What is likely to happen to Social Security disability over the next five to ten years?  History may offer some guidance but Social Security’s looming trust fund problems will most likely dictate Congressional action.

Every year, SSA produces what is known as a “waterfall chart.”  Not sure what waterfalls have to do with this but this chart shows the approval rates for each stage of the disability adjudication process.  It is interesting to look at the waterfall charts over the past 1o to 15 years where you can see how approval rates have fluctuated.  Generally speaking approvals at initial have remained fairly constant – around 35% of initial applications are approved.  Reconsideration (the first appeal) fluctuates between 12% and 18%.  At the hearing level, however, we have seen approval rates (nationally) as high as 63% and as low as 45% (in 2023). In 2025, hearing approvals averaged 50% nationally.

There are many theories about why approval rates at hearings go up and down.  My own theory is that Social Security administrators are very focused on the state of the Disability Trust fund.  According to a “think tank” called the Bipartisan Policy Center, the Social Security trust fund will become “insolvent” in 2032. This  means that the funds coming in (via taxes) won’t be sufficient to pay benefits.  In theory (and this is unlikely to happen) this insolvency will trigger an automatic cut in benefits of 22%.

Possible Fixes to Social Security Insolvency

At some point – probably at the very last minute – Congress will act and shore up the trust fund by:

• removing or raising the wage limit for payroll tax contributions to Social Security (in 2026 wage earners pay Social Security tax on the first $184,500 of gross earnings)
• raising the tax rate (in 2026 both employers and employees pay Social Security tax of 6.2% of income)
• move funds from general revenue to Social Security
• raise the retirement age – in 2026 FRA or “full retirement age” is 67
• change the COLA (cost of living adjustment formula) to reduce annuala increases to Social Security recipients
• change the requirements to qualify for Social Security disability – for example in 2025 the Trump Administration floated the idea of modifying or eliminating the Grid Rules (Medical Vocational Guidelines) but tabled that idea after significant negative feedback
• increase funding for more continuing disability reviews to terminate disability benefits for claimants where there has been medical improvement
• tightening the definitions set out in SSA’s Listings of Impairments
• increasing funding for fraud investigations

Depending on your political leanings and/or personal economic situation you may find some of these alternatives attractive and others as being totally unacceptable. Which of these changes are adopted will depend in large part on politics.  We are already starting to see proposals for Congressional commissions to study the problem, but I suspect that the real bargaining won’t begin in earnest until sometime in 2031.

In the meantime, the current Social Security Commissioner, Frank Bisignano, is taking steps to reduce staffing costs at SSA (around 20% of SSA staff has been laid off), to use more automation and to centralize continuing disability reviews.  There have also been efforts to reduce the independence of Social Security Administrative law judges so that SSA can put downward pressure on approval rates.

Social Security Changes Driven by Political Forces

I think it is important to look at the 2025 and future waterfall charts in the context of the political and financial realities that  Congress is facing when looking at Social Security.

One final point – Social Security has long been considered the “third rail” of American politics meaning that members of Congress have been reluctant to take any action that might reduce Social Security benefits.  I think this “third rail” argument applies mainly to Social Security retirement.  Organizations like the AARP are hyperfocused on any threats to Social Security retirement and they will mobilize senior voters (and senior voters are more likely than younger voters to cast ballots) against any politician who even implies support of changes to Social Security retirement.

The AARP is not a disability benefits organization and their core mission is directed mostly to preserve Social Security retirement.  There really is no organization like the AARP to focus on the interests of individuals seeking or trying to preserve disability benefits.  In a political sense, therefore, Social Security disability is a much easier target for Congress although I suspect that the AARP and organizations like it would be concerned about the “slippery slope” whereby changes to Social Security retirement could be tossed into a bill focused primarly on Social Security disability.

So, in the context of Social Security’s political and economic realities here is the most recent (2025) waterfall chart. We will break down the meaning of this chart in a future blog post: