What Happens To Social Security Payments If The Government Shuts Down?
Authored by Tom Ozimek via The Epoch Times (emphasis ours),
The looming government shutdown has some Americans worried about what would happen to their Social Security payments if the end-of-the-month deadline passes with no resolution to the gridlock in Washington and parts of the federal government start to grind to a halt.
It appears increasingly likely that Congress will fail to pass the 12 appropriations bills that fund various federal government agencies by the Sept. 30 deadline.
Failure to pass the bills would mean many government operations are halted and hundreds of thousands of federal employees are furloughed—including those at the Social Security Administration (SSA), which administers the Social Security system.
But while some Social Security operations might be affected by a shutdown, legal experts say Social Security recipients need not worry about one thing—their money.
"As a Metairie disability lawyer, every time a government shutdown is in the news, I get calls asking 'Is Social Security affected by a government shutdown?'" Louisiana-based attorney Loyd J. Burgeois said in a note on his website.
Mr. Burgeois said that staffing would be limited at SSA offices as many employees would be furloughed.
Some operations might be affected by a government shutdown—such as halts to processing of new Social Security claims, as happened during the 2013 shutdown.
"During the Clinton-era shutdown, new Social Security claims were not being processed because the agency furloughed 61,415 employees," Mr. Burgeois said. "As the shutdown wore on, the agency adjusted its plan and recalled workers to start processing new claims."
However, while some SSA operations would be impacted, Mr. Burgeois said Social Security checks will continue to be sent out.
"Social Security benefits are considered mandatory spending and are paid from the program’s trust fund, and therefore, the agency has the funds to continue paying benefits," he said.
A law passed by Congress in 1996 provides special protections for Social Security benefits and such benefits are considered mandatory spending—and aren't affected by a government shutdown.
During the last two shutdowns, the SSA continued mailing checks throughout the shutdown.
"When the government shut down in 1995 and again in 2013, all social security payments continued to be sent out in time. This included social security disability," the team at Gray, Sowle, Iacco, Richards, a Michigan-based law office, wrote in a blog post.
They expect that, "just like the previous government shutdowns that social security disability payments will continue."
The team at Gray, Sowle, Iacco, Richards said that they also expect that hearing officers would most likely continue to hold Social Security disability and SSI hearings in the event of a shutdown.
While new hearings were not scheduled during the 2013 shutdown, the Office of Disability Adjudication and Review (ODAR) still held previously scheduled hearings, but staffing was limited.
Another federal agency that many Americans may be less enthused about continuing its operations in the event of a government shutdown is the IRS, which will likely keep running.
Americans Worry Social Security Will Run Dry
With the issue of Social Security benefits on the minds of retirees ahead of the looming government shutdown, a recent survey showed that the vast majority of Americans aged 50 and over are worried that Social Security will completely run out of money within their lifetime.
Ten years ago, 66 percent of U.S. adults above the age of 50 worried that Social Security would run dry within their lifetime, according to the Nationwide Retirement Institute, which has been polling Americans annually about their perceptions of and concerns about the Social Security system.
Today, that figure is significantly higher, with a whopping 75 percent saying they're concerned that Social Security will run out of funds within their lifetime, according to the latest 2023 edition of the survey (pdf).
The increased worry about the state of the Social Security fund is eclipsed by the growth in the share of adults aged 50 and above who say they have no source of retirement income aside from Social Security.
Just over one in five (21 percent) said all they have to count on for retirement is Social Security, up sharply from 13 percent in 2014.
Ten years ago, 48 percent of Americans had a pension in addition to Social Security. In 2023, that number has dwindled to just 31 percent.
Social Security Fund In Danger
Social Security is facing future challenges due to various factors such as inflation and lower-than-expected tax revenue.
A recent projection by the nonpartisan Committee for a Responsible Federal Budget (CRFB) estimates that the Social Security trust fund, which consists of two smaller funds—the Old-Age and Survivors Insurance (OASI) trust fund and the Disability Insurance (DI) trust fund will be insolvent in 2033.
“Upon insolvency, the law mandates that the OASI trust fund can only spend in amounts equal to incoming trust fund revenue, which means that all 70 million retirees, dependents, and survivors—regardless of age, income, or need—will see their benefits cut by 23 percent,” the analysis states.
This means that, in 2033, annual benefits for the average newly retired dual-income couple would be cut by over $17,000.
“For a typical dual-income couple retiring in 2033, we estimate this would represent an immediate $17,400 cut in current dollar annual benefits and an immediate $13,100 cut for a typical single-income couple,” the analysis states.
The CRFB analysis also says that any 2024 presidential candidate who promises not to touch Social Security is "implicitly endorsing a 23 percent across-the-board benefit cut" for some 70 million retirees when the fund runs out of money within 10 years.
