While policymakers continue to squabble in Washington about how to fund Social Security Disability Insurance (SSDI), one thing worth mentioning is that boosting the share of taxes from the Old-Age and Survivors Insurance (OASI) program would not have an impact on retirees.
This news comes from the Center on Budget and Policy Priorities (CBPP). According to the organization, the move has been done 11 times in the past, and is the most sensible way to avoid a potential 20 percent payment cut to SSDI beneficiaries in 2016.
The CBPP reported that a reallocation of funds would not hurt retirees because even if no changes were made, in 2016, SSDI’s share of the payroll tax would already be able to cover about 80 percent of current benefits. A slight shift in funding to pay for the remaining 20 percent, when compared to the overwhelmingly more people who receive OASI, would not affect the 47 million retirees in comparison to the 11 million SSDI recipients.
Keep in mind, currently, payroll taxes total 12.4 percent of wages in America, with employers and employees each contributing half. Most of that money (about 10.6 of the 12.4 percent taken out) goes towards OASI. The rest, less than 2 percent, supports SSDI.
To read further about this, you can visit the CBPP report by clicking here. “Reallocating taxes to put the two trust funds on an even footing would prolong the DI trust fund by 17 years (from 2016 to 2033), while advancing the OASI fund’s depletion by just one year (from 2034 to 2033),” the CBPP reported.
It should be noted that many retiree groups, including the AARP and the National Committee to Preserve Social Security & Medicare, have come out in support of a payroll shift.
Collecting Social Security Disability
We will continue to update our blogs about news regarding SSDI funding. If you have questions about benefits, you can visit our Social Security FAQ page.
Remember, SSDI benefits are for people who are truly unable to work, whose disabilities are expected to last longer than a year or could result in death.
Troutman & Troutman, P.C. – Tulsa Social Security Disability lawyers
Troutman Touts: Most SSDI recipients receive between $300 and $2,200 per month.