Have you ever wondered about the
Disability Insurance Trust Fund, what it is and how it works? In this post, we’re going to give
you a brief explanation of this special account and what its funds are used for.
Disability Insurance Trust Fund is a “separate account” in the United States Treasury, which
is used specifically for funding Social Security Disability benefit payments.
A fixed proportion of the taxes received under the Self-Employment Contributions
Act and the Federal Contributions Act, depending upon the allocation of
tax rates by the fund, are directed to the fund, providing that these
taxes are not immediately needed to pay expenses.
These taxes are deposited into the account each business day.
The trust fund gives automatic spending authority to the Social Security
Administration, which uses the money to pay monthly benefits to disabled
workers, their spouses and children. Since the SSA has this “spending
authority,” the agency does not need to ask Congress for money to
pay the benefits.
The funds are used for current expenses, including:
Social Security Disability benefits, the Railroad Retirement program, and administrative expenses.
The funds which are not withdrawn for expenses are invested in interest-bearing
Federal securities – this is required by law. Then, any interest
earned is deposited into the trust fund.
Disability Insurance Trust Fund (DI) was established by the Social Security Act Amendments of 1956, with
the DI going into effect on January 1, 1957. The DI is administered by
a Board of Trustees, which is made up of six individuals, including:
- The Secretary of the Treasury, who is the managing trustee;
- The Secretary of Labor;
- The Secretary of Health and Human Services; and
- The Commissioner of Social Security.
The other two members of the board of Trustees, who serve four-year terms,
are appointed by the President of the United States, and they are confirmed
by the Senate; this is required under the Social Security Amendments of 1983.
We hope this clears up any questions you have about the
Disability Insurance Trust Fund. If you are interested in applying for Social Security Disability benefits,
don’t hesitate to
contact a Dallas SSDI attorney from The Zendeh Del Law Firm for assistance!