For the past several years, Social Security’s Disability Insurance (DI) program has been facing financing challenges. In the fall of 2015, lawmakers took action to prevent a 19% benefit cut that would have affected 10 million disabled enrollees and dependents, extending the program’s solvency past 2018. However, more work remains before the program can be considered financially stable. In September, lawmakers on the House Ways and Means Social Security Subcommittee took the first steps toward improving the program’s solvency when they held a hearing to discuss its future.
Following the hearing, The Senior Citizens League (TSCL) submitted a proposal for strengthening and improving the DI program. We recommended the following seven policy changes based on the results of several surveys of TSCL’s supporters:
- Increasing the frequency of Continuing Disability Reviews (CDRs). Additional funding for CDRs, which are conducted periodically to determine if enrollees still qualify for DI benefits, would return significant savings to the program according to recent projections.
- Reducing wait times. Inadequate funding and a growing hearing backlog have resulted in many DI applicants waiting longer than 600 days to be approved for the program. That’s longer than some of them will live. All applicants deserve decisions on their benefit eligibility in a timely manner, and wait times of two years are simply unacceptable.
- Tightening eligibility requirements. Currently, DI applicants must have worked 5 of the past 10 years to be eligible for benefits. Increasing this requirement to 6 of the past 10 years would reduce the number of eligible beneficiaries only slightly and would save up to $8 billion.
- Prohibiting DI and Unemployment Insurance (UI) “double-dipping.” No laws currently exist to prevent individuals from receiving both disability and unemployment benefits at the same time, even though eligibility rules for the two programs are mutually exclusive. Prohibiting “double-dipping” is a sensible step forward that would save nearly $6 billion over 10 years.
- Increasing the payroll tax cap. Currently, the amount of earnings subject to payroll tax is $127,200, and the Social Security payroll tax is not applied to annual income over that amount. In a recent survey of TSCL’s members, 73% said they would like to see the 6.2 percent payroll tax applied to all earnings in order to increase the solvency of the program.
- Increasing the payroll tax rate. Survey results have also shown strong support for a gradual increase in the payroll tax rate from 6.2% to 7.4%. An increase of that size would amount to an extra 50 cents per week for the average worker – an amount that most feel is fair and practical.
- Preventing benefit cuts. Older Americans understand the compounding effect that even the smallest benefit cut can have over the course of several years. DI beneficiaries living on fixed incomes simply cannot afford a reduction in benefits.
TSCL’s members and supporters, through various surveys and polls, have backed these policy recommendations. Together, they represent a balanced and responsible path forward for the DI program. To read the full set of policy recommendations submitted by TSCL to the Social Security Subcommittee, visit our website. To stay updated on efforts to strengthen and reform the Social Security program, follow TSCL on Facebook or Twitter.