Serious Financial Repercussions if Social Security Benefits Cut by 20%
Published : 2015-06-11
Author : The Senior Citizens League - Contact: 1 (703) 548-5568
🛈 Synopsis : Serious financial repercussions likely for beneficiaries if Congress does not act in time to fix the Social Security Disability Insurance program.
A new poll by The Senior Citizens League (TSCL) found that there would be serious financial repercussions for beneficiaries if Congress does not act in time to fix the Social Security Disability Insurance program.
The poll asked "How would a 20% Social Security benefit cut affect you"
- 57% of participants said they wouldn't be able to afford one or more basic essential needs like housing, food, or medicine.
- 27% said they would have to spend through savings faster than planned, and,
- 14% said they would be forced into debt.
- Only 2% said "no big deal."
The poll was open to current Social Security recipients and anyone with an interest in Social Security retirement, survivors, or disability insurance benefits.
The scenario is not as hypothetical as some may think.
The Social Security Trustees project that by the end of 2016 the Social Security Disability Insurance trust fund, which operates separately from the retirement and survivors trust fund, will be insolvent, and unable to pay disability benefits in full. When that happens disability benefit payments would have to be reduced by about 20% to match tax revenues coming in. "So far Congress has not made public any plan to prevent this from occurring," observes TSCL Chairman, Ed Cates.
Social Security disability benefits are paid for through payroll taxes.
Benefits are calculated based on the disabled worker's earnings history and the length of time worked. A total of 10.9 million disabled beneficiaries receive a monthly benefit averaging about $1,017.
According to TSCL's annual "Senior Survey" conducted earlier this year, nearly one in three survey participants, 31%, said they had no other retirement income, like pensions or savings, in addition to Social Security.
The survey found no support for fixing the Social Security disability or retirement programs by cutting benefits, other than measures to reduce fraud and abuse.
The survey found instead that 70% of respondents support raising the taxable maximum wage cap to apply the Social Security tax to all earnings. Currently the highest income workers, earning more than $118,500 per year, pay nothing on earnings over that amount.
In addition, the survey found that 45% favored very gradually increasing the payroll tax rate by 1% each for all workers and employers versus 30% who opposed the proposal.
"TSCL believes that the Social Security Disability program's solvency can be addressed without benefits cuts, without running down the clock and without turning Social Security into political football," says Cates.
To learn more and to participate in TSCL surveys and polls, visit www.SeniorsLeague.org
Related U.S. Social Security Documents
- 1: 2021 COLA: 1.3% Predicted : U.S. Social Security recipients likely to get 1.3 percent cost of living adjustment (COLA) in 2021 - the 2nd lowest ever paid, according to The Senior Citizens League (TSCL).
- 2: Social Security Disability Demographics in Rural America : Document examines several employment statistics and rates of disability in certain rural areas of the United States.
- 3: Relief for Student Loan Borrowers with Disabilities During COVID-19 : The United States Department of Education announces relief for student loan borrowers with total and permanent disabilities during the COVID-19 emergency.
- 4: Social Security Outreach to Vulnerable During COVID-19 : U.S. Social Security Administration outreach to vulnerable populations during COVID-19 Pandemic - Advocates and community organizations can help connect people.
- 5: U.S. Department of Social Security Benefits Calculators : Find out your Social Security benefit entitlements using these calculators, includes information on how to apply online for benefit payments.
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Journal: Disabled World. Language: English (U.S.). Author: The Senior Citizens League. Electronic Publication Date: 2015-06-11. Title: Serious Financial Repercussions if Social Security Benefits Cut by 20%, Source: <a href=https://www.disabled-world.com/disability/social-security/usa/repercussions.php>Serious Financial Repercussions if Social Security Benefits Cut by 20%</a>. Retrieved 2021-04-12, from https://www.disabled-world.com/disability/social-security/usa/repercussions.php - Reference: DW#121-11444.