{ "id": "R43318", "type": "CRS Report", "typeId": "REPORTS", "number": "R43318", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 448935, "date": "2016-01-19", "retrieved": "2016-04-06T17:27:47.968641", "title": "The Social Security Disability Insurance (DI) Trust Fund: Background and Current Status", "summary": "Social Security Disability Insurance (SSDI) provides benefits to nonelderly workers and their eligible dependents if the worker paid Social Security taxes for a certain number of years and is unable to perform substantial work due to a qualifying impairment. As in Old-Age and Survivors Insurance (OASI)\u2014the retirement component of Social Security\u2014benefits are based on a worker\u2019s past earnings in covered employment. In December 2014, SSDI provided disability insurance coverage to more than 151 million people and paid benefits to about 9 million disabled workers and 2 million of their spouses and children.\nBenefits and administrative costs for SSDI and OASI are financed primarily by dedicated payroll and self-employment taxes levied on the earnings of covered workers, which are deposited in the Federal Disability Insurance (DI) Trust Fund and the Federal Old-Age and Survivors Insurance (OASI) Trust Fund, respectively. The combined Social Security tax on earnings is 12.40%, which is split equally between workers and employers (6.20% each). Of that amount, 2.37% is allocated to the DI trust fund and 10.03% is allocated to the OASI trust fund. Each trust fund is a legally distinct account in the U.S. Treasury, and under current law, the two trust funds may not borrow from one another.\nOver the past few years, Congress has grown increasingly concerned with the financial outlook of the DI trust fund. Cost has exceeded total income since 2009, causing the balance of the DI trust fund to shrink. In their July 2015 report, the Social Security trustees projected that the DI trust fund would be depleted in the fourth quarter of calendar year 2016. Upon depletion of its asset reserves, the DI trust fund was projected to have enough ongoing revenues to pay only about 80% of scheduled benefits. The trustees projected that the OASI trust fund would be depleted in 2035.\nThe Social Security Act provides no guidance on the payment of benefits once a trust fund\u2019s asset reserves have been depleted and current tax revenues are insufficient to meet current cost. Although individuals who meet Social Security\u2019s eligibility requirements are legally entitled to disability benefits, a provision in the Antideficiency Act prohibits a federal agency from spending in excess of available funds. Because the Social Security Act stipulates that SSDI benefit payments shall be made only from the DI trust fund, without a change in the law, monthly cash payments to beneficiaries could be delayed or reduced if the DI trust fund were depleted.\nThe decreasing solvency of the DI trust fund is the result of an increasing imbalance between the fund\u2019s income and cost. Over the past 20 years, tax revenues to the DI trust fund have remained relatively flat as a percentage of taxable payroll, whereas cost as a share of taxable payroll has grown markedly. The increase in cost stems largely from the growth in the number of beneficiaries in the program. Between 1995 and 2014, the number of disabled workers and their dependents in receipt of SSDI grew 85%, from 5.9 million to 10.9 million. Because benefit payments account for nearly all program spending, the growth in the SSDI rolls has contributed heavily to the financial difficulties of the DI trust fund.\nOn November 2, 2015, President Barack Obama signed into law the Bipartisan Budget Act of 2015 (H.R. 1314; P.L. 114-74). Among its many provisions, the act authorized a temporary reallocation of the Social Security payroll tax rate between the OASI and DI trust funds to provide DI with a larger share for 2016 through 2018. Specifically, the DI trust fund\u2019s share of the combined tax rate increased by 0.57 percentage point at the beginning of 2016, from 1.80% to 2.37%. Because the act did not change the combined payroll tax rate of 12.40%, the portion of the tax rate allocated to OASI decreased by a corresponding amount. This means that OASI\u2019s share of the combined tax rate declined by 0.57 percentage point at the start of 2016, from 10.60% to 10.03%. For 2019 and later, the shares allocated to the DI and OASI trust funds are scheduled to return to their 2015 levels (i.e., 1.80% to the DI trust fund and 10.60% to the OASI trust fund).\nThe Social Security Administration\u2019s Office of the Chief Actuary (OACT) projects that the reallocation will extend the solvency of the DI trust fund from the fourth quarter of 2016 to the third quarter of 2022. Although the reallocation will reduce the solvency of the OASI trust fund slightly, OACT estimates that the depletion year for OASI will remain unchanged at 2035.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43318", "sha1": "5a98227a48e8b3b90caff4b1ae7846fc891d1f12", "filename": "files/20160119_R43318_5a98227a48e8b3b90caff4b1ae7846fc891d1f12.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43318", "sha1": "e4460fb86e8a7e71a36c4bbdb8fa040bd2332c44", "filename": "files/20160119_R43318_e4460fb86e8a7e71a36c4bbdb8fa040bd2332c44.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 2912, "name": "Disability Rights and Benefits" }, { "source": "IBCList", "id": 328, "name": "Social Security" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc817418/", "id": "R43318_2014Aug21", "date": "2014-08-21", "retrieved": "2016-03-19T13:57:26", "title": "Social Security Disability Insurance (DI) Trust Fund: Background and Solvency Issues", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140821_R43318_3b517414259be4c4cedf6d670ef461e0cd983cb8.pdf" }, { "format": "HTML", "filename": "files/20140821_R43318_3b517414259be4c4cedf6d670ef461e0cd983cb8.html" } ], "topics": [] } ], "topics": [ "Domestic Social Policy", "Economic Policy" ] }