by Maria Samuels, Independent Living Specialist
In late July 2015, the six men and women of the Social Security Board of Trustees released their 2015 annual financial report; a generally unknown report that affects the lives of 59 million people. The Social Security Trust Fund derives from payroll tax revenue from current workers. It controls payments to:
1. Old Age and Survivors Insurance or OASI (48 million retired workers, their dependents and survivors).
2. Disability Insurance or DI (11 million disabled workers plus their dependents) .
As always, the lengthy report is quite detailed, requires an advanced degree in accounting to decipher, plus substantial concentration to sift through. So let’s summarize two important points made in the report:
• First the good news: The Social Security Disability Insurance (SSDI) fund is projected to continue to grow in 2015 and exceed the annual cost. So in 2015 Disability Insurance beneficiaries will be getting their full disability payments.
• Now the bad news: Unless lawmakers act now, you can expect SSDI benefits to be slashed by 19% in 2016.
Is It Time to Panic Yet?
In the Conclusion portion, the trustees report that the Disability Insurance Trust Fund will “become depleted in the fourth quarter of 2016” and be able to pay only 81 percent to the beneficiaries. The average SSDI check is $1165. For most people, their SSDI benefit is their only income. After the 19% cut, $1165 reduces to $944. Now that sounds like something to worry about. Is it possible to live on $944 a month in Westchester County? We know the answer to that but the question remains: Is It Time To Panic or Not? Before we can answer, let’s remember something
!!YOUR SOCIAL SECURITY DISABILITY PAYMENT IS THE GOVERNMENT’S LEGAL OBLIGATION!!
I can put those ten words in bolded capital letters preceded and followed by two exclamation points because it is a fact; it is the law. The fund is guaranteed by the “full faith and credit” of the United States government, the same as treasury securities. Neither the President nor the Social Security Administration can override these payments. You will never know this if you hear the rant of several Congressmen such as Rep. Sam Johnson (R. Tex), member of the Social Security subcommittee. He wants an overall revamp of the system even if it means the 19% cut happens; and it will, if we have to wait for the government to overall the Social Security benefits system . Unfortunately, He is not alone on this soapbox.
Congress would have to pass special legislation to make any negative changes to decrease benefits and will surely incur the wrath and vengeance of AARP (who has many members who are over 50 and collect SSDI).
History is repeating itself. In 1994 the Disability Insurance fund came close to depletion. Lawmakers responded the same year by reallocating the payroll tax rate between OASI and DI. Almost every year since then, the Trustees have trumpeted that the Disability Insurance fund is expected to deplete several years earlier than the OASI fund, that is in 2016 and like the boy who cried wolf, they were ignored. Here we are in 2015 and they continue to urge the non-responsive lawmakers to act and act now before the 2016 depletion date. The choices for the lawmakers include
• Increase payroll taxes.
• Reduce scheduled benefits.
• Reallocate funds from OASI to DI.
Most likely, number three will be the chosen short term remedy. However, don’t let this possibility put your mind completely at rest. This is a presidential election season and there is a deep division between the parties. So anything can happen.
Don’t Panic! Prepare for the Worst!
Write and call your representatives and senators. Yes, this is old school but it is effective. Elected officials want you to know they exist. Call/email all and demand that they do not break their contract with you. The solution to the cut is a legislative one and Congress needs to respond now. Even if you are not a SSDI beneficiary, this can start a trend if it proves that it is easy to cut the benefits of those who supposedly cannot advocate for themselves. CLICK HERE to find your senators and representatives contact information.
If you are able to work, then begin to seek employment. Social Security has special rules called work incentives that make it possible to test your ability to work. A major one is the nine month trial work period during which you can “work and hold a job without the threat of losing benefits.” There are many more of these special rules all designed to help you keep working and not lose your benefits.
Balance your budget. Review your savings, retirement funds and other investments to decide how and when you may need to tap into them.
Contact your local Independent Living Center. These organizations are a valuable resource for help with increasing or keeping your disability, health insurance and other benefits, finding which work incentives apply to you, budgeting, housing needs, and information and referral to all services and resources. In Westchester County we have Westchester Disabled on the Move and Westchester Independent Living Center. Make use of them.
If you want to learn more or form your own opinion about this; good. That means you refuse to wear rose colored glasses and hope for the best. See below for a starter and above all – Act Now!
Summary of the 2015 Annual Social Security Trustees Report: http: http://www.ssa.gov/oact/trsum/
Washington Post article: http://www.washingtonpost.com/news/get-there/wp/2015/07/23/a-cut-to-social-security-disability-benefits-is-around-the-corner/