SSDI Solutions Initiative Releases SSDI Primer

In advance of the August 4th SSDI Solutions Conference, the McCrery-Pomeroy SSDI Solutions Initiative has released a short primer to kick off its new issue brief series. The series will provide basic explanations on how the Social Security Disability Insurance (SSDI) program functions with issue briefs based on the program basics, the determination process, program financing, program demographics, and demonstration projects that have been piloted in the past.

To RSVP to the August 4, 2015 SSDI Solutions Conference, click here.

Below is a sample of the material covered in the first brief.

What is Social Security Disability Insurance?

Social Security Disability Insurance, or SSDI, is a component of the Social Security program. It provides cash benefits to insured workers below the retirement age who have a significant disability or illness that is expected to preclude substantial work in the labor market for at least a year or to result in death.

How Does Someone Qualify to Receive SSDI?

To be eligible for SSDI, applicants must have a minimum number of years worked, both overall and in the recent years before the onset of disability. For example, a 62-year-old applicant must have worked 10 years in total, including 5 of the previous 10; work requirements are lower for younger applicants. To be awarded benefits, a worker must establish through medical evidence that he or she has a disability expected to last longer than a year (or result in death) and is, as a result, unable to engage in “substantial gainful activity,” generally defined as earning $1,090 per month, or about $13,000 per year.

How is SSDI funded?

SSDI benefits are financed mainly through a 1.8 percent payroll tax – split evenly between employers and employees – on wages up to $118,500. A small amount of additional funds comes from the partial income taxation of SSDI benefits from those with significant outside income and any interest payments earned on trust fund assets. These three sources are projected to generate about $115 billion of income this year.

To read the rest of the SSDI short primer, click here.

The McCrery-Pomeroy SSDI Solutions Initiative is a project dedicated to identifying practical policy changes to improve the Social Security Disability Insurance (SSDI) program and other services for people with disabilities. With the SSDI trust fund less than two years from depleting its reserves, these solutions can help spur a debate on how to ensure the SSDI program best serves workers with disabilities, those who pay into the program, and the economy more broadly.

The project was launched this past September by former Congressmen Jim McCrery (R-LA) and Earl Pomeroy (D-ND) in coordination with the Committee for a Responsible Federal Budget. The congressmen will be co-chairing the SSDI Solutions Conference on August 4, 2015, featuring 12 commissioned papers with presentations from their authors. The hope is that these papers will catalyze a serious discussion about how to address the program’s funding shortfall well before the Disability Insurance trust fund will deplete its reserves in late 2016 (one of our 2015-2016 Fiscal Speed Bumps).

Click here to learn more about the SSDI Solutions Initiative and here to read the first weekly issue brief on the basics of the SSDI program. Click here to read our paper on this year's looming fiscal speed bumps.