Longer Waiting Time for Approval is Benefitting Social Security Disability Fund
The Social Security disability fund lifespan is extending, as more people wait longer for their claims to be approved.
According to Mary Dale Walters, senior vice president at Allsup, a company that assists Social Security disability applicants during the claims process, the disability fund is extending and becoming healthier due to the recent hearing backlog. Fewer claims are being processed at the moment, which means the claims are having less impact on the Social Security disability fund, Walters said.
In its July annual report, the Social Security Board of Trustees predicted that the Social Security disability fund will be depleted by 2028. During this time, Social Security said that there should be enough funds to cover about 93% of disability benefits payable.
Last year, the Board estimated that the disability fund will run out by 2023. The lifetime was extended five years this 2017.
Disability claims have significantly lessened, and this is lengthening the lifespan of the disability fund. This is also taken as a sign that the economy is growing. However, despite the decrease in the number of claims filed, the backlog continues to grow. Today, the buildup has grown to about 1.1 million claimants. Moreover, wait times for claims approval is becoming longer.
Claimants who get denied at initial application stage are typically scheduled for a hearing to appeal for their eligibility. Waiting time to get a hearing has now increased to an average of 583 days compared to about 360 days in the year 2011. According to data from Allsup, waiting time will continue to rise in September to reach 605 days on average.
Even at hearing level, movement is slow. From 2012 to 2016, the number of cases that have been decided at hearing stage has fallen 29%.
President Trump has made a move to allot $90 million from Social Security funding to ease the hearing backlog. But according to Walters, the Trump administration lacks enough muscle to manage the growing numbers, especially since the Baby Boomer generation is aging and more claims are expected to come in.
The Baby Boomers are born between the years 1946 and 1964, and more of them are retiring. Moreover, the number of working-age individuals is getting smaller. This means that there are more people receiving money from the fund while fewer are putting money into it.
The Social Security Administration (SSA) said it regards the matter with utmost importance, and that it is doing its best to reduce the wait times. The SSA also added that it is working on introducing new technology, improved processes and more staff to tackle the problem.
The SSA has also requested to implement stricter requirements for the disability fund, particularly employment requirements. According to the administration, this will minimize the expenses and significantly reduce the mandatory spending currently affecting the processes.
The SSA sees the proposed course of action necessary to help extend the lifespan of the Social Security disability fund. However, the recommendation is met by criticisms. According to critics, the proposal would only make it more difficult for people to apply for and win their much-needed benefits.