[nfbmi-talk] Social Security - SSDI

Terry D. Eagle terrydeagle at yahoo.com
Tue Nov 10 23:49:00 UTC 2015


Signed into law, U.S. Budget Deal Protects Social Security SSDI

We were close to loosing 20 percent of SSDI! 

One of the most important elements of the deal for seniors, experts said, is
the shoring up of Social Security disability insurance. The program was in
financial crisis, and beneficiaries were facing a potential 20 percent cut
in their benefits in 2016.

The budget deal tweaks how payments into Social Security by employers and
employees are allocated to give the disability insurance program some
breathing room. Currently, the government collects 6.2 percent of income
from employees and 6.2 percent from employers (along with 12.4 percent from
those who are self-employed.) Of that, 10.6 percent goes to the main Social
Security trust fund, and the rest, 1.8 percent, to the disability fund.

The deal increases the share going to the disability fund to 2.37 percent
for three years, buying time for Congress to come up with a longer term
solution to the challenges facing both Social Security trust funds.

"That's a lot of peace of mind for 11 million Americans [receiving
disability benefits] and their families," said Firvida, noting that
roughly70 percent of beneficiaries are age 50 or over.

Johnson points to another element of the deal as especially important for
seniors: a move to curb Medicare Part B premium hikes. Social Security
payments will not be increasing next year because inflation is so low, but
regulations bar Social Security recipients from seeing their checks reduced.

At the same time, Medicare Part B premiums were on track to increase.

As a result, the roughly 70 percent of beneficiaries who have premiums
deducted from the Social Security check would not pay higher premiums -
but30 percent of beneficiaries would have had to cover the entire increase.
Their premiums could have risen some 52 percent.

The budget deal addresses this by having the Treasury lend $7.5 billion to
the Medicare program, so beneficiaries paying the increase will see premiums
rise roughly 15 percent - a sharp hike, but much less than without the loan.
And in 2017, Medicare beneficiaries will start repaying the loan to the tune
of $3 per beneficiary per month.

social security medicare


Hill Street Studios Getty Images

Other changes have been met with dismay in some quarters, notably tweaks to
the Social Security program to eliminate certain claiming strategies. These
strategies, commonly known as "file and suspend" and "claim now, claim more
later," generally allowed married couples to have one spouse start claiming
spousal benefits at full retirement age while the other allowed his or her
own benefit to continue growing. The Center for Retirement Research at
Boston College estimated  that these strategies cost the government roughly
$10 billion annually.

The budget deal eliminates these claiming strategies, though the provision
does not take effect for six months. In addition, people who are eligible
for Social Security, generally those 62 and older, can opt into one of these
strategies if they wish.

Firvida said the end of the claiming strategies will disappoint some people
who had hoped to use them, but noted that those people tend to be more
affluent, and thus better able to cope with the change.(The Center for
Retirement Research experts also took that view, noting of "claim now, claim
more later" that "the main beneficiaries of this strategy are two-earner
couples, with a significant portion of the benefits going to those in the
upper portion of the wealth distribution.") Firvida also stressed that no
one currently using these strategies or eligible to use them will be
stopped. "Without question, we feel like this is a net win," she said. "The
Medicare issue is a serious issue for millions of folks. I can't even
compare 16 million Medicare recipients and 11 million disability insurance
recipients to this loophole closing and no one being impacted. You can't
even compare these things."

The budget deal is now signed into law, giving policymakers time to consider
longer term fixes to Social Security and Medicare. Plenty of skeptics
doubted that such a deal could be reached, and many more question whether
substantive reform will pass. Still, the deal at least provides enough time
for such work to begin.

"These are really good changes, common-sense policy reforms that are going
to protect millions of retirees and disabled Americans from serious harm,"
said Johnson.

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