Wednesday, April 22, 2020

2020 Social Security Trustees Report Released

The Social Security Trustees released their 2020 annual report on the program’s current and future financial health.

The projected date of trust fund insolvency remains unchanged at 2035. However, the long-term 75-year actuarial deficit rose significantly, from 2.78 to 3.21 percent of taxable wages. The reason for this 15 percent increase in the long-term funding shortfall is legislative changes related to the Affordable Care Act’s “Cadillac tax” on generous health care plans along with changes to both economic and demographic assumptions.

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Monday, April 20, 2020

Weaver: “Congress should refurbish an old Social Security benefit in next stimulus”

My former Social Security Administration colleague and co-author David Weaver has an interesting op-ed in The Hill that looks at expanding Social Security’s death benefit.

In a typical year, about 2.8 million Americans die. The ultimate effect on mortality of the current public health emergency is unknown, with estimates of 60,000 deaths ultimately occurring. Death is certainly an unpleasant topic, but the country can take some comfort in its well-developed social insurance programs which provide income to survivors. Most Americans likely know that Social Security pays monthly benefits to aged widows and widowers — but many people may be unaware the Social Security program also supports minor and disabled children, widowed mothers and fathers, disabled widows and widowers, and even some elderly parents upon the death of a worker.

Almost all Social Security benefits are monthly benefits, but there is an exception: the lump sum death benefit (LSDB).

This is an old feature of Social Security, having been put into place with the original Social Security Act in 1935. Over time, the one-time benefit came to be viewed by many policymakers as a way of acknowledging the higher expenses a widow faced due to a spouse’s final illness and funeral. This little-known benefit from the Social Security program may be due for some refurbishing. The reason? The benefit is only $255.

You can check out the whole piece here.

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