, the SSDI trust fund is expected to be depleted by 2017. A number of factors have contributed to the trust's depletion, many of which can be attributed to the recent difficult economic times. For example, during 2011 and 2012, Congress temporarily reduced payroll and FICA taxes in an effort to provide financial relief to struggling businesses and employees. Additionally, the number of SSDI recipients has increased in recent years as more women join the workforce and baby boomers age.

If members of Congress take no action to provide or reallocate funds for the SSDI trust, the monthly benefit amounts of SSDI recipients will likely be reduced roughly 20 percent. For anyone, a 20 percent cut in income would be difficult. For the millions of SSDI recipients who currently live under or close to the poverty line, such a cut will likely be devastating.

We'll continue to provide updates on the SSDI funding crisis and new developments.

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