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Social Security disability benefits may be hit first

It is impossible to turn on the news in Wisconsin without hearing about our national budget, Congress and so-called "entitlements." When it comes to the safety nets upon which many of us will depend, it appears that one of them will be hit first if nothing is changed. The Social Security Administration may begin running out of money.

According to industry sources, if Congress does nothing, then Social Security and Medicare will run out of funding in 2033. However, Social Security disability benefits are expected to take the first hit with a 21 percent reduction in benefits beginning in four years. There are a few reasons why disability benefits may run out first.

The main reason is apparently due to the increasing number of people who are applying for benefits. The numbers have increased primarily due to the fact that Social Security disability now includes mental health issues as well as injury disabilities and physical illnesses such as multiple sclerosis and Alzheimer's disease. For example, claims for mental disorders have gone from 10 percent of the disability cases in 1982 to 32.8 percent this year.

Some speculate that Social Security disability is up due to unemployment, and although the reasons for this are unknown, there does seem to be a correlation. The Organization for Economic Cooperation and Development did a study which showed that when unemployment went up by one percent, disability claim applications went up by 10 percent.

As we reported in an earlier blog post, another reason could be aging baby boomers. Disabilities tend to increase with age, and baby boomers are nearing retirement.

Those who are unable to work should be advised that not everyone who applies for benefits has his or her claim accepted. An experienced attorney can help with the initial application, as well as with any Social Security appeals that may be necessary.

Source: New American, "Social Security Disability Recipients to Take 21-percent Cut," Bob Adelmann, June 26, 2012

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