Am I Going to Lose Benefits in 2016?

Are Disability Benefits Being Cut?

Disability benefits are available to Americans who are disabled or unable to work due to a medical condition. The Social Security Administration (SSA) pays disability benefits to help cover the costs of everyday living expenses and medical bills. Over the years, there has always been talk of disability benefits being cut due to the lack of government funding. A recent congressional act has halted this from happening in 2016.

Bipartisan Budget Act of 2015

The Disability Insurance Trust Fund, which contributes to both the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs, was expected to run out of money by 2016. This would have resulted in a 19% cut in disability benefits for those who were receiving them.

In response to these concerns, congress enacted the Bipartisan Budget Act of 2015, which transferred money from the Social Security Trust Fund to the Disability Insurance Trust Fund. This act ensures that no disability benefits will be cut until, at the earliest, 2022. It also keeps the payments at full benefit status and doesn’t enact any new eligibility requirements for potential applicants.

COLA Increase

For 2016, there was also no COLA increase. The Bureau of Labor Statistics determines each year’s COLA, or cost-of-living adjustment. They calculate if inflation has caused the cost of living to rise in the past year, and therefore, if disability benefits need to rise too to be able to pay for those rising costs.

The COLA increase is determined by comparing the “Consumer Price Index for Urban Wage Earners and Clerical Workers” (CPI-W) from the third quarter from the previous year to that of the current year. If the amount is the same, there is no COLA increase, and for 2016, it was.

The Future of Disability Benefits

Because of the Bipartisan Budget Act of 2015, there is enough money to sustain our current disability benefits until 2022. While enacting this new bill, congress also recommended investigation into a new program for saving costs to make disability benefits an even more sustainable program.

Over the past 25 years, different work incentive programs have been tested with little success in saving money. Most likely, the SSA will attempt to try some variation of the BOND program, which gradually reduces disability benefits based on the amount of money a recipient earns at a job.

Another potential way to cut costs for disability benefits would be to change eligibility requirements. Potential changes could include income levels, accepted disabilities, marital or veteran status requirements, and more.

Whether the SSA implements new cost-saving programs or changes eligibility requirements, the expected 19% cut in disability benefits for 2016 was a worst-case scenario. Unfortunately, the Bipartisan Budget Act of 2015 was not a long-term solution, and benefits could possibly be cut by a percentage. Keep in mind though, that after 2022, even if the SSA has not developed a successful cost-saving plan, no benefits will be cut completely.

Getting Help with Your Benefits

Consider hiring a disability lawyer or advocate to help you throughout the process of applying for benefits, appealing to the SSA if your benefits were denied, and any other help with your benefits that you may need.