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What Does the Sequestration Mean for Disability Benefits?

Posted on Mar 15, 2013

On March 1, a series of budget cuts was put into law by the Budget Control Act of 2011. These cuts, or the “sequester,” were designed to bring down the national debt if Republicans and Democrats could not agree on a compromise. The idea of the “sequester” was supposed to put pressure on both parties to cooperate in budget talks. However, the parties were not able to agree, and on March 1, 2013, the first $85 billion in budget cuts went into effect.

The good news is that Social Security disability benefits (SSDI and SSI) are exempt from budget cuts and are not affected by the sequester. However, the Social Security Administration will have to make administrative cuts. These cuts could slow down the already slow disability benefits application process.

Medicare benefits, including Part D low-income premiums, cost-sharing subsidies, and catastrophic subsidy payments, will also remain the same. But, doctors will take a two-percent cut in payments. The cut in payments may mean that some doctors drop Medicare patients.

Veteran’s benefits and Medicaid are also exempt from the sequestration budget cuts.

So, what will be affected? All non-defense government programs will face an 8.4 percent budget cut. These cuts could affect subsidized housing programs and rental assistance, special education, transportation, and vocational rehabilitation. While disabled Americans will not see a reduction in social Security disability benefits, they may find that their check doesn’t go as far because of reduced federal funding to other programs that assist the poor and disabled.

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John L. Keefe
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Founding Attorney of Keefe Disability Law