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Will the government shutdown affect Social Security benefits?

On behalf of Jeffrey Rabin of Jeffrey A. Rabin & Associates, Ltd. posted in SSA on Friday, September 27, 2013.

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There is no doubting that the federal government has had a rough couple of years recently. With the massive recession and the sequester not far behind us, the new threat of a government shutdown has many Illinois residents fearful once more that these financial problems could threaten their Social Security benefits once more.

We ask then: will the government shutdown affect Social Security benefits such as SSD and SSI? Like with the recent sequester, it’s difficult to give our readers a definite answer. What our readers should know is that the trust fund from which SSA draws benefits for SSD and SSI payments will likely not lose funding. Receiving benefits on time is also another concern; but if one considers the outcome of past government shutdowns, it’s likely there will be little change in how people are currently receiving their benefits or how much they are receiving.

What could change is how long it takes to process new applications and clear out the backlog. With a potential shutdown, staff could be cut to save money while the shutdown occurs. As a result, the concerted efforts to reduce the backlog to the current levels could be all for not and surge back to the levels it was at only a few years back. A reduction in staff could also mean longer wait times on appeals as well or even a spike in the number of denied claims. As readers of our blog know, this could create a substantial problem for beneficiaries who may rely on these benefits for everyday necessities.

While an appeal of a denied claim may still be possible, the impending government shutdown does beg the question: who will hear the cases? It’s unclear whether the shutdown could reduce the number of judges or if the appeals process will be put on hold until Congress can make a decision on the federal budget. From what our readers might gather, this could potentially create problems for beneficiaries across the nation in the weeks to come.

Source: CNN Money, “Shutdown: Are Social Security payments at risk?” Jeanne Sahadi, Sept. 24, 2013


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