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Life and Health

SOCIAL SECURITY SPIRALING TOWARD INSOLVENCY

By December 1, 2011 No Comments

Social Security’s disability program is expected to become insolvent in less than a decade. If Congress fails to solve the issues leading to this problem, Social Security will run out of money, which means they won’t be able to pay full benefits. Due to economic difficulties, people of the baby boomer generation are applying for Social Security disability benefits. Unfortunately, many disabled workers of this generation held jobs that were eliminated due to economic decline. These individuals can’t find new jobs, so disability income is the only option they know is available.

The deluge of applications flooding the Social Security office has created a backlog. The program has already been in the red financially for several years. The new influx of applications has created a load that threatens to collapse the structure entirely. Unfortunately, nearly two-thirds of initial applications are rejected. This brings the need for a lengthy appeal process, which might consume up to two years. Of the nearly 14 million people who receive federal disability benefits, more than 4 million receive SSI, more than 7.5 million receive Social Security, and more than 1.5 million receive both types of benefits.

In an attempt to save Social Security from collapsing, Congress is targeting overpaid balances from the various programs. In addition, they’re implementing enhanced enforcement. A deficit-reduction package they allowed is expected to bring at least a $4 billion boost over the next decade for the Social Security budget. This amount will help to invest in programs used for identification of people who no longer meet the qualification criteria. Those who don’t meet the criteria won’t be able to receive benefits. This process aims to limit the sparse funds only to those who truly need them. Although not everyone abuses disability benefits, studies have shown that there are some individuals receiving aid who aren’t truly disabled.

If the plan works, it could save approximately $12 billion over the span of a decade. Funds will be distributed to the backlogged applicants who need disability income. In addition to this, there will be measures in place to prevent those who don’t need benefits from getting them. There have also been recommendations made to boost the benefits for the elderly and individuals who have a long-term disability. In addition to this, suggestions have been made to slow the benefit growth for high earners. Raising full and early retirement ages has also been suggested.

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