Dade and Broward County Injury News

Is Social Security Disability Headed for Insolvency?

Posted on Aug 24, 2011

Social Security’s disability program is being flooded with claims from laid-off workers including aging baby boomers and causing the program to head towards the brink of insolvency.

As people with disabilities have lost their jobs and can’t find new ones, applications are up nearly 50 percent over a decade ago.

According to congressional estimates the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry as well.

Trustees who oversee Social Security are urging Congress to reallocate money from the retirement program and aid the disability system.

Many disabled people who have been laid off and can’t find new jobs are filing claims for disability benefits. Increases are not unusual in a bad economy. This year about 3.3 million people are expected to apply for federal benefits.

Social Security Administer, Michael Astrue said in an interview, "It's primarily economic desperation. People on the margins who get bad news in terms of a layoff and have no other place to go will take a shot at disability,"

The aging population is also being hit with the disability program. As people get older the disability rates rise and more people apply for more disability benefits rather than waiting until they qualify for retirement.

Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income.

Policymakers are working hard to improve the disability system. Two issues they are working with are legitimate applicants having to wait years to get benefits, while others are getting payments they don't deserve.

The deficit reduction package that was enacted this month allows Congress to boost Social Security's budget by approximately $4 billion over the next decade to invest in programs that identify people who are not qualified to receive disability benefits.

The processing time is a nightmare for legitimate applicants. About two-thirds of the initial applications are rejected. Many people become discouraged and drop their claims. For those people wishing to appeal their claim, the process can take two years or more, but the chances are good they eventually will get benefits.

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