Archive for the ‘Social Security’ Category

CRS — Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) (August 1, 2014)

August 15, 2014 Comments off

Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

In general, the goal of disability insurance is to replace a portion of a worker’s income should illness or disability prevent him or her from working. Individuals may receive disability benefits from either federal or state governments, or from private insurers. This report presents information on two types of disability programs provided through the federal government: the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. SSDI is an insurance program that provides benefits to individuals who have paid into the system and meet certain minimum work requirements. In contrast, SSI is a means-tested program that does not have work or contribution requirements, but restricts benefits to those who meet certain financial eligibility criteria.

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CRS — Social Security: Calculation and History of Taxing Benefits (August 4, 2014)

August 13, 2014 Comments off

Social Security: Calculation and History of Taxing Benefits (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Social Security provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. Those benefits were exempt from federal income tax, but in 1983, Congress approved recommendations from the National Commission on Social Security Reform (also known as the Greenspan Commission) to tax the benefits of some higher-income Social Security beneficiaries. Beginning in 1984, up to 50% of Social Security and Railroad Retirement Tier I benefits were taxable for individuals whose provisional income exceeds $25,000. The threshold is $32,000 for married couples. Provisional income equals adjusted gross income (total income from all sources recognized for tax purposes) plus certain otherwise tax-exempt income, including half of Social Security and Railroad Retirement Tier I benefits. The proceeds from taxing Social Security and Railroad Retirement Tier I benefits at up to the 50% rate are credited to the Old-Age and Survivors Insurance (OASI) trust fund, the Disability Insurance (DI) trust fund, and the Railroad Retirement system respectively, based on the source of the benefit taxed.

CRS — Social Security: The Trust Fund (July 31, 2014)

August 13, 2014 Comments off

Social Security: The Trust Fund (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Social Security program pays benefits to retired or disabled workers and their family members, and to family members of deceased workers. (A person may receive retired-worker benefits and continue to participate in the labor force.) Program income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) trust fund and the Federal Disability Insurance (DI) trust fund. This report refers to the two trust funds as an aggregate Social Security trust fund and discusses the operations of the OASI and DI trust funds on a combined basis.

Social Security’s Financial Outlook: The 2014 Update in Perspective

July 30, 2014 Comments off

Social Security’s Financial Outlook: The 2014 Update in Perspective
Source: Center for Retirement Research at Boston College

The brief’s key findings are:

The 2014 Trustees Report shows little change from last year:

  • Social Security’s 75-year deficit rose modestly to 2.88 percent of payroll.
  • But the deficit as a percent of GDP is still 1 percent.
  • And trust fund exhaustion is still 2033, after which payroll taxes still cover about three quarters of promised benefits.

The shortfall is manageable but, with the deficit rising to about 4 percent in two decades, action should be taken soon to avoid larger tax/benefit changes later.

And the disability insurance program needs immediate attention, as its trust fund is expected to be exhausted in 2016.

Social Security Board of Trustees: No Change in Projected Year of Trust Fund Reserve Depletion

July 28, 2014 Comments off

Social Security Board of Trustees: No Change in Projected Year of Trust Fund Reserve Depletion
Source: Social Security Administration

The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77 percent of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 81 percent of benefits still payable.

In the 2014 Annual Report to Congress, the Trustees announced:

  • The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2033 – the same as projected last year. At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.88 percent of taxable payroll — 0.16 percentage point larger than in last year’s report.

CRS — Social Security: The Lump-Sum Death Benefit

July 25, 2014 Comments off

Social Security: The Lump-Sum Death Benefit (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

When a worker who is insured by Social Security and living with a spouse dies, the spouse is entitled to a lump-sum death benefit of $255. If there is no such spouse, the payment can be made to a surviving child who is receiving or is eligible to receive benefits based on the deceased person’s work. In the majority of deaths, however, no payment is made.

The death benefit used to be a more important part of Social Security, but the payment has been fixed at $255 for the past four decades, during which inflation has eroded its value. At the same time, the real value of other Social Security benefits has increased. Total federal spending on lump-sum death benefits is now about $200 million, only 0.03% of the total Social Security benefits.

Although the benefit was once linked to burial expenses and is sometimes still referred to as a “funeral benefit,” it no longer has any legal connection with funeral expenses.

Some proposals would have targeted the death benefit to those with the greatest need, increased the benefit, or eliminated it.

Chart Book: Social Security Disability Insurance

July 22, 2014 Comments off

Chart Book: Social Security Disability Insurance
Source: Center on Budget and Policy Priorities

Disability Insurance (DI) is an integral part of Social Security. It provides modest but vital benefits to workers who can no longer support themselves on account of a serious and long-lasting medical impairment. The Social Security Administration (SSA) administers the DI program.

