Social Security Disability Benefits Trust Fund Might Run Dry By 2017

August 22 00:00 2011

New York, August 22 ( – The number of disability benefit claims is rising by the day in U.S. and at present about 13.6 million people receive federal disability benefit claims. The trust funds that support these payments are funded through Social Security payroll taxes which also contribute to the retirement fund. In 2010 whereas the collection of payroll taxes was $93 billion, the total benefits paid were $124 billion.

At the end of 2010, the assets of the Social Security disability trust fund were $180 billion and it is expected that these funds will be exhausted by 2017 due to the current unemployment scenario. In another twenty years, the larger retirement fund will also meet the same fate and retirees will face a bleak future unless Congress acts decisively.

The increase in Social Security’s disability benefit claims is primarily because of the rise in number of laid-off workers and aging baby boomers. Over the past ten years, there has been an increase of nearly 50 percent in the number of disability benefit applications. It is estimated that nearly 7 million jobs have been lost due to the downturn of the U.S. economy.

The impact on the trust fund and the retirement fund has increased due to people taking advantage of double dipping the system, which is not illegal. They collect unemployment insurance benefits as well as Social Security benefits, and/or state and federal pensions.  The financial position of the disability benefit funds has deteriorated steadily as a result of the above factors.