President Obama's recently-released Fiscal Year 2016 Budget proposes a reallocation of payroll taxes to fix the anticipated s...Read more
Budget Deal Funds Disability Trust Fund, Makes Several Changes to SSDI Program
The budget deal passed by Congress and signed by President Obama increases funding for the Social Security disability trust fund, temporarily staving off a 20 percent cut in Social Security Disability Insurance (SSDI) benefits that was set to take effect in 2016 if Congress failed to act. The budget also makes several other small but important changes to the SSDI program.
As we've discussed before, the Social Security disability trust fund is designed to hold excess Social Security payroll tax payments in years when the government collects more funds through payroll taxes than it spends on disability benefits. The trust fund in then used to supplement disability benefit payments in years when the government doesn't collect enough money to fully fund the program. In recent years, there has been a considerable uptick in disability benefit applications without an accompanying increase in payroll tax collections, leading to an increasingly dire outlook for the trust fund. The budget deal temporarily fixes this problem by channeling an additional .57 percent of the payroll tax to the SSDI program and away from the Social Security retirement program. This increase is only designed to last until the end of 2019, buying Congress time to reach a more permanent solution to the disability benefit shortfall.
The budget also makes several other tweaks to the SSDI program. For one, the legislation requires that the Social Security Administration (SSA) have a physician perform a medical review of all disability benefit applications, which could dramatically slow down the application process. The budget bill also requires the SSA to establish cooperative disability investigation units to work with local law enforcement agencies in all 50 states in order to cut down on benefit fraud. In addition, the budget continues to fund pilot programs aimed at helping more people transition off of disability benefits and back into the workforce. Finally, the bill calls for the expedited examination of potential administrative law judges, which would allow the SSA to continue to process the huge backlog of disability appeals.
To read the full text of the budget bill, click here: https://www.congress.gov/bill/114th-congress/house-bill/1314/text?resultIndex=1#toc-HEC1A094014384BF9BEC241EBE4484181