Social Security Disability Fund: Out of Cash by 2017

Meanwhile, backlogged applicants wait years for benefits
By Evann Gastaldo,  Newser Staff
Posted Aug 22, 2011 11:44 AM CDT
Social Security Disability Fund: Out of Cash by 2017
In this Nov. 15, 2010, file photo Social Security Commissioner Michael Astrue responds to questions at a hearing in Akron, Ohio.   (AP Photo/Tony Dejak, File)

As Washington focuses on how to fix the Social Security retirement program, it’s the disability program that’s truly in danger—and facing insolvency, soon. Flooded with applications from an aging population and laid-off workers with disabilities who can’t find new jobs, the disability fund is now estimated to run out of money by 2017 if Congress doesn’t make changes; that's some 20 years before the retirement fund is expected to run dry. Applications for disability benefits are up almost 50% from 10 years ago, the AP reports, with 3.3 million expected to apply this year.

In addition to running out of money, the troubled program also has a growing backlog: Many applicants wait years before receiving benefits. But at the same time, many others are overpaid—last year, $1.4 billion was overpaid, mostly to people who no longer qualified after getting new jobs. Solutions are hard to come by; trustees want Congress to reallocate money from the retirement program to the disability program, but that would only be a short-term solution that would also hurt the retirement program. For now, Congress will focus on those overpayments, a tactic it believes could save almost $12 billion over the next 10 years. (Read more Social Security stories.)

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