The Treasury Department is responsible for not only the Disability Insurance Trust Funds but also Old-Age and Survivors Insurance. These programs were launched to provide income to workers who can no longer work due to a disability or those who retired from their professions.
For approximately 40 years, dire warnings have come from the Social Security Administration (SSA) regarding paying out full benefits to eligible recipients. Previous years have revealed ominous circumstances regarding the coming depletion of funds for both Social Security and disability benefits.
A glimmer of hope
The Social Security Disability Trust Fund has enough financial resources to last for the next 75 years. Those eligible will have regular checks coming in until close to the end of the 21st century. Last year, predictions targeted 2057 as the year that funds would be depleted.
For disability recipients, Part A funds have enough money to last through 2028, two years later than last year’s projections.
While COVID-19 has been the bearer of bad news, a strong recovery from a virus-driven recession, higher labor productivity, and reduced future disability incidence rates have added a year to the trust fund’s ability to pay out benefits. The year 2034 is now the predicted date when funds will run out.
Much-needed changes to near-economic data combined with assumptions that reflect employment, earnings, and GDP recovery from 2020 accelerated and strengthened beyond expectations. The end result was higher payroll tax receipts and taxation revenue from Social Security benefits.
However, optimism still remains elusive as the financial outlook is concerning. Demographic trends and a U.S. population that is growing older necessitate action or outright intervention by lawmakers that should occur sooner rather than later.