The federal government recently issued a warning about the fiscal challenges on the horizon for the Social Security Administration. The Social Security trust fund is now projected to run out of funds in 2033, three years earlier than previously projected. This is most likely because the contributions to the fund have been drastically reduced as a result of the difficult economic climate which has diminished payroll taxes.
More alarming, however, is that the portion of the fund that pays for disability benefits is projected to be insolvent in only four years. This certainly feels like an impending disaster for California residents with disabilities who rely on Social Security disability benefits in order to survive.
Should the Social Security fund become insolvent, it is likely that most beneficiaries will continue to be paid from money coming into the system in the form of Social Security taxes. However, recipients of Social Security disability may still have some reason to be alarmed. The fund is currently operating over budget, which means that without substantial changes, the money will simply evaporate over time, leaving the fund insolvent.
When this happens, or sometime in the near future, it is very likely that legislators will seek to limit benefits and coverage for disabled individuals who are among the individuals who need the financial help the most.
Hopefully, legislators will find a way to fix the problem so that the Social Security fund does not become insolvent, without eliminating substantial coverage from the disabled. If not, California residents with disabilities may find it even more difficult to obtain much needed SSD coverage.
Source: Pioneer Press, “Social Security, Medicare move closer to insolvency,” Noam N. Levey, April 23, 2012