When Social Security Disability Insurance gets discussed in the news these days, you almost never hear a report that doesn’t include the words “fraud” and “running out of money.” The narrative usually goes like this: The SSDI program is overrun with fraudulent claims. Because of this, the disability trust fund is going to run out by 2016.
Before you start to believe the narratives of some politicians that the sky is falling, it’s important to understand the facts. Despite what some might say, rates of disability fraud are very low, and the increases in SSDI enrollment are happening for other, legitimate reasons.
A group called the Center on Budget and Policy Priorities recently released an analysis explaining the increase in SSDI beneficiaries in recent decades. Fraud is not on the list. Instead, the increases can be attributed to:
- Raising the Social Security full retirement age from 65 to 66 years old
- Growth in the overall U.S population
- The increasing number of women in the workforce
- The fact that the large generation of baby boomers is nearing retirement
As for predictions that the Social Security Disability Insurance trust fund is running out of money, the conclusions are misleading at best. The Social Security Administration collects payroll taxes to fund old-age retirement, disability benefits and survivors’ benefits. The disability trust fund is technically separate from the one covering old-age retirement and survivors’ benefits.
However, the SSA could reallocate what percentage of taxes goes into which fund. It has made this move in the past and could do so again.
Thankfully, the government usually ends up doing the right thing (after it has tried everything else, of course). As such, it seems fairly safe to assume that the necessary changes will be made to ensure that Americans who qualify for SSDI can continue to receive their full benefits.
Source: U.S. News & World Report, “The Myth of ‘Out of Control’ Disability Benefits,” Chad Stone, Aug. 22, 2014