Kilolo Kijakazi, the acting commissioner of the Social Security Administration (SSA), recently stated, “[T]here are few, if any, federal agencies that positively impact the lives of the American people to the extent that the [SSA] does ... SSA’s programs touch the lives of almost every person in the nation.”1
Social Security offers more than retirement benefits. The Old Age, Survivors, and Disability Insurance (OASDI) program provides monthly benefits to nearly 66 million retired workers, disabled workers and their families, and survivors of deceased workers.2 Another program, the Supplemental Security Income (SSI) benefits program, provides a safety net for the most vulnerable people in our country such as disabled adults and elderly beneficiaries who do not qualify for retirement benefits.
Social Security is financed through a dedicated payroll tax. In 2023, employers and employees each pay 6.2% of wages up to the maximum of $160,200, while the self-employed pay 12.4%.3 An estimated 87% of the population aged 65 and over received benefits in 2022. Approximately 183 million people in the U.S. will work in OASDI-covered employment in 2023, and 90% of persons aged 21-to-64 who worked in OASDI-covered employment in 2022 can count on monthly cash benefits if they suffer a severe disability that lasts at least 12 months or is expected to result in death.4
Every American will inevitably deal with Social Security at a point in time either for themselves or their loved ones. Most attorneys who practice in this area of law primarily help claimants5 obtain and keep disability benefits. The SSA estimates that about 1 in 4 of today’s 20-year-olds will become disabled before reaching age 67.6 Social Security is a consideration in financial planning, special-needs planning for a loved one such as a disabled adult child, or in the case of a worker’s divorce or death. Simply put, Social Security can help people in all stages of life.
Many hot-button issues are being debated in the world of Social Security disability law, and staying abreast of these issues is a challenge for practitioners in the field. This article highlights some of the key issues from potential legislative changes on the horizon to practical considerations.
SOCIAL SECURITY BENEFIT INCREASES FOR 2023
According to the SSA, approximately 70 million Americans saw an 8.7% increase in their Social Security and SSI payments this year due to a cost-of-living adjustment (COLA) as measured by the U.S. Department of Labor Consumer Price Index.7 Starting in January of this year, the average payment increased by more than $140 per month. When the cost of living increases due to inflation and the higher cost of services, the COLA is adjusted “to ensure that the purchasing power of Social Security and Supplemental Security Income benefits is not eroded by inflation.”8
Another positive note for 2023 is that Medicare premiums on average decreased as benefits increased.9 Beneficiaries in 2023 have some “breathing room,” according to Kijakazi.10
WHAT’S COOKING IN CONGRESS
Since the mailing of monthly checks began in 1940, the Social Security Administration has never failed to make benefit payments. The House of Representatives Social Security Subcommittee held a hearing in April which discussed solutions for funding Social Security in the future. According to the most recent projections from the SSA Board of Trustees, the program’s trust funds are expected to be depleted by 2034.11 At that point, other sources of income would only be able to cover around 80% of future benefits. Some of the solutions for dealing with the projected shortfall include increasing taxes for wealthy Americans, raising the payroll tax, reducing benefits for high earners, and increasing the full retirement age.12 Social Security and Medicare eligibility changes and spending caps were contemplated by House Republicans, who wanted to use the debt-limit deadline to obtain concessions from Democrats. With the House under Republican control, it will be interesting to see what unfolds.
