The government trust funds used to pay Social Security disability benefits and other types of aid have been expeccted to run low or run out by 2035, according to Yahoo Money.

However, that date doesn’t take into account the effect of the novel coronavirus. Economists now estimate that these funds will be out of money in ten years.

Social Security Disability Benefits Overview

According to the Social Security Administration (SSA), there are two types of Social Security disability benefits offered by the U.S. government. The first is insurance for disabled or blind persons through the Social Security Disability Insurance Program (SSDI). These benefits are paid for by workers’ contributions to the Social Security trust fund. Attorneys can help with the process of applying for SSDI if needed.

The second type of Social Security disability benefits comes in the form of income assistance through the Supplemental Security Income Program (SSI). This program distributes cash payments to aged, blind, and disabled persons and may include supplemental contributions on the state level. These benefits are funded by general tax revenues.

Some individuals may be eligible for both kinds of Social Security disability benefits, but qualifying for one doesn’t necessarily mean you will qualify for the other.  There are certain requirements for each. The amount you get from either program may be affected by state-level benefits or changes in your cost-of-living.

Government “Trust Funds”

Some Social Security disability benefits are paid by government trust funds. According to SSA, a government trust fund is an account held in the U.S. Treasury. The funds in this account come from Social Security taxes “and other income”.

The funds in these accounts are restricted to paying benefits or administrative costs. These funds hold the money not needed to pay the current year’s benefits. The government can then invest these funds into special Treasury bonds which the government itself guarantees. The Treasury redeems the bonds when the fund needs the money to pay benefits.

According to the SSA, there are two government trust funds related to Social Security benefits. The first is the Old-Age and Survivors Insurance (OASI) Trust Fund which pays retirement and survivors benefits. The second is the Disability Insurance (DI) Trust Fund which pays out Social Security disability benefits for the SSDI Program.

Will Social Security Disability Benefits Be Cut?

Chief Actuary of the Social Security program, Stephen Goss, told Yahoo Money that the length of the current economic recession is the key factor in determining the extent to which Social Security disability benefits will be affected. Goss estimates that, if the recession ends in the next two years, the Social Security trust funds are likely to reach their “depletion date” in 2033 or 2034. Other experts estimate that this date could come within this decade.

When these funds are depleted, Social Security disability benefits and other social aids are likely to be reduced. However, the specifics of how this will work are unknown. Budget experts theorize that the reduction might come in one of two ways: either monthly checks will be reduced, or the fund will simply pay out monthly checks when it has the funds to do so. The second option means that Social Security disability benefits might be distributed 10 or nine months out of the year rather than 12.

Medicare, also similarly funded, is at risk as well.

Possible Solutions

There are several ideas being floated as possible solutions to the depletion of these funds. First, lawmakers may choose to make a bipartisan plan for all government trust funds. Another idea popular amongst Democrats would increase income taxes and apply new taxes on the highest earners. These added taxes would then be used to make up the shortfall in Social Security disability benefits and other trust fund-reliant programs.

Another popular Democratic plan would see payroll taxes added to those earning more than $137,700. This group is currently exempt from payroll taxes, according to Yahoo Money.

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This article is not legal advice. It is presented
for informational purposes only.