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Rule Change Enacted, SSDI Fight to Follow

by  on  News & Resources

Recently, the House of Representatives kicked off the year by enacting a minor procedural change that could lead to a major fight for people who receive Social Security disability benefits in the coming months. Although the rule change didn’t garner a lot of media attention, it will have a significant influence on the SSDI payments being made by the federal government this year and next, and it could lead to large payment cuts across the board, workers’ compensation attorneys in Denver report.

SSDI Funds May Be Empty Soon

By next year, SSDI funds will be empty, leaving benefits for disabled workers and their families to be cut by up to 20 percent if no new funding can be found. For a disabled worker in Denver who receives the maximum SSDI payment of $2,663 per month, this could mean a cut of over $500 each month. In previous years, Congress could draw money from Social Security retirement funds to cover the lapse in disability funding; but now, the House’s new rule change eliminates that as a possibility.

Going forward, transferring retirement funds to the disability coffers can only be done if the transfer is related to “changes that stabilize the overall Social Security Trust Fund (by cutting benefits, raising taxes, or both).” Basically, no payroll tax revenues can be shifted between the disability and retirement funds of Social Security unless changes are being made to the entire program.

Cause for Concern

This rule change could cause problems for the nine million disabled workers in the country who rely on Social Security disability benefits to support themselves, and their children, two million of which are listed as dependents of disabled workers. The majority of SSDI-eligible workers are over 50, and nearly one-third are in their 60s. In 2014, the average amount received per month hovered around $1,150, which puts SSDI recipients only slightly above the national poverty level income for one person and decidedly below for a family of two.

Additionally, people who are ill or unable to work due to injury count on benefits from the disability program to support them, as they have been paying into the program for years. More Social Security dependents are on their way as the Baby Boom generation gets closer to retirement. SSDI benefits become critical for workers who are in their 60s and risk injuries on the job before their retirement. If the program runs out of money, hundreds of thousands of Americans will be unable to maintain their current lifestyles.

Workers’ compensation attorneys say there is still time to work out a compromise and overturn the House’s ruling. However, the House is making a statement regarding the Social Security program and the need for change. The program lacks sufficient funding and the previous practice of transferring money between disability and retirement funds will not be sustainable for long.

Levine Law represents clients who need to obtain workers’ compensation or disability earnings after an on-the-job injury or illness puts them out of work. To discuss your options for benefits and/or potential Social Security changes, contact Jordan Levine today.