Sen. Rick Scott (R-FL) released a proposal that would allow all fed-eral programs — including Social Security and Medicare — to expire if not reauthorized every five years.13 Though Senate Minority Leader Mitch McConnell (R-KY) has said unequivocally that this proposal “will not be part of a Republican Senate majority agenda,” House and Senate GOP leaders have suggested they might refuse to raise the federal debt limit next year until President Joe Biden agrees to other, more modest changes in both programs.14 In the past, Republicans have suggested making strategic benefit cuts such as raising the retirement age or privatizing Social Security. In January, House Speaker Kevin McCarthy (R-CA) said in an interview that he wanted to take cuts to Medicare and Social Security off the table in talks with Democrats over the debt ceiling even though Republicans still wanted commitments on spending cuts generally. The White House was skeptical of McCarthy’s claims, saying Republicans have wanted to cut earned benefits for years.15
The leading Democratic proposal in Congress for Social Secu-rity reform is the Social Security 2100: A Sacred Trust Act, which would be the program’s first expansion in 50 years. It would increase the average benefit checks by about 2%, which would be offset through a payroll tax on wages above $400,000. The bill, long championed by Rep. John Larson (D-CT) and introduced with nearly 200 co-sponsors, was set for a markup by the Ways and Means Committee but ultimately, no vote was held.16
Another Social Security bill sponsored by Rep. Rodney Davis (R-IL) earned enough bipartisan support to bypass markup and be fast tracked for a vote.17 Davis’s bill, the Social Security Fairness Act, would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which prevent public servants in states with special pension plans from getting Social Security benefits.18 The House Ways and Means Committee approved the Social Security Fairness Act in September 202219 and while the proposed legislation has 31 bipartisan cosponsors in the Senate, it has had difficulty passing due to its price tag.20 The bill was reintroduced to the Senate on March 1 by Sen. Sherrod Brown (D-OH) and Sen. Susan Collins (R-ME).21
POLICY CONSIDERATIONS IN ADDRESSING FUNDING SHORTFALLS
Funding shortfalls for the Social Security program in the long run remains a serious concern for those in the workforce, especially younger workers. Proposals ranging from cutting benefits to gradually increasing the full retirement age to 70 years of age have been floated,22 but have been criticized as discriminatory and unrealistic. College-educated workers can probably stay employed until age 70, according to Alicia Munnell, director of the Center for Retirement Research at Boston College, but “[l]ower-education groups and racial minorities just do not have that many healthy years of life expectancy that they could do it.”23 Teresa Ghilarducci, a labor economist and professor at The New School, also notes that living longer and being able to work longer are not the same things.24
In addition to the uncertainty over how Congress will address funding shortfalls in the future, Americans in general are financially unprepared in the event of a disability. According to former U.S. Secretary of Labor Marty Walsh, many Americans do not have retirement savings, and many of those workers are approaching the ends of their working careers.25 The convergence of future changes to Social Security and personal savings shortfalls could have devastating consequences for individuals who find themselves financially strapped and dependent on Social Security for most of their retirement income or in the event of disability.
REOPENING SSA OFFICES AFTER COVID: CUSTOMER SERVICE AND PROCESSING ISSUES
Another issue the Social Security Administration faces is reopening SSA offices and serving the public in the aftermath of the COVID-19 pandemic. More than three years after COVID-19 caused the SSA to close its 1,200-plus local offices across the country, most Michigan field offices quietly reopened on April 7, 2022.26 However, in a recent press release, Kijakazi strongly encouraged the public to use online services or schedule appointments in advance rather than walking into an office without an appointment.27 Field offices have nonetheless been inundated with claims.
Even before COVID-19, the SSA faced a funding and service shortfall. Over the last decade, the SSA’s operating budget fell 13% while beneficiaries served increased by 21%. Congressional budget cuts have resulted in reduced staffing and poor customer service.28
Along with the pent-up demand created by the long shutdown, the SSA has dealt with service delays on its toll-free phone number, a backlog of in-person appointments, and lengthier processing times for disability decisions. Recognizing the enormous challenges facing the SSA, President Biden’s budget requested a $1.4 billion increase for the agency for fiscal year 2023.29
Kijakazi, the SSA acting commissioner, said, “We are analyzing factors that are contributing to the backlog. It is a combination of complex issues including challenges to hiring in the tight labor market, historically high attrition in the state offices, increasing medical evidence that must be reviewed, and shortages of physicians to conduct outside medical exams and review cases.”30
The magnitude of these challenges is daunting when one considers the SSA’s expansive reach. The agency is headquartered in Baltimore, Maryland, and has more than 1,300 offices nationwide — in addition to its field offices, the SSA also operates hearing offices and state disability determination services. The field offices serve as the SSA’s first and primary contact point with the public, handling administrative tasks including initial intake and processing disability applications.31
Underfunding and staffing challenges at field offices have resulted in processing delays and a backlog of nearly one million disability applications. The average wait time for an initial decision is now seven months, more than double what it was in 2019.32
Combined, these issues present serious challenges to disabled claimants in precarious financial situations. Attorneys who practice in this area frequently field calls from claimants asking about the status of their applications; in turn, attorneys can only offer limited assistance when a claimant’s file is queued for processing. The question then becomes what claimants and their representatives can do to keep their cases from being unnecessarily delayed.
