Tuesday, July 10, 2012

The Real Problem With Social Security Disability: The DI Trust Fund Will Be Exhausted in Four Years


That's from the 2012 Trustees Report published and transmitted to Congress in April.
From the press release:
The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds.  The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2033, three years sooner than projected last year.  The DI Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate....MORE
From the report (252 page PDF):
Page 39
Table IV.A2 shows the estimated operations and financial status of the DI Trust Fund during calendar years 2012-21 under the three sets of assumptions, together with values for actual experience during 2007-11. Non-interest income increases steadily after 2011 under each alternative, due to most of the same factors described previously for the OASI Trust Fund. However, DI costs grow at an even faster pace than income for reasons explained in greater detail below. As a result, after having reached a maximum in 2008, DI Trust Fund assets continue to decrease in 2012 under each alternative.

Under the low-cost assumptions, assets begin to increase again after reaching a low point in 2018. Under the intermediate assumptions, assets continue to decline until their projected exhaustion in 2016. Under the high-cost assumptions, DI assets decline steadily until exhaustion in 2015....

...Future DI cost increases in part due to increases in average benefit levels resulting from: (1) automatic benefit increases; and (2) projected increases in the amounts of average monthly earnings on which benefits are based. In addition, the number of DI beneficiaries in current-payment status generally increases during the short-range projection period. Over the period 2011-21, the projected annual average growth rate in the number of DI disabledworker beneficiaries is roughly 0.2, 1.3, and 2.5 percent under alternatives I, II, and III, respectively. This growth in DI beneficiaries is largely due to the gradual progression of the baby-boom generation through ages 50 to normal retirement age, the ages which have the highest rates of disability prevalence.

The estimates under all three sets of assumptions anticipate additional growth in the numbers of disabled worker beneficiaries due to a projected continuation of incidence rates at historically high levels. These projected higher levels of disability incidence subside as the economy recovers from the recent economic recession and return to levels consistent with longer term trends in incidence rates....
Phi Scamma Jamma: More People Went on Disability Last Month Than Got Jobs

This is a trend we've been trying to draw attention to:   
What I'd really like to see is a list of the counties with the highest levels of Social Security Disability fraud, this is a program ripe for reform....