Are you on disability and worried about a cut in benefits when the disability trust fund is expected to be exhausted in 2016? The good news is that this can be prevented through certain legislative changes. The Center on Budget and Policy Priorities (CBPP) outlines them below:
Kathy Ruffing of the CBPP champions tax increases as the chief savings generator for a SSDI solvency package. This could come from raising the maximum amount of wages subject to the payroll tax from the current 83% to 90%, subjecting voluntary salary-reduction plans (such as the health-care Flexible Spending Accounts) to the payroll tax like 401(k)s and other retirement plans, as well as increasing the payroll tax rate. Although times are hard for everyone, The Pew Research Center for the People and the Press finds that people are willing to support the Social Security programs through taxes and other policy changes rather than seeing cuts in benefits.
Another measure that policymakers could take is reallocating the payroll tax revenues between the disability and retirement trust funds, an action which has been done at least six times in the past for supporting both funds. Currently, the disability programs account for 1.8% of the 12.4% Social Security payroll tax. If that share is raised by 0.8% in 2013 and 2014, and gradually decreased to 0.2% in 2019-2029, both of the Social Security trust funds would be able to make scheduled benefit payments through 2033. However, it is up to policymakers to act fast and strategically to ensure that millions of Americans continue to receive their crucial disability benefits.