SSDI budget cuts in Trump’s proposed budget

Wisconsin Workers’ Compensation Experts has a good blog post about the proposed cuts in Social Security Disability Income (“SSDI”) benefits in the proposed Trump budget.

The claimed cuts are allegedly about fraudulent SSDI claims by people who can supposedly work. Actual SSDI fraud is minuscule, however.

Furthermore, SSDI benefits represent crucial wages for disabled individuals based on their prior earnings. As the blog post explains:

Through their contributions to Social Security, workers earn a measure of protection against disability retirement and death. (Disability insurance protects a worker against loss of earnings due to a significant work limiting impairment, and workers earn this protection by having worked and contributed to Social Security.) Many of my work-injured employees ultimately end up on Social Security Disability and this protection is particularly important to older Americans. Most people receiving Social Security Disability benefits are in their 50s or early 60s and most had only unskilled or semi-skilled jobs. Without a college degree, benefits are not significant (averaging about $1,200 per month). However, over half of Social Security beneficiaries rely on these benefits for 75% or more of their total income.

There is also already an existing and widespread program in place to encourage and facilitate SSDI benefit recipients returning to regular work. Ticket to work is a free and voluntary program by the Social Security Administration to assist SSDI benefit recipients with returning to the workforce. The employment support efforts available for SSDI benefit recipients are extensive. Presentations and training about the program are also available. The budget proposal from the current President appears to be little more than a massive cut to benefits and training and support without any acknowledgment of the difficulties disabled folk have in the workplace. Because of Ticket to Work efforts, many SSDI benefits recipients are already working limited jobs. They just cannot find the kind of full-time, regular work they once had prior to their disabilities.

Note as well that in Wisconsin, SSDI benefit recipients are prohibited from receiving unemployment benefits. Federal law, however, prohibits a similar disqualification for individuals receiving regular Social Security benefits.

NOTE: Because prohibitions on regular Social Security benefits are not allowed, the prohibition on unemployment benefits when receiving SSDI benefits also ends when an individual’s SSDI benefits become regular Social Security benefits — i.e., when the claimant reaches his or her Social Security retirement age.

Accordingly, Wisconsin employers have a financial incentive to hire SSDI benefits recipients, as these employees are prohibited from receiving unemployment benefits when laid off regardless of the layoff reason.

For those receiving SSDI benefits, however, the budget proposal represents a second strike: having already lost eligibility for unemployment benefits in Wisconsin, they are now slated to lose their SSDI benefits as well.

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JFC (really DWD) targets LIRC

Workers compensation administration is NOT being transferred from DWD. The workers compensation ALJs are being moved to the Division of Hearings and Appeals, however.

In unemployment, the Joint Finance Committee is approving an increase in the concealment surcharge to 40%. At present, this surcharge is 15%. The additional 25% will be used for program integrity purposes — i.e., auditing claimants. Additional criminal penalties for concealment are being deleted.

And, for the Labor and Industry Review Commission, a budget cut of $434,900 (out of a total budget of $3,612,000 and a sizable chunk of the Commission’s UI budget), transferring the cut funds to DWD for additional “program integrity,” and making the general counsel a political appointment by the governor:

18. Labor and Industry Review Commission (LIRC). Transfer the limited administrative attachment for LIRC from the Department of Workforce Development (DWD) to the Department of Administration (DOA). Further, transfer LIRC’s appropriations to be budgeted separately under Chapter 20 of the appropriation schedule. Reduce LIRC federal unemployment administration funding by $434,900 FED annually and, to the extent allowable under federal unemployment insurance (UI) law, provide these funds for UI program integrity purposes. DWD’s UI administration appropriation would be increased by $434,900 annually to reflect this provision. [Under the motion, LIRC would be attached to DOA under s.15.03 for limited administrative purposes, but would have its own appropriation schedule (currently LIRC is budgeted as a program under DWD). The provision that the Department (currently DWD, DOA under the motion) submit LIRC’s budget to the Governor without change would remain] Additionally, convert 1.0 position from classified to unclassified, and specify the Governor appoint the LIRC general counsel position.

Apparently, this provision is payback for the Commission’s red-flag memos about SSDI and concealment. These budget shenanigans raise obvious questions about how independent the Commission can really be.