Author Topic: Social Security Disability Insurance, implications  (Read 479 times)

Offline mountainmoma

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Social Security Disability Insurance, implications
« on: June 18, 2017, 08:23:04 AM »
I almost wanted to put this under " Media Distortion, Yet Again " because the truth is, I havent seen a headline that wasnt sensationalist for some time. And, this one is no exception, I have spent the past few weeks on the look out for real information, but every article had gloom and doom headlines, with absolutely no information about the actual topic in it ! This morning, actual substance turned up, in an unlikely spot, but I'll take it. Further media bashing should go under the appropriate thread, on to disability.

I receive SSDI, Social Security Disability Insurance, so I may keep up on it more than most. SSDI is an insurance plan, not a welfare plan, it is paid into via payroll tax deductions, it was set up as a separate insurance, having its own percent of payroll going into it, like Social Security Retirement and Medicare, although on your W2 they are added together as Payroll deduction to save space. Now, just to obfuscate this, our civil servants gave 2 welfare programs extremely similar names, SSI, Supplemental Security Income, and Medicaid, which are programs that are funded via the general federal ( and state for medicaid) taxes and fund programs for disabled people and medical needs, at a lower payout than the Social Security Insurance programs. Like the retirement program, you can only receive SSDI if you have worked and paid into the program long enough, and the amount you receive is based on work earnings, with a min and max cap.

SSDI, like retirement, has  had a trust fund build up in the program to use. SSDI hit the wall sooner than retirement, it was about to have run thru its trust fund and go to payout based on current receipts basically now, actually, last year, spring 2016. Congress, under previous administration ( Pres. Obama), decided to kick the can down the road and make a bigger problem later (surprise, surprise). Last spring, either SSDI payments should have been cut 20%, or additional funding would have had to been secured. Neither path was taken. Instead, congress decided to combine the SSDI trust fund with the Social Security Retirement trust fund. So much for a lock box on our retirement funds ! But, it kept things smooth long enough to get thru the 2016 elections, leaving us still in an even harder spot. I would have thought that this action congress took would be illegal, but no-one challenged it.

It is with this background that current administration has said they are doing something about it. Now, I am not personally that optomistic about this plan, I think we actually should cut payouts 20% until we come up with the actual savings or additional funding.

What would cutting payments 20% mean ? Well, for alot of receipients, that would put them below the poverty line and thus eligible for food stamps and medicaid ( the medicaid would then pay their medicare part B premium (134 a month) deductible (1316 a year), copays, etc...), with food stamps kicking in no more than $194/month, likely less. I have long thought that SSDI payouts were always raised just enough to keep SSDI receipients right outside of that cut off. In other words, cutting SSDI by 20% would have cost the medical and food welfare programs some money. For the lower income and average SSDI recipient with no other household resources (ie., no working spouse or private pension/disability), it would have been a wash financially, more paperwork and an emotional hit to need to receive assistance. The relatively higher household income recipients would have had an average loss of $200/month income. Now, they would have gotten by, since I manage to, I know they could, but it would sting and the outcry would be enormous, not something congress wanted in an election year ! But, I do not think any real changes to the program will happen without pressure, and letting the cuts happen will create pressure. Could be that no changes are neccessary, young people are already paying too much in payroll taxes, and there are indeed safety net programs as mentioned to cushion that income loss for the lwer income recipient.

Now, what is current administration proposing ? If you have seen the headlines lately, you would think cuts right now to SSDI current recipient checks. Nope. Congress has already combined the trust funds. All administration can do is changes to how the program is administered, structural changes need congress. For a small amount of immediate savings, it proposes a reduction in retroactive benefits and a sliding scale of combined benefits for families with multiple recipients. This sliding scale for multiple recipients part is the only change to current recipient monthly checks proposed. The retroactive payouts come into play as it takes years to go thru the process to get SSDI, so this is back pay from the time disabled until you are awarded it. I have seen no information on what exactly is proposed to change on this. Lawyers for getting SSDI work on commission, and take a set by law percent of this retroactive pay, so it could potentially affect being able to get legal help. It also will be less to pay bills that have piled up while waiting to get qualified.

Quote
When it comes to disability insurance costs, one of the key assumptions behind the Trump budget is that many people who are now considered disabled could actually go back to work. According to the Office of Management and Budget's description of the 2018 budgets major savings and reforms, the budget would "evaluate creative and effective ways to promote greater labor force participation of people with disability by expanding demonstration authority that allows the Administration to test new program rules and requires mandatory participation by program applicants and beneficiaries."

Under the proposal, an "expert panel" would identify potential changes to the program, using demonstrations of different methods and other evidence to establish what new permanent rules should look like. The expert panel's purpose, according to the Congressional Budget Office, is "making recommendations to reduce participation levels that would be directly tied to reaching a 5 percent reduction in Disability Insurance (DI) and Supplemental Security Income (SSI) projected outlays by 2027."

The Trump administration has high hopes for these measures. It believes that testing these new approaches would cut nearly $49 billion from expenditures over the next 10 years, which is more than two-thirds of the total reductions to disability-related spending that the budget would make overall.
What approaches does Trump want to test?

