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Social Security Disability Cuts Proposed in 2016

| Jan 25, 2016 | Social Security Disability |

Washington insiders suggest that Social Security Disability benefit cuts are likely on the way. Social Security has always been a hot debate topic and cuts to the program are often discussed. In recent months, the future for those receiving benefits has been in question. The results from the annual review of the Social Security program are in and the disability programs appear to be in the most danger.

What is Social Security Disability Insurance?

The Social Security Disability program is one of the largest of the Federal programs designed to provide assistance to people with documented disabilities. Social Security Disability Insurance provides financial benefits to disabled individuals, along with certain family members, if enough work has been completed, and enough Social Security tax paid, to qualify.

The program is funded by taxes paid by American workers. These funds are placed into an account, referred to as the Social Security Disability Insurance Trust Fund. For many years, this fund has been in deficit, so the Federal government has been forced to place dollars from other sources into the account, in order to pay monthly benefits to all recipients. Unfortunately, there are not enough paying workers available to adequately fund all of the recipients.

The Social Security disability insurance program acts as a lifeline for many families who are struggling to get by after someone has been diagnosed with a disability that prevents them from working. The amount that a person receives is based on several factors and several “work incentives” exist to promote the continuation of work, on a limited basis, after a person has become disabled. The application process can be lengthy, and though millions rely on benefits, many more are denied.

The Proposed Cuts

The latest version of the Social Security trustees report suggests that without swift intervention by Congress, Social Security disability beneficiaries could see a nearly 20 percent cut to their payments at the end of 2016. Though recent short-term actions have been taken, the future path of the program is still very much up in the air.

The disability trust fund will be depleted by the end of the year, leaving enough funding to cover just 81 percent of benefits. The Social Security program has been the subject of debate for some time and the proposed cuts don’t come to a surprise to many disability advocates, lawmakers and social security disability lawyers. Unfortunately, without a viable solution proposed by Congress, the cuts seem imminent.

Who will the Cuts Impact?

Cuts to the Social Security disability program would affect nearly all of the 10.9 million Americans receiving benefits. In 2015, the average amount received by a Social Security disability insurance beneficiary was $1,165 per month, with some recipients receiving up to $2,663. While experts are urging beneficiaries not to panic, they also stress preparedness. A nearly 20 percent decrease in benefits could necessitate careful financial planning on the part of recipient families.

The Inevitability of Cuts

Even with expected reforms, any fix will likely be short-term. No significant Social Security reforms have been put into place since the 1980s, and the depletion of the retirement trust is anticipated by 2035. The ever-increasing size and cost of the program makes future cuts almost inevitable. How Congress will proceed in 2016 and beyond is still up in the air, but change is certainly inevitable.

Cuts to the Social Security disability insurance program present a frightening prospect to those who rely on benefits. It’s important to note that while cuts might be on the horizon, this does not many that any one recipient will completely lose their benefits. It does, however, mean that some recipients could be facing a significant cut to the amount received monthly.

Preparing for the Future

With elections taking place in 2016, many long-term solutions could be proposed. The hurried pace of the election year could also delay talk of permanent Social Security reforms. Those who receive, or are in the process of applying for, Social Security disability insurance benefits should pay close attention to the continuing debate.

How any future cuts will impact those applying for benefits is yet to be determined. Being approved for Social Security disability insurance benefits is notoriously difficult. The Social Security Administration adheres to strict definitions of disability, which must be adequately proven, in order to qualify.

Unfortunately, the vast majority of Social Security disability applicants are denied. In fact, in 2010, 65 percent of all first-time claims were denied and 87 percent were denied at the reconsideration level. Once the hearing level is reached, 62 percent of claims are approved, mainly because the impact of a disability can be argued in front of a Judge. Working with a social security disability insurance lawyer can greatly increase the likelihood of receiving benefits.