What Could A Trump Presidency Mean For Social Security Disability Benefits?

If you're currently receiving disability benefits through the Social Security Disability (SSD) or Supplemental Security Income (SSI) programs, you may be concerned about how (or whether) the political upheaval of the last year may affect your future benefits. While President-elect Trump has announced some sweeping tax changes that could provide some relief to retired individuals receiving Social Security benefits, these tax changes can also mean a fundamental shift in the structure of how the Social Security program is funded. Read on to learn more about some of the potential changes to the SSD and SSI programs under President Trump.

What changes are being made to the Social Security funding sources?

"Social Security" is often used as a catch-all term to include retirement and disability benefits -- however, these benefits are paid from two separate pools of money. The Social Security trust fund is funded through FICA taxes (including Medicare taxes) and is self-sufficient; the tax revenue entering the fund is designed to sustain it without relying on other sources of revenue or the general fund. The Social Security Disability Insurance Trust fund (which pays for both SSD and SSI) is less self-sustainable; in fact, there were many news reports about the future insolvency of this fund that could result in an up to 20 percent cut in benefits as early as 2017. While the immediate funding threat has passed, there continues to be a risk that withdrawals will eventually outpace deposits to bankrupt the fund without intervention.

President-elect Trump's tax plan proposes to make sweeping cuts to the tax rate for a number of Americans, including those who receive Social Security retirement or disability benefits. However, these tax cuts come at a cost; and it's likely that paying for these cuts will involve dipping into the Social Security Trust Fund so that it is no longer self-sustaining. As the Social Security fund has been used to "bail out" the disability trust fund in the past, it's possible that over the long term, these tax cuts will result in the slashing of retirement and disability benefits (particularly as the Baby Boomer generation continues to age).

How could these changes affect your disability benefits?

These changes are unlikely to be implemented quickly, and may yet be blocked by Congress; so it's important not to panic in fear that your benefits will soon be cut. However, it's always a good idea to remain proactive and stay up-to-date on news stories and governmental press releases that could impact your disability benefits; knowing what may lie ahead is key in preparing to weather any financial storm. If you're concerned consider reaching out to a disability attorney at a place like Horn & Kelley, PC Attorneys at Law. 

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