Shortfall could mean new hardship for those on disability

The federal government’s two largest benefit programs face short- and long-term financial problems. The magnitude of those problems became clearer when the trustees for Social Security and Medicare issued their annual report cards. (AP Photo/Jon Elswick, File)

Goose Creek resident Kelly Schuler said he was earning a six-figure income in corporate sales when he was diagnosed with Parkinson’s disease, and after his symptoms became apparent and he lost his job, Social Security Disability Insurance payments became his financial lifeline.

Now he finds himself among the 11 million Americans who could see their monthly checks slashed by 19 percent next year, unless federal lawmakers address a looming shortfall in the Social Security fund that pays disability benefits.

The main Social Security fund that pays retiree and survivor benefits is not expected to run short for another two decades, the government said Wednesday, but the financial challenge facing the two Social Security funds is similar.

Once reserves in those funds are exhausted — late next year for the disability fund — mandatory benefit cuts kick in so that the benefits being paid don’t exceed the funding coming in from payroll taxes.

Social Security Disability checks go to people who have worked enough to collect Social Security, but are not yet old enough for retiree benefits, and are disabled.

A different federal program called Supplemental Security Income, funded by general revenues, pays lower benefits to those who are disabled, very poor, and don’t qualify for the Social Security Disability Insurance.

The average monthly Social Security disability check is just over $1,000, depending on the recipient’s earnings history, and the program rules limit how much income people with disabilities can earn if they are able to work.

That means the average recipient could see a nearly $200 reduction in their monthly income, but they may not be able to make up for it by working more — if they’re able to work at all.

“The most anyone can usually make is an extra $500 to $1,000 or they will cut you off,” said Julia Barrett-Martinelli, executive director of AccessAbility in Dorchester County, a federally funded nonprofit group serving the disabled in the greater Charleston area and Orangeburg and Williamsburg counties.

“From the people I see, and we see lots of them, most fall in the severe disability range,” she said. “We’re talking about people who are missing limbs and are living alone.”

There is an easy fix available for the disability program shortfall: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.

President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue “would have no adverse effect on the solvency of the overall Social Security program.”

But Republicans say they want changes in the disability program to reduce the amount of fraud and to encourage disabled workers to re-enter the work force.

“Washington has continually kicked the can down the road, and now, as 11 million Americans face cuts to Social Security disability benefits they rely on, it is time for Congress to take action,” said Sen. Rob Portman, R-Ohio.

In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.

Barrett-Martinelli said it’s difficult and time-consuming to apply for Social Security Disability, and most people would not choose to be disabled and live on $1,000 a month.

“It’s easy to stand back and say people are gaming the system, but it’s a system that they paid for, and it’s very hard to qualify for,” she said.

Schuler has an incurable nervous system disorder that will get progressively worse, but when it comes to his Social Security Disability Insurance, he said he’s one of the lucky ones.

Due to his high earnings when he was working, Schuler receives about $2,500 a month, and is able to earn a little more working part time.

“When I first applied, I was kind of embarrassed, but then I realized I’ve paid into that system for 40 years,” he said. “I don’t know what I would do if I didn’t get this disability check.”

Schuler said as difficult as a 19 percent benefit cut would be for him, it would be much tougher on someone receiving far less.

As the deadline gets closer, advocates say the need to act becomes more urgent.

“The president has proposed a commonsense solution to improve the solvency of this fund in the short run so that Americans who rely on it will continue to receive the benefits they need,” Treasury Secretary Jacob Lew said.

If the retirement and disability funds were combined, they would have enough money to pay full benefits until 2034, the Social Security trustees said.

Nearly 60 million people receive Social Security benefits, including 42 million retired workers and dependents, 11 million disabled workers and 6 million survivors of deceased workers.

The Associated Press contributed to this report.