What Would Happen if the Social Security Disability Fund is Cut?

Submitted by Deanna on Tue, 09/15/2015 - 12:41

Social Security Disability Insurance (SSDI) is a federal benefit program funded through taxes paid by American workers. These tax monies are placed into an account known as the Social Security Disability Insurance Trust Fund. This fund is the source for the monthly benefits that are paid to disabled workers and others.

The SSDI Trust Fund has been in deficit for a number of years, meaning the U.S. government has had to place monies into the fund from other sources in order to continue to pay monthly disability benefits to all recipients. The problem is that there are currently not enough workers available to support all the people with disabilities or who are retired.

What Would Happen if the Social Security Disability Fund is Cut?

In 2016, experts predict that the Trust Fund will be bankrupt. If this occurs, Congress will need to take action to restructure the Trust Fund and all of the programs associated with it. Experts also predict that the restructuring of the fund will include a 19 to 20 percent budget cut.

The Fund cut is a frightening prospect to the millions of disabled Americans for whom the SSDI Fund provides ongoing benefits. However, it is important to understand that while the Fund may be cut, that cut does not mean any SSDI recipient will completely lose their benefits. What it does mean though is that disability recipients could be looking at a reduction of 19 to 20 percent in the amount of the monthly benefits they get.

Since 2016 is an election year, it’s entirely possible that the predicted SSDI Trust Fund cut won’t happen. Individuals running for office for the first time and many politicians that are running for re-election may avoid discussions of cutting SSDI benefits for fear of losing votes. Many who currently hold congressional offices may also vote against a cut in SSDI in order to boost their chances of re-election. The frantic pace of an election year may also play a part in delaying reforms to Social Security.

This is not the first time concerns have arisen about Social Security funding. No one knows exactly what 2016 will bring in terms of Social Security Disability Insurance reforms. What is certain however is that no disabled individual will lose benefits even if Social Security budget cuts occur. The worst that may happen is that disability recipients may see a reduction in the amount of monthly SSDI payments.