In December 2013, 8.9 million people received disabled-worker benefits from Social Security. Payments also went to some of their family members: 160,000 spouses and 1.9 million children.

DI benefits are financed primarily by a portion of the Social Security payroll tax and totaled about $140 billion in 2013. That’s 4 percent of the federal budget and less than 1 percent of the gross domestic product (GDP). Employers and employees each pay a DI tax of 0.9 percent on earnings up to a specified amount, currently $117,000. Financial transactions are handled through a DI trust fund, which receives payroll tax revenues and pays out benefits and which is legally separate from the much larger Social Security retirement fund. Under current projections, the DI trust fund will need replenishment in 2016.

CBO — What Are the Causes of Projected Growth in Spending for Social Security and Major Health Care Programs?

July 18, 2014 Comments off

What Are the Causes of Projected Growth in Spending for Social Security and Major Health Care Programs?
Source: Congressional Budget Office

A CBO blog post yesterday noted that federal spending is projected to rise noticeably relative to the size of the economy over the long term because of growth in spending for Social Security, major health care programs, and interest on the government’s debt. Today we will discuss the factors that account for the projected growth in the first two of those major components of the budget.

Under current law, spending for Social Security would increase from almost 5 percent of gross domestic product (GDP) in 2014 to more than 6 percent in 2039 and beyond (see the figure below). Even more of the anticipated growth is expected to come from the government’s major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies offered through health insurance exchanges): CBO projects that, under current law, total outlays for those programs, net of Medicare premiums and certain other offsetting receipts, would grow much faster than the overall economy, increasing from just below 5 percent of GDP now to 8 percent in 2039.

New From the GAO

July 16, 2014 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office


1. Medicaid: Assessment of Variation among States in Per-Enrollee Spending. GAO-14-456, June 16.
Highlights –

2. Special Education: Additional Federal Actions Could Help Address Unique Challenges of Educating Children in Nursing Homes. GAO-14-585, July 16.
Highlights –

3. Coastal Zone Management: Opportunities Exist for NOAA to Enhance Its Use of Performance Information. GAO-14-592, July 16.
Highlights –

4. Supplemental Security Income: Wages Reported for Recipients Show Indications of Possible SSN Misuse. GAO-14-597, July 16.
Highlights –


1. U.S. Launch Enterprise: Acquisition Best Practices Can Benefit Future Efforts, by Cristina Chaplain, director, acquisition and sourcing management, before the Senate Committee on Commerce, Science, and Transportation and the Subcommittee on Strategic Forces, Senate Committee on Armed Services. GAO-14-776T, July 16.

2. High-Containment Laboratories: Recent Incidents of Biosafety Lapses, by Nancy Kingsbury, Ph.D., managing director, applied research and methods, before the Subcommittee on Oversight and Investigations, House Committee on Energy and Commerce. GAO-14-785T, July 16.
Highlights –

CRS — Low-Income Assistance Programs: Trends in Federal Spending

July 16, 2014 Comments off

Low-Income Assistance Programs: Trends in Federal Spending (PDF)
Source: Congressional Research Service (via University of North Texas Digital Library)

This report examines the spending trends of 10 major need-tested benefit programs or groups of programs: (1) health care from Medicaid and the Children’s Health Insurance Program (CHIP); (2) the refundable portion of the health insurance tax credit enacted in the 2010 health care reform law; (3) the Supplemental Nutrition Assistance Program (SNAP); (4) assisted housing; (5) financial assistance for post-secondary students (Pell Grants); (6) compensatory education grants to school districts; (7) the Earned Income Tax Credit (EITC); (8) the Additional Child Tax Credit (ACTC); (9) Supplemental Security Income (SSI); and (10) Family Support Payments. The common feature of need-tested programs is that they provide benefits, services, or funding based on a measure of limited financial resources (income and sometimes assets). However, other than that common feature, the programs differ considerably in their target populations, services, and focus.

Effects of Heath Care Reform on Disability Insurance Claiming

July 15, 2014 Comments off

Effects of Heath Care Reform on Disability Insurance Claiming
Source: RAND Corporation

The Affordable Care Act (ACA) will fundamentally change the conditions that influence Americans to apply for federal disability insurance benefits. Because disability insurance confers health insurance in addition to cash benefits, it is an attractive option for many individuals with work-limiting disabilities. At the same time, leaving employment to apply for disability insurance benefits (a requirement for application) can be risky for those who obtain health insurance through their employers, making it a relatively unattractive option for others. By enabling access to affordable private health insurance and expanding access to subsidized public health insurance, the ACA alters the calculus of disability claiming decisions. Whether it will lead to more or fewer applications for disability benefits is not obvious. Research summarized here offers empirical evidence that, on net, disability applications are likely to decrease.

