Disability Benefit Cut Is Looming

Disability Benefit Cut Is Looming

Alexandria, VA: A deadline is looming for more than 8.9 million disabled Social Security beneficiaries as well as 1.8 million of their children, warns The Senior Citizens League (TSCL). So far Congress has not made public any long-term plan to head off a 20% cut of Social Security disability benefits that would occur in about two years. “All Social Security beneficiaries are waiting to learn how our newly elected lawmakers intend to remedy the situation,” says TSCL Chairman, Ed Cates.

The Social Security Trustees recently projected that the Disability Insurance Trust Fund will be fully depleted by 2016. If the next Congress takes no action to address the matter, payroll taxes will only be sufficient to cover about 80 percent of benefits after Trust Fund depletion. While Congress has never permitted a trust fund to run out before, time is short to make what’s likely to be difficult long-term changes. “The longer lawmakers wait at this point, the greater the chances of a funding crisis and benefit cuts,” Cates says.

Trustees tend to report the financial condition of the combined Social Security Trust Funds, including the one that pays retirement benefits, as solvent until 2033. But there are actually two separate Trust Funds with separate accounting. One Trust Fund cannot borrow or receive reallocated payroll taxes from the other without legislative action from Congress — a short - term fix that Congress has relied on 11 times in the past.
Social Security disability benefits are financed through the taxes paid by workers and their employers on earnings up to a cap of $117,000. Of the 6.2% that each pays, 0.9% goes to Disability Insurance and the rest goes to pay retirement and survivors benefits.

Congress has only two ways to address long-term funding fixes for Social Security — benefit cuts and tax revenue increases. TSCL surveys indicate that people who receive Social Security don’t support most benefit cuts, and feel that the amount that beneficiaries receive isn’t adequate to live on over longer retirements. The average benefit received by disabled workers is lower than the average retirement benefit —$1,145 vs. $1,235.

A survey conducted by TSCL earlier this year found that 73 percent of people responding strongly oppose a widely debated proposal to cut benefits by switching to a more slowly-growing COLA index. Sixty-five percent, however, strongly favor raising the taxable maximum income cap and requiring high income workers with wages of more than $117,000 to pay taxes on all earnings.
“TSCL believes that Congress must get started and put forward plans for Social Security Disability soon. “To prevent benefit cuts, Social Security recipients need to get involved to learn about proposed changes and provide vigorous feedback to lawmakers about what the public will accept,” Cates says. What do you think? Visit TSCL’s website at www.SeniorsLeague.org and take a poll.


With about 1 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of TREA The Enlisted Association. Please visit www.SeniorsLeague.org or call 1-800-333-8725 for more information.