As discussed, the latest Congressional budget law made changes to Social Security Disability to strengthen the disability fund for approximately seven years and which encourages recipients to return to work. This return-to-work incentive along with other changes to the Social Security Disability program is anticipated to save $5 billion over 10 years as compared to the program’s $141 billion annual cost.
Advocates for the disabled sought measures to eliminate the cash cliff that recipients faced. This issue concerned the ending of benefits if a disabled person decided to work and made over $1,090 per month for more than nine months.
This budget deal now lowers the slope of that cliff somewhat. A person’s SSD benefits will be reduced $1 for every $2 that is earned. This will allow for the offset to begin even when recipients earn less than $1,090. A similar program has been conducted as an experiment for several years and provided slightly greater earnings for participants.
A Cornell University professor who studies the economics of Social Security anticipates that this right-to-work incentive will not result in much savings in the short term. He argues that the incentive will likely increase the number of people on disability insurance and increase the share of recipients who do some work.
This expert also argues that it would be more effective to assist recipients with staying at work before they need to apply for disability insurance because returning to a job after an extended absence can be very difficult. To achieve this, employers could pay more for disability insurance which would encourage them to provide better accommodations for sick or injured workers.
Other changes to the Social Security disability program include the expansion of investigation units that will join with local law enforcement agencies to seek people who may be abusing this system. Ex-felons are now prohibited from making disability determinations, fraud penalties are increased and requires the Social Security Administration to utilize electronic recordkeeping to help avoid overpayments.
California residents should understand how these changes might effect them, should they need SSDI benefits.
Source: The Washington Post, “Budget deal tweaks disability benefits-and not only to save money,” Lydia Depillis, Oct. 27, 2015