There is great interest in this issue because the numbers of disability beneficiaries have swelled in recent years relative to the number of workers paying into the system, leading the Board of Trustees of the Federal Disability Insurance Trust Fund to predict that the system will run out of funds by 2016.

It is too soon, of course, to know what the actual effects of national health reform will be on disability applications. But a recent RAND study has examined data from Massachusetts, which implemented reforms in 2006 that share the key features of the ACA, including creation of an insurance exchange as a source of lower-cost individual coverage and expansion of Medicaid (subsidized coverage for low-income individuals). Using administrative data from the Social Security Administration (SSA), the researchers analyzed changes in application rates for the two federal disability insurance programs — Supplemental Security Insurance (SSI) and Social Security Disability Insurance (SSDI) — in Massachusetts before and after the reform, statewide and by county, and compared changes to those in neighboring states and counties.

We summarize what the researchers expected to find in the data, what they actually found, and the implications of their results for national health reform.

CBO — Answers to Questions From Senator Hatch About Various Options for Payroll Taxes and Social Security

July 14, 2014 Comments off

Answers to Questions From Senator Hatch About Various Options for Payroll Taxes and Social Security
Source: Congressional Budget Office

Senator Orrin Hatch asked CBO several questions about the implications of altering the Social Security payroll tax rates as well as the taxable maximum (the maximum amount of earnings on which those payroll taxes are imposed). This document provides CBO’s answers to those questions.

For the various options discussed, CBO presents the changes that would result in the annual payroll taxes paid by employees and employers, and for people born at various times and with various levels of earnings, the change in their median lifetime payroll taxes and median initial replacement rates (benefits as a percentage of career-average earnings).

CBO based its answers on projections issued last September in The 2013 Long-Term Budget Outlook. In that report, the 75-year projection period for Social Security spans 2013 to 2087. All changes to payroll tax rates and the taxable maximum analyzed for this report would begin in January 2015.

CRS — Social Security: Minimum Benefits

July 7, 2014 Comments off

Social Security: Minimum Benefits (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Social Security’s minimum benefit provision, the Special Minimum Primary Insurance Amount (PIA), is an alternative benefit formula that increases benefits paid to workers who had low earnings for many years and to their dependents and survivors. The Special Minimum PIA is based on the number of years a person has worked, whereas the standard benefit formula is based on a worker’s average lifetime earnings. The worker receives the higher of the two benefits.

Information For Agencies And Other Organizations: How To Get Proof Of Social Security Numbers Or Benefits

June 24, 2014 Comments off

Information For Agencies And Other Organizations: How To Get Proof Of Social Security Numbers Or Benefits (PDF)
Source: Social Security Administration

To efficiently meet the needs of the public, we will begin phasing-in two service changes. Effective August 1, 2014, we will stop providing Social Security number (SSN) printouts and, effective October 1, 2014, we will offer benefit verifications in our field offices only in emergency situations, in cases of hardship, or when a benefit verification is needed and cannot be obtained through another service channel. In January 2013, we made benefit verifications available online. The public can get an instant letter online with a personal my Social Security account, or they may continue to call us toll-free to request a letter by mail. Our local offices will continue to do all that they can to assist members of the community. Since we now offer more convenient services, we are asking agencies and other organizations to use our specially developed online methods to obtain this information and assist our mutual customers in adjusting to this change.

Important Information About Social Security Benefits For Same-Sex Couples (updated)

June 23, 2014 Comments off

Important Information About Social Security Benefits For Same-Sex Couples (PDF)
Source: Social Security Administration

On June 26, 2013, the Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional. Therefore, Social Security no longer is prevented from recognizing same-sex marriages for purposes of determining entitlement to or eligibility for benefits. Social Security is now processing some retirement, surviving spouse and lump-sum death payment claims for same-sex couples and paying benefits where they are due. If you are in, or are a surviving spouse of a same-sex marriage or other legal same-sex relationship, we encourage you to apply right away for benefits. You can apply for most benefits online at

We also are considering same-sex marriages when processing some claims for Supplemental Security Income (SSI). Marriage may affect your SSI eligibility or payment amount.

Reduction in Face – to – Face Services at the Social Security Administration

June 20, 2014 Comments off

Reduction in Face-to-Face Services at the Social Security Administration
Source: U.S. Senate Committee on Aging

From a customer service perspective, the Social Security Administration (SSA) has set a standard for superior customer service among governmental agencies. It has historically received high marks from beneficiaries, and most Americans do not have to travel far to reach a SSA field office, where they can apply for benefits, become a representative payee for someone incapable of managing his or her finances, or apply for a name change after marriage.

