Disability Advocates Push New Reforms for Social Security Disability

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 end up going into debt and losing their homes when they become disabled. Reforms proposed in the last decade have mostly 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: Eliminate the Waiting Period for SSDI Benefits and Medicare Coverage

"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.

How the Waiting Period Works

Applicants who are awarded SSDI benefits have to wait five months before they're eligible to start collecting payment. In other words, applicants aren't entitled to any money for the first full five months of their disability. (The waiting period applies only to SSDI benefits, not SSI benefits.)

Individuals who get SSDI benefits are also automatically eligible for Medicare coverage after they've been entitled to benefits for 24 months. 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).

Changes to the Waiting Period Rule

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 was the product of more than a decade of hard work by disability rights groups.

A broader bill had been 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). This bill 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 (S. 2496 – 116^th), which was called the Stop the Wait Act, was supported by more than three dozen different disability rights groups.

The bill didn't become law, but Casey, Doggett, and Fitzpatrick reintroduced the Stop the Wait Act of 2022 on February 3, 2022 (HR. 6583, S. 3575 – 117^th). The new Act would also increase benefits by a small amount and provide a minimum benefit for low-wage earners. With many applicants with long COVID starting to apply for disability benefits, the bill might stand a better chance of getting passed. (As of January 2023, the bill was referred to the Subcommittee on Health, but no action has been taken on it in almost a year.) If the bill passes, people approved for SSDI will get a lot more disability backpay—an average of $6,000 more.

Improving SSI to Bring Recipients Out of Poverty

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.

How SSI Works

To get SSI for a disability, an individual must have no more than $2,000 in assets and their income must fall under the monthly maximum federal amount. (The income limit ranges from about $700 to $1,500 per month, depending on whether the income is from work or not.) In 2023, the maximum payment for an individual is $914 per month.

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.

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.)

The SSI payment amount usually goes up a bit each year through a cost-of-living adjustment (COLA), but the SSI asset limits haven't been updated since 1989. These unrealistic limits prevent many truly needy people from qualifying for SSI.

The SSI Restoration Act

In June 2021, over 30 lawmakers in the House of Representatives introduced the Supplemental Security Income Restoration Act (S. 2065 – 117^th). The Act hopes to keep over 8 million Americans who receive SSI benefits from falling below the poverty line by expanding the asset and income limits, raising the minimum benefit, and eliminating reductions in benefits. Here are the key features of the bill.

Increasing the benefit. The SSI Restoration Act would increase the minimum benefit to 100% of the federal poverty level and pay married couples who qualify for benefits at the same rate as two individuals.

Expanding the asset limits. The Act would raise the financial asset limitation to $10,000 for an individual and $20,000 for a married couple, levels that represent more realistic amounts for planning for emergencies and other unexpected expenses.

Eliminating reductions in benefits. The Act would eliminate the rule requiring Social Security to reduce benefits for SSI beneficiaries who receive non-cash in-kind assistance.

As of January of 2023, the bill was pending with the House Committee on Ways and Means. Many in the disability community hoped that at least parts of the bill would pass in 2023.

Updating the COLA for Retirement and Disability Benefits

Every year, the Social Security Administration calculates its annual cost-of-living adjustment (COLA) to offset the effect of inflation. COLA increases are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Due to significant inflation, the COLA for 2023 is 8.7%, which is the biggest increase since 1983. (For comparison, the COLA for 2021 was 1.3%.)

In July 2021, Congressmember John Garamendi (D-CA) introduced the Fair COLA for Seniors Act (H.R. 4315 – 117^th). This Act would require the Social Security Administration to use the Consumer Price Index for the Elderly (CPI-E) instead of the CPI-W, the idea being that the CPI-E is a fairer COLA for seniors. Some say the CPI-E better reflects the expenses seniors face because it's based on expenses that people aged 62 and older face, including higher health care costs. In most recent years, using the CPI-E would have led to a larger cost-of-living adjustment. President Biden's campaign plans for Social Security included moving to the CPI-E, but with the COLA so high for 2023, it might be difficult to get this bill (last referred to the Subcommittee on Disability Assistance in September 2021) passed any time soon.

Making Sure the Disability Program Has Money

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.

Where Will the Money Come From?

Social Security now has to start using funds from the Social Security Old Age and Survivors Insurance Trust Fund and the Social Security Disability 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 are expected to run out in 2034. At that time, disability and retirement benefits would decrease—unless something changes.

Still, no one predicts that Social Security benefits will go away. Projections are that even if the trust funds are completely depleted in 2034, and the trust funds were combined, Social Security would still be able to pay out 78% of benefits. If the trust funds are kept separate, the Disability Trust Fund would run out in 2057, at which point disability recipients will receive about 91% of their anticipated benefit, and the Old Age and Survivors Trust Fund would run out in 2033, at which point retirees would receive about 76% of their benefit.

"Rescue Committees"

In April 2021, Senator Mitt Romney (R-UT) reintroduced the TRUST (Time to Rescue United States' Trusts) Act (S. 1295 – 117^th). The goal of the bill is to address the shortfalls faced by Social Security and other federal programs that rely on government trust funds.

The TRUST Act would establish 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 actually be used to make cuts to Social Security disability and retirement benefits. As of early 2023, the Act did not seem likely to pass the Senate.

_{Updated January 24, 2023}