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Social Security disability's future uncertain despite low COLAs

Disability resulting from unexpected injury or illness often takes New Jersey residents by surprise. Most people never plan on becoming disabled and, as a result, few people have a plan regarding what they will do if they become disabled and can no longer work. For this reason, Social Security disability functions as an important social safety net, but the program is not without its challenges.

Every year, Social Security benefits are adjusted to account for increases in the cost of living. Increases over the past few years, however, have been significantly less than the average increases over previous decades. 2015 will mark the sixth year that increases have been record lows. This year, the increase was only 1.5% and the increase for 2015 will be only slightly higher at 1.7%. The official announcement from the Social Security Administration about the cost-of-living adjustment will come out in late October. Although the benefits increases are intended to track inflation, they are not keeping up. The Senior Citizens League noted that the buying power of Social Security beneficiaries has decreased by nearly one-third since 2000. Despite these limited increases, however, the Social Security Trustees has warned that the Disability Fund may become insolvent by 2016 if changes are not implemented.

Although the majority of people likely think of retirement benefits when they think of Social Security, the reality is that retirement benefits and disability benefits all come from the same program. Because workers pay into the system during their working years, they are eligible to receive benefits if they suffer a work-related injury or an illness that prevents them from continuing to work.

In order to receive SSD benefits for injury, the injury must result in a disability that lasts for a year or longer. Because the process takes a long time, however, workers who expect to be disabled for a significant period of time should consult with an attorney about beginning the application process in order to have the best chance of receiving benefits as soon as possible. Although there are strict guidelines and requirements relating to eligibility and the application process, emphasizing the human story and putting a face on the words on the page can make a big difference in filing a successful claim.

Source: Investment News, "Social Security cost-of-living adjustments projected to increase slightly in 2015," Mary Beth Franklin, Oct. 1, 2014

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