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Publication Date: March 2008
Publisher: National Center for Policy Analysis (U.S.)
Author(s): Pamela Villarreal; Alan Lin
Research Area: Banking and finance; Economics
Keywords: Social Security Disability
Type:
Abstract:
The disability insurance component of the U.S. Social Security system is funded by a 1.8 percent payroll tax. It pays benefits to disabled adults who have earned a required number of credits based on previous years of work. The benefit amount is based on the wages taxed for Social Security. Most people do not realize that the system penalizes those who leave the workforce for a few years. The system often penalizes women, who are more likely to move in and out of the workforce.