Wednesday, January 19, 2005

Food for thought

From the Boston Globe

WASHINGTON -- Disability benefits may not be safe from the across-the-board cuts that are likely in President Bush's proposal to allow personal investment accounts in the Social Security program.

Retirement and disability benefits are calculated using the same formula, so if future promised retirement benefits are cut, then disability benefits also would be reduced -- unless the program is somehow separated.

This raises big questions about how investment accounts would be structured for the disabled, especially if they are injured at a young age or are dependent on a parent. Disabled beneficiaries typically work less and need benefits sooner, so the accounts would not provide enough income to them.

. . .

Currently, disabled workers move seamlessly through the Social Security system, often unaware they draw their benefits from the disability program until they reach retirement age and shift to the retirement program. That would change with investment accounts, advocates say, with people falling through holes in a new system.

About 16 percent of the 47 million people receiving Social Security benefits are disabled workers and their dependents. The impact of accounts on beneficiaries who aren't retirees has not been publicly discussed by the Bush administration.

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