Can The Economy Affect Social Security Disability?

Submitted by Elizabeth on

You’ve probably been seeing a lot of information lately about Social Security and the economy. But if you’re worried that your benefit amount will be lowered because of the economy don’t worry. 

Social Security disability is funded through a dedicated payroll tax that both employers and employees pay into. The economy may have an impact on Social Security fund reserves depending on unemployment numbers and economic conditions. But that won’t have any impact on your particular benefit amount. 

How The Economy Impacts Disability Benefits  

The state of the economy does play a role in the overall financial health of the fund that is set up to pay for Social Security disability benefits. But that won’t make any difference in the amount of money that you’re receiving monthly. Some of the ways that the economy can impact the long-term health of the fund that pays for disability benefits are: 

Interest Rates 

When interest rates are low it can lower the amount of money that the United States Social Security Administration (SSA) makes on interest. By law, the SSA has to take whatever money is surplus from the fund and invest it in a special type of government bond. When interest rates are low the SSA makes less money on those investments. 

Greater Demand 

Another way that the economy can impact Social Security disability is that there will likely be more people applying for benefits if the economy is poor. When more people are drawing benefits that pool of money that is used to fund the benefits will get depleted faster. 

Less Taxable Income 

When the economy isn’t in a good place there will be less taxable income available from employers and workers. That means that the money the SSA is paying out won’t be replaced as quickly as it would be if the employment situation were more robust. 

Explore the intricate relationship between the economy and Social Security disability, as this article clarifies that while economic conditions can influence the program's financial health, your monthly benefits remain unaltered, except in specific cases of wage garnishment or exceeding income caps.

Why Disability Payments May Be Lowered 

Even though the economy does impact Social Security and how much money is available to pay benefits the economic conditions won’t cause the SSA to lower monthly payments to people that are already receiving benefits. There are only two scenarios where you might have your monthly benefit amount lowered: 

Wage Garnishment 

If you have a court-ordered garnishment of your wages to pay things like back taxes, child support, or other obligations that money can be taken from your Social Security disability benefit amount each month. 

Making Too Much Income 

If you’re working and you are earning income your benefit amount may be reduced if you have income that is greater than the Social Security Administration’s cap on income. 


Can the economy affect Social Security? Yes, the economy can impact how much money is available to fund Social Security benefits. But the state of the economy won’t have any impact on how much money you receive each month. The only times that your benefit can be reduced once it’s awarded is if you are making too much money or if you have a garnishment order. 

If you have questions about the Social Security disability benefits that you are receiving each month fill out a Free Case Evaluation form on this page right now. You’ll immediately be connected to a local Social Security attorney who can answer your questions and help. 

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