In particular, the OMB explanation of the 2018 proposed budget lists five specific projects in which it would require disabled Americans to participate. They include:

    Testing time-limited benefits for beneficiaries during periods when they would be more likely to return to work.
    Requiring applicants to actively look for a job before their applications can be considered.
    Have state-based vocational rehabilitation offices intervene more quickly to try to head off future claims for Social Security disability benefits.
    Use welfare-to-work strategies in state offices of the Temporary Assistance for Needy Families program, including wellness care and vocational services.
    Require those with lower back pain and arthritis to go through rehabilitation similar to that used in occupational health contexts before getting disability benefits.

At the same time, the budget calls for the Department of Labor to test more broadly a program in Washington State that's designed to reduce workers' compensation spending on those with temporary injuries and disabilities.
The problem with budget-cut testing

The primary challenge that these disability cuts will face is actually producing the savings that the budget projects. The budget has no expectations that its testing will achieve any savings between now and 2022, and in fact it recognizes that the tests would add $100 million in costs. And yet the budget assumes that starting in 2023, the results of the tests will produce annual savings that will ramp up at a rate of roughly $3 billion to $5 billion per year, reaching a maximum of $18.6 billion in 2027.

https://www.fool.com/retirement/2017/06/18/why-trumps-proposed-social-security-cuts-are-a-mir.aspx


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Offline Carl

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Re: Social Security Disability Insurance, implications
« Reply #1 on: June 18, 2017, 09:08:59 AM »
This explains why I was disabled and after six long years and having paid out hundreds of thousands of hard earned savings ,
I finally had nothing and that qualified me for Disability and Medicare...and only ONE year of back pay was awarded.
I am happy still and 'just' live within my means ...and live pretty well compared to many people I know
as I get by with a little help from my friends and a fairly simple life as I was already accustomed to.
This is something,along with care for retired  and medical for military that I am confident President Trump will address.
He has already expressed his concern towards the people,not the leadership,of Cuba and
I only hope that Congress will stop bickering and blaming and get down to the business we hired them for ...
or maybe we should have this 'farmed out' to a group of industrious middle easterners to guide the US at a smoother ,bargain price?
I refuse to punch back as I didn't come here to fight.

Stop complaining about life and start Celebrating it .

I've reached the age where there is little left to learn the hard way.

If you had only one year,one month,or one day...Would you live your life differently?

Offline mountainmoma

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Re: Social Security Disability Insurance, implications
« Reply #2 on: June 18, 2017, 09:18:38 AM »
This explains why I was disabled and after six long years and having paid out hundreds of thousands of hard earned savings ,
I finally had nothing and that qualified me for Disability and Medicare...and only ONE year of back pay was awarded.
I am happy still and 'just' live within my means ...and live pretty well compared to many people I know
as I get by with a little help from my friends and a fairly simple life as I was already accustomed to.
This is something,along with care for retired  and medical for military that I am confident President Trump will address.
He has already expressed his concern towards the people,not the leadership,of Cuba and
I only hope that Congress will stop bickering and blaming and get down to the business we hired them for ...
or maybe we should have this 'farmed out' to a group of industrious middle easterners to guide the US at a smoother ,bargain price?

The stuff listed above has not taken affect yet.

SSDI is NOT dependent on your savings or debt.( Now, SSI is). Can't get Medicare until after on SSDI, so yes, those bills DO pile up ! Medcaid ( euphemistically called "extra help" when already receiving Medicare ) to help with your medical bills is absolutely dependent on income and savings. If you are receiving SSDI, I do not know why it was one year of back pay, likely it was "only" one year from application to being vetted as eligible. But, the new proposed administration rules outlined above didn't have any bearing on it.

Yes, living simply is what is needed to get by while on disability ! Have to adjust to living within our means, (even if our means would have been cut to 20% less a month to keep the insurance solvent)
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Offline Carl

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Re: Social Security Disability Insurance, implications
« Reply #3 on: June 18, 2017, 09:53:31 AM »
I don't know exactly why ,but the letter they mailed said they were only allowed 12 months back pay.
I did have to get approved for Medicaid first then was allowed to apply for Disability and Medicare...the Medicaid was the restriction that said I must posses less than $2000 dollars ,a house and a auto were OK...So from the NURSING HOME bed,where I became a regular appearance here. I paid off my home,My BOL and my auto and passed on one heck of an AMAZON supplied Christmas to friends ,family,and my self to get finances to an acceptable level...

Over $700K had to go,and it was easy as I already owed more than that to the medical bills,but I invested in those things that the government did not use as a measure of wealth and now I do live within the poverty level though my dog often tires of ramen noodles and microwave meals...she does not complain much as she is a real trouper. Now you know more about me than most as I try to beat back my biggest foe.
I refuse to punch back as I didn't come here to fight.

Stop complaining about life and start Celebrating it .

I've reached the age where there is little left to learn the hard way.

If you had only one year,one month,or one day...Would you live your life differently?

Offline mountainmoma

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Re: Social Security Disability Insurance, implications
« Reply #4 on: June 18, 2017, 10:16:16 AM »
yep. Firearms, personal hobbies and collections are not counted.
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Offline Carl

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Re: Social Security Disability Insurance, implications
« Reply #5 on: June 18, 2017, 01:46:42 PM »
But a ROLLS ROYCE as a personal vehicle might be pushing it. :)
I refuse to punch back as I didn't come here to fight.

Stop complaining about life and start Celebrating it .

I've reached the age where there is little left to learn the hard way.

If you had only one year,one month,or one day...Would you live your life differently?