President Trump Proposes Cuts to Social Security DisabilityPosted May 26, 2017 by Premier Disability Services, LLC®
President Donald Trump released his budget proposal for fiscal year 2018, which begins in October 2017, this past Tuesday. The budget proposal calls for the following changes:
Reform Disability Programs. Currently, people with disabilities have low rates of labor force participation (LFP). There is a common expectation that receipt of disability insurance benefits results in a permanent exit from the labor force. The Budget challenges this assumption by evaluating alternative program designs that will help individuals with disabilities remain attached to the labor force and individuals with temporary work disabilities return to work.
As part of this reform effort, the Administration would call on the Congress to establish an expert panel that would identify specific changes to program rules that increase LFP and reduce participation on disability programs based on the results of successful demonstrations and other evidence. This panel would be responsible for making recommendations to reduce participation levels that would be directly tied to reaching a 5 percent reduction in Disability Insurance (DI) and Supplemental Security Income (SSI) projected outlays by 2027.
To maximize the potential of success, the Administration would simultaneously test a variety of strategies. The Administration is calling on the Congress to mandate participation by applicants and program beneficiaries in these projects including:
1) Test “time limited benefits” for beneficiaries for a period when they would be more likely to return to work;
2) Require applicants to engage in job-seeking activities before their application is considered;
3) Push existing State vocational rehabilitation offices to intervene earlier with individuals on a track to end up on DI;
4) Replicate welfare-to-work strategies in State TANF offices to provide wellness care and vocational services to welfare applicants that cannot work due to a short-term or uncontrolled health condition; and
Reduce 12 month retroactive DI benefits to six months. New DI beneficiaries are currently eligible for up to 12 months of benefits before the date of their application, depending upon the date they became disabled. This proposal would reduce retroactivity for disabled workers, which is the same policy already in effect for Medicare eligibility.
Create sliding scale for multi-recipient SSI families. Currently, families receive an equal amount for each SSI child recipient. However, economies of scale in some types of consumption — housing, in particular — reduces per capita living expenses and therefore means that two children generally do not need twice the income as one child. Federal poverty guidelines and other means-tested benefits take into account these efficiencies. The Budget proposes to create a sliding scale for SSI disability benefits that considers the number of additional family recipients. It would keep the maximum benefit for one recipient the same as in current law but reduce benefits for additional recipients in the same family.
Offset overlapping unemployment and disability payments. The Budget proposes to close a loophole that allows individuals to receive Unemployment Insurance (UI) and DI for the same period of joblessness. The proposal would offset the DI benefit to account for concurrent receipt of UI benefits. Under current law, concurrent receipt of DI benefits and unemployment compensation is allowable. UI is intended to compensate individuals for short-term bouts of unemployment while they look to return to work while DI is intended to compensate individuals who cannot return to work on a long-term basis due to a disability, allowing double dipping that is unnecessary and wasteful.
Reinstate the reconsideration review application stage in 10 States. The Budget proposes reinstating reconsideration in 10 States, conforming these States with the practices used in the rest of the Nation. This reform requires a second review by the State Disability Determination Services (DDS) before an appeal goes to an Administrative Law Judge (ALJ). Other States already require disability applicants to have their claim “reconsidered” before they can appeal to an ALJ.
Eliminate Workers’ Compensation (WC) Reverse Offset. The Budget proposes to eliminate reverse offsets in 15 States where WC benefits are offset instead of DI benefits. Currently, in most States, the combination of benefits from WC and DI is limited to 80 percent of the recipient’s earnings before they were disabled. If necessary, DI benefits are usually offset to meet the limit. However, 15 States currently reduce the benefit from WC rather than DI in order to achieve the 80 percent limit, creating an unjustified inequity across States. This option would eliminate the reverse offsets in these States.
Create a probationary period for Administrative Law Judges. The Budget proposes to create a probationary period for ALJs. This option would create a one-year probationary period, similar to the Senior Executive Service, to ensure an ALJ is performing at a satisfactory level. Following the one-year probation, the ALJ would convert to a lifetime appointment.
By: Joyce Trudeau of Premier Disability Services, LLC®