A recent (October 2016) bipartisan budget deal includes important provisions that will shore up the Social Security trust fund and increase the number of Administrative Law Judges (ALJ) hearing cases. Long wait times experienced by claimants waiting to have their cases resolved due to underfunding and understaffing at the Social Security Administration are still a problem, and this deal should improve the situation. It also may help solve the looming funding crisis involving the disability trust fund, which was scheduled to start paying out reduced monthly benefits in 2016 due to funding shortages.
Addressing Shortfalls In The Disability Trust Fund
First, the trust fund: Social Security disburses payments to retirees and the disabled from two sources, the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds.
The vast majority of American workers pay 6.2% of their paycheck in Federal Insurance Contributions Act (FICA) taxes, which is then matched by a 6.2% contribution from their employer (totaling 12.4%). A percentage of the FICA taxes are then allocated into each trust fund: 10.6% into the OASI fund and 1.8% into the DI fund.
Under the terms of the recent budget deal, the percentage of FICA taxes allocated to the disability fund would increase from 1.8% to 2.37%, which should allow claimants to continue receiving their full benefit amount in the coming years.
According to acting Social Security Commissioner Carolyn Colvin: “Without the reallocation that’s been proposed, we would be looking at being able to only pay about 79 percent of the benefits that someone on disability is entitled to,” Colvin said. “We have full faith and confidence that Congress will in fact approve that reallocation, which will then insure the program will be solvent through 2022 and that we would have adequate time to make any changes that need to be made to assure long-term solvency.”
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More Judges Means Less Time Waiting…Hopefully?
The second important aspect of the budget deal involves funding to increase the number of ALJs hearing disability appeals. There are currently 1,450 ALJs hearing appeals across the country. Despite this, wait times for disability appeals have continued to rise, and it can currently take years for a claim to be resolved. The Budget deal will increase the number of ALJs to 1,925 by 2017, which should help to ease the backlog of appeals and help to resolve future claims more quickly.
Both of these developments are promising for disability applicants and those already receiving benefits. The next step is for Congress to craft long term solutions to keep the disability trust fund solvent for the coming decades, and continue to increase the speed and efficiency of the claims approval process so that disabled workers are not left without income for years while awaiting benefits.
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