3 Eye Opening Facts About Disability Benefits and the U.S. National Debt

3 Eye Opening Facts About Disability Benefits and the U.S. National Debt

In 1935, President Franklin D. Roosevelt signed into law the Social Security Act that created a system of federal benefits for old-age workers and their families. The Social Security Act was amended in 1956 to include disability benefits.

Under Social Security federal law, disability is defined as the incapability to participate in any substantial gainful activity due to mental or physical injury or impairment that has been medically determined. The said disability can be predicted to continually last for not less than 12 months or to result in death.

It is also defined as a condition of blindness that produces the aforementioned disability but one that requires abilities comparable to those of any gainful activity in which the individual has previously engaged over a substantial time period and with some regularity.

Generally, disability benefits are received after the individual has been identified as disabled for a full five-month period.

In 2017, about $142.9 billion of benefits have been distributed among disabled workers and their families. This makes about 15% of the total Social Security benefits. Depending on the inflation rate, the disability benefits are generally increased once a year.

Impact on National Debt

This has an impact on National Debt since trust fund assets consists of federal debt and all finances of the Social Security program are handled through trusts fund in the U.S. Treasury. This includes a trust fund for the U.S. Disability program.

Loan Plus Interest

By law, surplus money collected by the Social Security program can be loaned to the federal government. Under federal law, the federal government is required to pay back to Social Security any monetary value that it has borrowed plus interest.

It is this federal government borrowed money from the Social Security that becomes part of the national debt.

Intergovernmental Debt

The money owed by the federal government to trust funds like the Social Security Trust Fund is identified as an intergovernmental debt. As of 31 May 2018, about $5.7 trillion of intergovernmental debt alone comprise the national debt.

For more clarification on disability benefits and the U.S. national debt, don’t hesitate to contact us at the Southwest ADA Disability Legal Center. We’ll be happy to hear from you.


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