As a practice focused on Social Security Disability Insurance and Supplemental Security Income issues we keep a close eye on developments related to those programs. Funding has been a big concern for quite some time.
Regular readers in Fresno and elsewhere are aware of the warning bells that have been issued from of Washington and by outside observers, too. Indeed, in one recent post we reported about how studies out of Harvard University suggest that internal biases of Social Security Administration analysts may mean that the agency’s own fund projections are underestimated by billions of dollars.
More recently, the Congressional Budget Office issued results of an audit that raise even more flags about the future of funding. The focus of the CBO analysis was on the growing divide between payroll taxes collected and what is paid out in retirement benefits.
What the CBO noted was that 2010 marked the first year in which retirement benefits paid exceeded taxes collected. In 2014, there was a 9 percent gap between the figures. By 2040, the red rift is expected to reach 40 percent.
They say the problem is that there are fewer people paying into the fund and a growing number of people making withdrawals — a situation that will only get worse. So the analysts say changes are necessary. They suggest raising taxes, reducing benefits or some combination of the two.
Some of you might be asking what this has to do with SSDI. It is true that SSDI is paid for out of a separate account. But that account is funded by payroll taxes collected. And, as has been widely reported, the disability account is due to run out of money sometime next year.
One of the ways officials have used to shore up SSDI in the past has been to divert money from the retirement account and that has been suggested again this time. But it seems logical to think that, if the CBO report is accurate, a redirect might not fly.
Obtaining the disability benefits due can be challenging now. This latest forecast doesn’t indicate things are going to get better. The process may be made easier with an attorney’s help.