Uncertain futures bring the possibility of insolvency

On Behalf of | May 22, 2020 | Social Security Disability, Social Security Disability Benefits For Injuries

The Social Security Administration experiencing a significant backlog of cases would never be considered breaking news. Prior to shuttering the offices that take care of disability insurance claims due to the coronavirus crisis, the average initial review would take half of a year. Appeals come in at 500 days, if not more, on average.

The reliance on systems allowing employees to work at home is currently allowing operations to keep pace at pre-pandemic levels. However, the longer COVID-19 remains a means to slow a government entity already known for levels of bureaucracy, claims processing may take even longer, potentially overwhelming the system.

Claims increase while payments potentially decrease

Add to those concerns the irony of a virus causing a level of chaos in SSDI operations resulting in actual  COVID-related disability claims of severe damage to various organs, including lungs and kidneys. The “new normal” brings new estimates hinting at possible financial insolvency, depending on how long the pandemic lasts and the impact it will have on the economy.

Previous predictions saw 2035 as the last year that full payment of Social Security benefits may no longer be a valid or sustainable option. Instead, recipients could see a near 25 percent decline in the financial compensation they receive. Prognostications did not account for a nationwide contagion, subsequent shutdown, and unprecedented unemployment that rival and may significantly exceed Great Depression-era numbers.

According to the Bipartisan Policy Institute, recipients may only have nine years remaining in receiving benefits due to a smaller amount of taxes coming in from payrolls and less money paid into retirement funds. Coronavirus may be the first of many catastrophes, be it health-wise or financial.

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