A significant number of Americans are concerned about the long-term viability of Social Security – and for good reason.
Pre-pandemic economics indicated that Social Security could become insolvent by the mid-2030s, but the array of economic issues that the last six months have provided are moving that date up more and more each month.
With the latest proposal to institute a payroll tax holiday, followed by a potential permanent cut, the Chief Actuary of the Social Security Administration (SSA) warns that if another funding source isn’t identified, Social Security could face insolvency by mid-2023.
How Social Security is Funded
CNBC reports that in a letter to a group of US senators, Chief Actuary Stephen Goss outlined that since the payroll tax funds more than 90% of the primary Old-Age and Survivors Insurance (OASI) Trust Fund, a halt in that income would require significant changing in the funding model to keep it afloat.
In traditional cases, employers and employees share the contribution burden with self-employed Americans contributing up to 12.4% of their income to Social Security. That all comes through the form of the payroll tax and even the small tax holiday would open up a significant gap in funding.
What This Could Mean for the Average Beneficiary
Simply put, it’s likely going to mean more rejections, more denials and a harder time successfully appealing for those initially turned down for SSI and SSDI benefits. As budgets and funding becomes tighter, the SSA will take a closer look at every application – not to mention that the actual numbers of applications will rise as more people shift to early retirement or search in need of extra financial help in any extended economic downturn.
The payroll tax issue creates more questions than it answers.
This is why it’s important to have the advocacy help of a qualified Social Security claims law firm on your side. At Bevill & Bevill, LLC, our team stays on top of the latest developments to help guide our clients throughout Walker County. Call us today at (205) 221-4646 to learn more and schedule a free consultation.