Michigan residents who receive disability benefits, or who are seeking to obtain benefits, may be aware of recent legal changes that have affected Social Security benefits. President Obama recently signed a federal budget bill into law that influences the current discussion about disability benefits. The bill's passage is significant SSA news, given its wide-reaching effects.
The new bill affects Medicare and closes certain Social Security loopholes, but the significant consequence for those who receive disability benefits is that the Social Security disability trust fund is no longer projected to be exhausted next year. Prior to the passage of this bill, the trust fund, on which so many disability beneficiaries rely, was anticipated to be exhausted in late 2016, which would have meant reduced disability payments for beneficiaries in need.
Now, under the new law, the trust fund is anticipated to be solvent until at least 2022. This will undoubtedly provide relief to Michigan residents who may have been concerned about the future of their disability benefits. The money to keep the trust fund solvent will be obtained through the reallocation of some Federal Insurance Contributions Act, or FICA, taxes to the disability trust fund. FICA taxes are taxes that are withheld from employee earnings by employers to fund Social Security and Medicare.
This new law appears to offer some positive news for recipients of disability benefits. If a Michigan resident has questions or concerns about how the new law may affect his or her current benefits, or the process of obtaining benefits, he or she may wish to speak with an attorney to alleviate any concerns.
Source: CBS MoneyWatch, "How Social Security and Medicare just got stronger," Steve Vernon, Nov. 6, 2015