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Growth of SSDI program may stabilize in future

On Behalf of | Dec 21, 2012 | Social Security Disability

Growth of entitlement programs, like Social Security and Medicare, cause great concern when projecting the future status of these programs. Heath care expenses seem to continue to grow exponentially, as do the number of beneficiaries the programs will need to cover. Sustaining these programs becomes more and more troubling, with no easy solutions available.

The Social Security disability insurance (SSDI) program is often cast in the same light as these other programs, and questions have been raised as to its sustainability, especially in with news that the trust fund that supports SSDI will be exhausted in a few years.

There have been significant increases in the number of SSDI beneficiaries in recent years, but some of the drivers of that growth are now past. For instance, a large increase in the number of women in the workforce has leveled off.

In 1970, the percentage of women who worked was under 40 percent. Since eligibility for SSDI is based on the individual having work prior to becoming disabled, only those who worked were “insured” and able to receive benefits from SSDI.

By 2010, the number of women working was approaching 70 percent. This doubling of the number of women in the workforce greatly increased the number of potential beneficiaries.

But this growth is now within the system and SSAs projections for the next 70 years show that the number of men and women “insured” by the program will remain relatively stable, with only slow growth.

This should allow the sustainability of the program without severe benefit cuts or large increases to the payroll tax.

Source: House Committee on Ways and Means, Subcommittee on Social Security, “Securing the Future of the Social Security Disability Insurance Program,” Testimony by Steve Goss, Chief Actuary, Social Security Administration, December 2, 2012