Social Security Disability Insurance

Executive Summary
The Social Security Disability Insurance (SSDI) program is an important and vital lifeline to millions of American workers and their families. For 11 million beneficiaries — workers with disabilities, their spouses, and their dependent children — SSDI helps pay the rent and put food on the table. These beneficiaries, including 9 million workers with disabilities, earned coverage under the Social Security system by working for decades before losing their capacity to work at the onset of a severe disability. Though millions of workers have benefited from SSDI over its nearly 60 years of existence, many Americans are unfamiliar with how the program works and who benefits.

This report lays out the basic facts about SSDI and its importance for working families.
• Workers Earn Insurance Coverage by Working and Paying into Social Security. Today more than 150 million Americans are covered by the SSDI program in the event of a disability that prevents work. Current SSDI beneficiaries worked and paid into Social Security for an average of 22 years before becoming eligible for SSDI.
• Disability Insurance Protects the Middle Class. Most individuals receiving SSDI earned middle-class wages before becoming disabled. In the highest-earning five years prior to qualifying for SSDI, worker-beneficiaries earned $42,000 per year, on average.
• Beneficiaries Face Serious Disabilities. SSDI’s worker-beneficiaries face serious, and in many cases life-threatening, disabilities that prevent or limit substantial employment. About one-in-five men and one-in-six women on SSDI die within five years of becoming eligible for the program.
• Disability Benefits are Modest. SSDI is a major source of income for recipients, helping families make ends meet, but SSDI replaces only a fraction – about one-third – of beneficiaries’ pre-disability earnings.
• SSDI Helps Reduce Poverty. Despite modest benefits, the SSDI program helps keep about 3 million Americans out of poverty, and reduces the depth of poverty for another 1.9 million Americans.

In 2016, SSDI beneficiaries could face a deep and abrupt 19 percent reduction in their disability insurance benefits if lawmakers fail to act to remedy a long-projected shortfall in the program’s finances. The shortfall was caused by a long-foreseen increase in the number of beneficiaries as population growth, the aging of the population, and increases in women’s labor force participation raised the number of workers who contribute to and qualify for the program. The Social Security Trust Fund overall currently has enough money to provide full benefits to both DI beneficiaries and retirees for almost the next two decades, but funding across the two programs is out of balance. The President has proposed a simple solution that policymakers have taken many times in the past on a bipartisan basis: rebalance the Social Security program in a way that ensures workers with disabilities, retirees, and survivors receive the full amount of earned and expected benefits while policymakers develop longer-term policies to strengthen the Social Security program as a whole.

Read the official report published July 17, 2015 here…


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