RECOGNIZING AND ADDRESSSING ISSUES TO AVOID UNNECESSARY DELAYS IN CLAIMS PROCESSING
Coverage issues
Recognizing and addressing potential OASDI coverage issues before a case begins or when a client first files an application for benefits is helpful. For instance, one potential issue that can arise is whether a worker has attained the minimum number of credits required to be insured and eligible (i.e., whether a worker has obtained insured status) for disability insurance benefits under Title II of the Social Security Act. Insured status must be established for family members of workers and survivors of workers, and the requirements are different depending on the type of benefit an individual seeks.33 The SSA compiles earnings records for every worker; if the process is to function efficiently, it is important that a worker’s earnings summary accurately reflects their actual work history.
Coverage issue examples
Identity theft can complicate a person’s application for benefits. Disability that has or is expected to last 12 or more months is required for disability insurance benefits,34 and earnings reported under a Social Security number will appear in SSA records as the claimant’s earnings. Thus, a claimant who is a victim of identity theft could be denied benefits based on records that show they were working during a period of disability.
Furthermore, under the SSI program — which is intended to cover disabled individuals who are of limited income and resources — a victim of identity theft could find themselves disqualified by unknown earnings under their name and Social Security number that put them over the income limits. Practitioners should encourage clients to setup a My Social Security account through the SSA website35 prior to or at the outset of a claim to help avoid these problems. Using the website, claimants can review Social Security statements online, including current earnings history. Claimants can also access information on how to report errors,36 allowing for any issues to be resolved and avoiding unnecessary delay in adjudicating claims.
Digital tools
In a post-COVID 19 world, video or telephone hearings have become the norm, with in-person appointments at once-bustling hearing offices now conducted only by appointment. For the public, services that were once commonly done in person at field offices — such as initial applications for benefits — can now be done online. Attorneys should encourage clients familiar with technology to use available self-service digital tools.
In December 2022, the SSA updated its homepage with a new design meant to be more user friendly to help visitors apply for benefits, appeal decisions, or check the status of their applications.37 The objective is reducing the number of telephone calls and in-person office visits, thereby allowing field office staff to focus on serving individuals needing in-person assistance. Whether the changes achieve their intended purpose remains to be seen. One practitioner says his clients have been frustrated by the new procedure for signing up for a My Social Security account; the online instructions state that the SSA will send an authorization code to the registrant’s home within two weeks, which the registrant needs to finish setting up their account, but the code does not work when it arrives.
In-person services will always be necessary for certain claimants, such as those with cognitive disabilities, language barriers, and people who lack access to or ability to use technology. Despite the SSA’s emphasis on using online tools, in-person assistance at local offices is still the quickest way to add or fix information into the system.
CONCLUSION
Practitioners in this area of law can expect to face numerous and unique challenges in the coming decade. In addition to comprehensive legislative reform on the horizon, practitioners in the field will grapple with long wait times for claims processing and decision delays exacerbated by SSA staffing and funding constraints at the local level. Also, the Social Security benefit structure is complex and outdated rules and definitions used to determine disabilities fail to account for the realities of the modern labor market to the detriment of claimants.
Despite these challenges, or perhaps because of them, there is tremendous satisfaction in helping claimants successfully navigate the Social Security process. It is not uncommon for claimants and families to be in dire financial straits due to their medical conditions. The State Bar of Michigan Social Security Law Section is dedicated to helping practitioners improve their representation of claimants and stay abreast of changes in the field.