The Social Security Disability Insurance Program
- How hard is it to qualify for disability? Don't most people who apply get approved?
The standards for obtaining Social Security Disability benefits are strict, with only about 40% of adult applicants being approved.[3] Nearly one-third of successful applicants are approved only after an appeal.[4]
Applicants for SSDI benefits must first show they have sufficient work history to qualify. This generally means an applicant must have worked at least 25% of their adult lives and for at least five of the last ten years.[5]
To obtain SSDI benefits, it is not enough to be sick or unemployed. Applicants must prove they have a severe impairment that will last at least 12 months or will result in death.[6] And indeed, many applicants for SSDI benefits are terminally ill: 20% of male beneficiaries and 14% of female SSDI beneficiaries die within five years of receiving SSDI benefits.[7]
Applicants must likewise show that their impairment precludes engaging in substantial work. In 2013, substantial work is any employment that earns at least $1,040 per month.[8] Finally, applicants must complete a five month waiting period after the onset of their disability before benefits may begin.[9]
- Is enrollment in the SSDI program growing and if so, what are the likely causes?
While it is true that SSDI enrollment is growing, demographic factors rather than program inefficiency explain most of this growth. In December 2012, 8.8 million people received SSDI benefits.[10] This number has tripled since 1980 and doubled since 1995.[11] Meanwhile, the working-age population has grown much less rapidly.[12] In short, a greater proportion of the working-age population is receiving disability benefits now as compared to twenty or thirty years ago.
Several demographic factors have contributed to the growth in SSDI enrollment. First, the large baby-boom cohort has entered their high disability years. [13]The likelihood of receiving SSDI benefits increases sharply with age because potentially disabling health conditions tend to intensify as people get older.[14] Workers are twice as likely to become disabled at age 50 as at age 40 and twice as likely at age 60 as at age 50.[15]
Second, with more women now in the work force, more women are being awarded disability benefits on their own earnings records and work history.[16] For much of the last 50 years, many women did not have enough Social Security-covered work history to qualify for SSDI. It has only been since women joined the workforce in large numbers during the 1970s and 1980s that they acquired enough work history to qualify.[17] Now, as more women have worked long enough to qualify for SSDI, women receive the benefit as often as men.[18]
Nevertheless, even when adjusted for age and sex, disability rates have grown. From 1995 to 2005 adjusted disability rates grew from 3.5% percent of the working population to 4.6%-- a 30% increase.[19] While this increase is not as large as some critics of the program have suggested, it is significant. It is unclear exactly what accounts for this rise, although there are a number of plausible hypotheses. (See the Center on Budget and Policy Priorities Social Security is Vital to Workers with Severe Impairments)
- Does the SSDI program encourage people to leave the workforce in favor of collecting disability benefits?
For the most part, SSDI does not encourage people to leave the workforce. Disability benefits are modest and generally not enough to lure people away from employment. In December, 2011 slightly more than half of all beneficiaries received less than $1,050 per month.[20] Most SSDI beneficiaries live at or below the poverty level.[21]
The SSDI program does not substantially affect an individual's desire to work. Individuals with and without disabilities reported no difference in their desire for paid work.[22] However, people with disabilities feel that they are less likely to find work when compared to their non-disabled counterparts.[23] The variation in employment outlook may be due to fewer suitable jobs available to people with disabilities, especially if one has low education and training levels.[24] This similar desire to work suggests that the SSDI program does not encourage people to leave the workforce, but that few suitable jobs are available.
Indeed, many beneficiaries try to work, but find they are unable. A 2009 study found that 40% of disability beneficiaries were "work-oriented" but that only a small percentage – 9.7 % – was able to successfully complete a trial work period. [25]
- How will health care reform (the Affordable Care Act) affect the Social Security Disability Insurance Program?
Increased access to Medicaid and private insurance through the Affordable Care Act (ACA) may relieve some of the pressure on the SSDI program. A person found disabled under the SSDI program becomes eligible for Medicare after receiving SSDI benefits for 24 months. Indeed, access to health insurance is a significant consideration for many deciding to apply for SSDI. Correspondingly, $80 billion of the $260 billion that the federal government spends on the disability program is for health care.[26] After implementation of ACA, many individuals who may have looked to the SSDI program for health insurance will have access to private insurance through the Marketplaces or Medicaid under ACA expansions.
- Is federal spending on the SSDI program "out of control?"
