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 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: 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 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 2026, 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 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.

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.

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, 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 2025 is $967. A married couple (if both spouses are disabled) can have no more than $3,000 in assets and can get a maximum payment of $1,450 in 2025.

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.

The SSI Restoration Act

In June 2021, over 30 lawmakers in the House of Representatives introduced the Supplemental Security Income Restoration Act (H.R. 3824 – 117th). The Act aimed to keep over eight million Americans receiving SSI benefits from falling below the poverty line by:

• expanding the asset and income limits
• raising the minimum benefit to 100% of the federal poverty level
• paying married couples the same as two individuals, and
• eliminating reductions in benefits for those receiving non-cash in-kind assistance.

The 2021 bill didn't advance out of committee, but it was reintroduced in 2024.

In September 2023, U.S. Representative Brian Higgens (D-NY) and U.S. Senator Sherrod Brown (D-OH) introduced the SSI Savings Penalty Elimination Act (H.R. 5408 and S. 2767 – 118th). The bill raises SSI resource limits to $10,000 for individuals and $20,000 for couples—adjusted annually for inflation. The bill has been referred to the House Ways and Means and Senate Finance Committees.

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. 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 2025 is 2.5%, higher than average but less than 2024's 3.2% increase.

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.

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.

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 (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 2035. 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 2035 and the trust funds are combined, Social Security would still be able to pay out 83% of benefits. (2024 Trustees Report.)

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 79% of their benefit.

Proposed TRUST Act and Fiscal Stability Act

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

The TRUST Act didn't go anywhere, but Senator Romney introduced another bill, called the Fiscal Stability Act (S. 3262), along with Senator Joe Manchin, to create a fiscal commission tasked with finding fiscal solutions to stabilize and decrease the national debt. One of the bill's aims is to improve the solvency of the trust funds over the next 75 years.