Yet continuing budget constraints, which began at the start of the decade, have forced SSA to make difficult decisions to reduce service to the public. At a time when Baby Boomers are retiring and filing disability and retirement claims at record numbers, SSA has shed 11,000 workers agency – wide over three years. Hiring freezes resulted in disproportionate staffing across the nation’s 1,245 field offices, with some offices losing a quarter of their staff. These past five years have also served witness to the largest five-year decline in the number of field offices in the agency’s 79-year history as 64 field offices have been shuttered, in addition to the closure of 533 temporary mobile offices known as contact stations. SSA has also reduced or eliminated a variety of in – person services as it attempts to keep up with rising workloads and shift seniors and others online to conduct their business.

Committee staff has spent seven months examining the impact and rationale behind these service cuts, examining all documented and available written justifications for field office closures since 2010. SSA reported to Congress last month that it examines six major factors before determining whether to close a field office. Our conclusion: on four of these six metrics, the data the agency has compiled to justify its closures are incomplete or insufficient, and ultimately SSA has no clear way to compare offices against each other and determine which offices are most needed by the American public.

Hat tip: PW

Effects of Employer Health Insurance on Disability Insurance Claiming

May 28, 2014 Comments off

Effects of Employer Health Insurance on Disability Insurance Claiming
Source: RAND Corporation

A new RAND study offers rigorous analysis of the effect of employer-provided health insurance on workers’ decisions to leave the workplace and apply for disability insurance when they become disabled. Specifically, it tests whether individuals who rely on their employers for health insurance are more likely to continue working after the onset of a disabling health condition than are those with other health insurance options, such as coverage from a spouse’s employer.

The study finds that employer-provided insurance has a strong influence on a certain type of newly disabled worker — those who largely retain their physical functional capacity and whose disability is expected to have high medical costs, such as cancer. These workers are 23 percent more likely to continue to work in the years immediately following disability onset (see the figure) if they rely on their employer for health insurance than are those with the option of obtaining health insurance through a spouse. Workers with these types of health problems represent 20 percent of newly disabled workers aged 51 or older.

By contrast, there is little evidence of employment lock for other types of workers with disabilities, such as those with more severe disabilities or lower expected medical costs. The researchers hypothesize that the reason most workers do not continue to work to retain their employer-based insurance is that they may be physically or mentally unable to work: i.e., the effort cost of work is so large that it outweighs the influence of other factors, such as retaining health insurance. Another reason could be that the value of health insurance may be low for some conditions.

At the same time, researchers do not find evidence of an effect on disability claiming, even among workers with low-severity and high-cost conditions: i.e., they do not find that workers who decide to stay employed would have applied for disability insurance benefits if they had other options for their health insurance.

New From the GAO

May 27, 2014 Comments off

New GAO Report
Source: Government Accountability Office

Retirement Security: Challenges for Those Claiming Social Security Benefits Early and New Health Coverage Options. GAO-14-311, April 23.
Highlights –

Earnings and Employment Data for Workers Covered Under Social Security and Medicare, by State and County, 2011

May 23, 2014 Comments off

Earnings and Employment Data for Workers Covered Under Social Security and Medicare, by State and County, 2011
Source: Social Security Administration

Social Security

  • In 2011, 158.6 million workers had earnings taxable under the Social Security program. About 140.9 million had only wages, 10.4 million had only self-employment income, and 7.3 million had both.
  • Social Security taxable earnings totaled $5.487 trillion, which includes earnings up to the taxable maximum of $106,800.
  • Social Security taxes totaled about 680 billion.


  • In 2011, 162.6 million workers had earnings taxable under the Medicare program. About 144.1 million had only wages, 10.2 million had only self-employment income, and 8.4 million had both.
  • Medicare taxable earnings totaled $6.810 trillion.
  • Medicare taxes totaled about $197 billion.

SSA — The Medical Improvement Review Standard During Continuing Disability Reviews

May 22, 2014 Comments off

The Medical Improvement Review Standard During Continuing Disability Reviews
Source: Social Security Administration, Office of Inspector General

Under the Medical Improvement Review Standard (MIRS), an individual’s disability continues unless the (1) disabling condition has improved since the last favorable disability determination and (2) individual can engage in substantial gainful activity.

SSA may apply an exception to MIRS. The exceptions allow a finding that disability ceased in limited situations without showing medical improvement occurred, but evidence clearly showed the person should no longer be, or should never have been, considered disabled.

The purpose of this report was to (a) determine whether SSA would consider beneficiaries disabled using the Initial Disability Standard, rather than MIRS, during continuing disability reviews (CDR) and (b) evaluate data on the MIRS exceptions.


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