Social Security disability insurance (SSDI) and Supplemental Security Income (SSI) disability payments don't always do what they're supposed to: keep people with disabilities out of poverty. Between the wait for approval and the low benefit amounts, many people go into debt and lose their homes when they become disabled.
Reforms proposed in the last decade have mainly focused on cutting benefits or raising taxes. But recent reform proposals seek to bring seniors and people with disabilities out of poverty by raising benefits for some and changing the benefit calculations for others.
"Stop the Wait" is a grassroots campaign trying to get rid of the five-month waiting period for people found disabled and approved for benefits. The original idea for the waiting period was to save the government money.
Applicants awarded SSDI benefits have to wait five months before they can start collecting payments. In other words, you aren't entitled to any money for the first five full months of your disability. (The waiting period applies only to SSDI benefits, not SSI benefits.)
People who get SSDI benefits are also automatically eligible for Medicare coverage 24 months after their entitlement dates. In the example above, John Smith would be automatically eligible for Medicare in July 2024, two years after his entitlement date (and 29 months after his disability onset date).
In December 2020, Congress passed the ALS Disability Insurance Access Act, which eliminated the five-month waiting period for people diagnosed with ALS, also known as amyotrophic lateral sclerosis, or Lou Gehrig's Disease. The Act also removed the two-year waiting period for Medicare coverage for those with ALS. The bill resulted from more than a decade of hard work by disability rights groups.
A broader bill was introduced in September 2019 by U.S. Senator Bob Casey (D-PA), along with U.S. Representatives Lloyd Doggett (D-TX) and Brian Fitzpatrick (R-PA), that would have eliminated both the five-month waiting period for benefits and the two-year waiting period for Medicare coverage for all SSDI recipients. The bill, called the "Stop the Wait Act," was supported by more than three dozen different disability rights groups.
But it didn't become law in 2019, so the Stop the Wait Act of 2022 was introduced on February 3, 2022 (HR. 6583, S. 3575 – 117th), and again on February 9, 2023, as the Stop the Wait Act of 2023 (H.R. 883 and S. 320 – 118th). But these bills also haven't advanced. As of October 2023, the current version of the bill had been referred to the House Subcommittee on Health, but no action has been taken.
If the bill eventually passes and the five-month waiting period is eliminated, people approved for SSDI will get a lot more disability backpay—an average of $8,000 more.
Applicants who don't qualify for SSDI because they don't have enough work credits might be eligible for SSI. The SSI program is a benefit system for people whose income and assets are below a specific level.
To get SSI for a disability, you must have no more than $2,000 in assets, and your income must fall under the monthly maximum federal amount. (The income limit ranges from about $900 to $1,900 per month, depending on whether your income is from work or another source.)
The maximum monthly benefit changes each year based on the cost of living. The individual amount for 2024 is $943 (up from $914 in 2023). A married couple (if both spouses are disabled) can have no more than $3,000 in assets and can get a maximum payment of $1,371 ($1,415 for 2024).
Most SSI recipients, however, get far less than the maximum. Social Security reduces the monthly payment amount by subtracting any countable income—such as cash or "in-kind" income—that a person receives each month. (In-kind income can be a free place to stay or free food from friends or relatives.)
Although the SSI payment amount usually goes up a bit each year through a cost-of-living adjustment (COLA), the SSI asset limits haven't been updated since 1989. These unrealistic limits prevent many truly needy people from qualifying for SSI.
In June 2021, over 30 lawmakers in the House of Representatives introduced the Supplemental Security Income Restoration Act (H.R. 3824 – 117th). The bill was introduced in the Senate as S. 2065. The Act aimed to keep over eight million Americans receiving SSI benefits from falling below the poverty line by:
The 2021 bill hasn't advanced out of committee.
On September 12, 2023, U.S. Representative Brian Higgens (D-NY) and U.S. Senator Sherrod Brown (D-OH) introduced a pared-down version of the SSI Savings Penalty Elimination Act (H.R. 5408 and S. 2767 – 118th). The 2023 bill would still raise asset limits to $10,000 for individuals and $20,000 for couples—adjusted annually for inflation. But the 2023 Act wouldn't raise benefit amounts or eliminate any benefit reductions. The bill has been referred to the House Ways and Means and Senate Finance Committees.
Every year, the Social Security Administration calculates its annual cost-of-living adjustment (COLA) to offset the effect of inflation. The annual adjustments generally mean higher monthly payments for those receiving benefits. COLA increases are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The Social Security COLA for 2024 is 3.2%, higher than average but significantly less than 2023's inflation-fueled 8.7% increase—the biggest since 1983. (For comparison, the COLA for 2021 was 1.3%.)
Some are calling for federal programs that benefit seniors to base COLAs on the Consumer Price Index for the Elderly (CPI-E) instead of the CPI-W. The idea is that the CPI-E better reflects the cost of living for seniors because it's based on expenses faced by people over 62, including higher health care costs.
In July 2021, Congressmember John Garamendi (D-CA) introduced the Fair COLA for Seniors Act (H.R. 4315 – 117th). This Act would require the Social Security Administration (SSA) and other federal benefit programs to use the CPI-E instead of the CPI-W to determine COLAs for seniors. The bill stalled in committee.
In February 2023, Garamendi again introduced the Fair COLA for Seniors Act (H.R. 716 - 118th), and it was again sent to the appropriate committees. And in March of 2023, Representative Christopher Smith (R-NJ) introduced the Social Security Cost of Living Increase Act of 2023 (H. R. 1688 - 118th). Smith's bill would also require Social Security COLAs to be based on the CPI-E, but it would only affect SSA programs as it doesn't include other federal benefit programs.
Using the CPI-E in recent years would have led to a larger cost-of-living adjustment. But with the COLAs for 2022, 2023, and 2024 at 5.9%, 8.7%, and 3.2%, respectively—significantly higher than in the 10 preceding years (which averaged 1.6%)—it might be difficult for these bills to pass any time soon.
Social Security disability and retirement benefits are paid from payroll taxes and the interest that money earns. In 2022, so many baby boomers started collecting benefits that, for the first time, the program spent more than it received in taxes and interest income.
Social Security now has to start using funds from the Social Security Old Age and Survivors Insurance (OASI) Trust Fund and the Social Security Disability Insurance (DI) Trust Fund to pay the full amount of benefits that people are entitled to.
These trust funds were created just for this purpose, but the combined trust funds (OASDI) are expected to run out in 2034. At that time, disability and retirement benefits would decrease—unless something else changes.
Still, no one predicts that Social Security benefits will go away. Projections are that even if the trust funds are depleted entirely in 2034 and the trust funds are combined, Social Security would still be able to pay out 80% of benefits (declining to 74 percent in 2097).
If the trust funds are kept separate, the Disability Trust Fund isn't projected to run out during the 75-year projection period (through 2097). But the OASI Trust Fund would run out in 2033, at which point retirees would receive about 76% of their benefit.
In April 2021, Senator Mitt Romney (R-UT) reintroduced the TRUST (Time to Rescue United States' Trusts) Act (S. 1295 – 117th). The bill aims to address the shortfalls faced by Social Security and other federal programs that rely on government trust funds.
The TRUST Act calls for the establishment of congressional "rescue committees," made up of 12 members of Congress, that would develop recommendations and legislation. After getting legislation from the committees, Congress would then be allowed to use a faster process to turn the changes into law.
Disability advocates, however, worry that the Act could be used to make cuts to Social Security disability and retirement benefits. As of late 2023, the Act didn't seem likely to pass the Senate.
Updated October 19, 2023