SS 240: Personal Accounts and Disability Insurance
It is important to
realize that the government has two major programs which provide
assistance to disabled individuals: Supplemental Security Income
(SSI) and Social Security Disability Insurance (DI).
SSI provides assistance
to aged, blind and disabled people, but it is paid for out of general
tax revenue NOT Social Security taxes. Any changes to Social
Security tax laws will not impact the revenue of SSI, and
these disability benefits will continue to be provided no matter
DI provides assistance
only to those disabled workers who have worked for a certain period
of time and have paid Social Security taxes. Of the 12.4% in payroll
taxes that are collected for Social Security only 1.8% of funds are
used to fund DI. Since such a small percentage of taxes are
dedicated to DI, it is possible to reform just the retirement portion
of the Social Security system and leave disability insurance alone.
That means that creating personal accounts does not have to mean the
end of disability insurance.