This week is National My Social Security Week, which encourages citizens to register for an online Social Security account.
The campaign has been overshadowed, however, by news from an annual report released Wednesday by the trustees who oversee the Social Security fund.
According to the report, funds for the Social Security Disability Insurance program (DI) — which provides monthly benefits to disabled workers and their families — could be depleted by the fourth quarter of 2016.
Once that reserve is depleted, continuing income slated for the Disability Insurance Trust Fund would only be enough to cover 81 percent of disability insurance benefits, according to the annual report.
So the reserve’s depletion would trigger an automatic 19 percent reduction in benefits, the Associated Press reports:
Congress could shift tax revenue from Social Security’s much larger retirement fund. But Republicans say they want changes in the program to reduce fraud and to encourage disabled workers to re-enter the work force.
A 2009 report from the nonprofit National Bureau of Economic Research noted that the number of non-elderly adults receiving disability benefits had increased by 76 percent over the prior two decades:
Recent work has suggested that the growth during this period was to some extent driven by an increase in the financial incentive to apply for DI and by a liberalization of the program’s medical eligibility criteria.
A September 2014 report from the Office of the Inspector General (OIG) at the Social Security Administration (SSA) called the SSA’s anti-fraud efforts “admirable” but noted that “major fraud vulnerabilities still exist and must be addressed with broad systems enhancements and significant policy changes”:
How SSA plans to address these vulnerabilities and limit disability fraud and abuse should be a part of the agency’s long-term planning and budget process. Earlier this year, Acting Commissioner of Social Security Carolyn Colvin reported to the Subcommittee on Social Security that the agency does not track spending on anti-fraud activities. Going forward, that must change.
The report urged the SSA to make fraud prevention a priority, and it recommended investing in anti-fraud tools and “promoting an Agency culture that has zero tolerance for fraud and is committed to ensuring all benefit allowances are accurate and supported with proper evidence.”
The good news in Wednesday’s annual report is that the reserve for Social Security retirement funds is in better shape. It is now projected to be depleted in 2035, which is one year later than was projected in last year’s report.
Do projections like these affect your retirement planning? Share your thoughts in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.