SSI Disability


What Does Sequestration Mean to Your Disability Claim?
Budget sequestration - or the "fiscal cliff" as it's being called in the media - is a series of budget control measures that were put in place in order to force Congress to meet deficit reduction goals.  Because of the politics surrounding sequestration, it has become difficult to figure out exactly what it is or how it will impact any specific government program.  Anyone who has just filed or is planning to file a disability application probably wonders whether sequestration will have an effect on their claim.
The simple answer is that it won't.  Disability benefits are managed by the Social Security Administration and are part of an insurance program that we pay into every time we receive a paycheck.  If you look at your pay stub, you'll see that deductions have been made for both Medicare and Social Security.  Part of the Social Security deduction is a contribution to the disability insurance fund.
It is important to remember this, since some have implied that those who depend on disability payments for all or part of their income are taking a government handout.  Disability is an insurance program, and when something happens that is covered by our insurance we naturally make a claim.  Filing for disability is no different from calling your car insurance company when you get in an accident.
The problem with all Social Security benefits is that they are managed by the government, and taking the steps that are necessary to ensure that the programs remain viable in the future are politically contentious.  Increasing the premium, for example, feels like a tax increase because it comes out of every worker's paycheck.  Just as it is political suicide to try to raise taxes, it is nearly impossible for politicians to pass legislation that will raise the rate of contribution to those programs.
If steps aren't taken to ensure the long-term liquidity of the Social Security Administration, then there could come a time when premium payments aren't sufficient to cover the cost of benefits.  At that point, the government could become responsible for subsidizing the program or cutting benefits, at which point the federal treasury's broader fiscal position will have an effect on claims.
Sequestration means that every department of the federal government will take a substantial cut in its funding if Congress fails to agree to broad and balanced specific spending cuts that achieve debt reduction goals.  While that rule would force significant cuts in everything from public education to welfare to the department of defense, the blunt instrument would miss the Social Security Administration.
Some pundits have implied that Social Security benefits would be affected.  Unfortunately, this is just another example of untrue political gamesmanship.  The goal of that implication is to frighten those who depend on Social Security programs, including disability, into voting for candidates who express conservative fiscal views.
The reality is that a pending disability application or an existing payment structure is safe from budget sequestration.  In the long term, income from those programs could be threatened unless Social Security contributions rise to meet the programs' obligations.  But that will not happen in January. 
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