In prior posts we mentioned that the budget cuts that the Social Security Administration faces could impact the Social Security disability insurance benefits that many Americans rely on. ABC News released new details on a House GOP budget proposal that may cut $125 million from the SSA’s current funding and $500 million from its reserve fund.
Social Security disability insurance benefits are available to Americans who have worked and thereby paid into the national disability insurance system. These benefits are available to individuals who are disabled to the point that they cannot perform their past relevant work and the benefits cover a range of physical and psychological issues.
Although Social Security Commissioner Michael J. Astrue testified that funding cuts might result in as many as 3,500 layoffs, the funding cuts may also hurt the distribution of Social Security disability benefits.
Over 1 million applicants abandon their claims out of frustration every year. Almost 65 percent of first claims for disability benefits are turned down by the administration. Most applicants who appeal are turned down again despite their continued suffering from their disabilities.
Some Republicans in Congress believe that disability insurance benefits discourage people from working. Senator Richard Shelby of Alabama said that the problem is that beneficiaries can claim disability insurance benefits for an unlimited amount of time.
“Their incentive to return to work is very low, which results in workers never seeking gainful employment at the risk of losing future benefits,” Shelby said. There is no indication as to where Shelby’s perception of idle workers comes from or whether it is supported by sufficient data.
Source: ABC News, “Social Security Commissioner Warns of Painful Cuts,” Huma Khan, 3/9/11