For many people, Social Security Disability (SSDI) is the difference between being able to make ends meet and being on the street with nothing to your name. When you are hurt or disabled and unable to work, it can be a scary thing to imagine a future with no certain income. Because of this, SSDI and other programs like it are a lifeline to those who have no ability to bring a steady income by themselves.
You’ve probably heard many politicians, pundits, and news anchors talk about the problems with Social Security and funding over the years. While this problem hasn’t gone away, it doesn’t mean that Social Security or SSDI are going away anytime soon. That’s because there’s still a good amount of money coming in to help keep the system afloat, and new and creative ways are always being developed to help.
So, where does the money come from? In the case of SSDI, the money comes specifically from you, the taxpayer, in the form of a tax on your income. If you’re not sure where it comes from, just look at your next pay stub. You’re already aware that different amounts of money are taken out for different purposes, and one of these purposes is something called FICA. FICA stands for the Federal Insurance Contributions Act, and it is a mandatory contribution that you make to the federal government to help fund various programs, such as Social Security or Medicare.
A certain percentage of this money is used to help fund SSDI benefits. In 2017, 0.9% of the first $113,700 you make per year goes towards funding SSDI. In addition, your employee makes an equal contribution on your behalf into that fund. So, your work contribution is effectively doubled. Through this system, the federal government is effectively signing you and making you pay for an insurance program that you are able to access should you be disabled or injured at some point and unable to work.
Social Security does have another disability program called Supplemental Security Income (SSI), but because this disability program is intended for a different type of recipient, the money for this comes from other taxed sources.
If you have questions about this or would like to talk to someone about your specific disability issues, please contact us today.