The SSDI trust fund is projected to expire in 2016.[27] This expiration was predicted by the Social Security actuaries in 1994 and now comes as no surprise as SSDI spending over the past twenty years has grown exactly as predicted.[28] However, if the SSDI trust fund is depleted and policymakers take no action, SSDI benefits will be cut by 20% -- a crushing blow to the individuals and families who rely on the benefit.[29]
Conclusion: Consider Solutions to Address Growth and Improve the SSDI Program without Hurting BeneficiariesSeveral policy proposals to improve the efficiency of the Social Security Disability program have been offered recently.[30] The SSDI program can and should be improved to ensure long term solvency, but not at the expense of millions of severely disabled beneficiaries who rely on the benefit. Attempts to undertake sweeping restructuring of the SSDI system should be undertaken only with caution and due diligence and within the context of the entire Social Security program—both Old Age and Survivor Insurance and Disability Insurance.
For more information, contact attorney Andrea Callow (acallow@medicareadvocacy.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.
[2] Nearly half of all SSDI beneficiaries rely on the program for at least half of their family income, while benefits account for virtually all of the income received by 20% of beneficiaries. Favreault, Johnson & Smith, How Important is Social Security Disability to U.S. Workers? The Urban Institute (June 2013) http://www.urban.org/url.cfm?ID=412847&renderforprint=1
[3] Kathy A. Ruffing, Social Security Disability Insurance Is Vital to Workers With Severe Impairments, The Center on Budget and Policy Priorities (Aug., 2012) 9, http://www.cbpp.org/cms/?fa=view&id=3818
[4] Id.
[5] 42 U.S.C. §414. For a detailed explanation of the insurance requirements, see “Disability Planner—How Many Credits You Need,” at http://www.ssa.gov/dibplan/dqualify3.htm.
[6] Id.
[7] "Unfit" for NPR Let's Get the Facts Straight on Disability: Social Security Disability Programs Are a Vital Lifeline for People with Severe Disabilities, Consortium for Citizens with Disabilities (April, 2013): http://www.c-c-d.org/task_forces/social_sec/Unfit_for_NPR_CCD_Statement_with_sign-ons3-27-13.pdf
[8] 20 CFR 404.1502 See also, SSA.GOV, Substantial Gainful Activity http://www.socialsecurity.gov/OACT/COLA/sga.html
[9] The Congressional Research Service, Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits (January 24, 2013) http://www.fas.org/sgp/crs/misc/RS22220.pdf
[10] Supra at Note 2
[11] Supra at Note 2
[12] It has increased by 40%since 1980 and by less than 20% since 1995. Supra at Note 2
[13] Paola Scommegna, Aging Baby Boomers Face More Disability, Population Reference Bureau (March, 2013) http://www.prb.org/Articles/2013/us-baby-boomers.aspx
[14] Favreault, Johnson & Smith, How Important is Social Security Disability to U.S. Workers? The Urban Institute (June 2013) http://www.urban.org/url.cfm?ID=412847&renderforprint=1
[15] Supra at Note 2
[16] Supra at Note 2
[17] Supra at Note 2
[18] Supra at Note 2
[19] Supra at Note 2
[20] Favreault, Johnson & Smith, How Important is Social Security Disability to U.S. Workers? The Urban Institute (June 2013) http://www.urban.org/url.cfm?ID=412847&renderforprint=1
[21] Supra at Note 13
[22] Ali, Schur & Blanck, What Types of Jobs Do People with Disabilities Want, J Occup. Rehabil. (2011) 21:199–210 (Oct. 6, 2010) http://bbi.syr.edu/publications/blanck_docs/2011/ali_schur_blanck_jobs_pwd_want.pdf
[23] Id.
[24] Id.
[25] Gina A. Livermore, Work-Oriented Social Security Disability Beneficiaries: Characteristics and Employment-Related Activities, Center for Studying Disability Policy (Dec., 2009) http://www.ssa.gov/disabilityresearch/documents/TTW5_Brief_1_WOB.pdf
[26] Brand Plumer, What This American Life Missed on Disability, The Washington Post (March 28, 2013) http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/28/harold-pollack-what-this-american-life-missed-on-disability-insurance/
[27] Statement of Stephen C. Goss, Chief Actuary, Social Security Administration before the House Committee on Ways and Means, Subcommittee on Social Security (March 14, 2013) http://www.ssa.gov/legislation/testimony_031413a.html
[28] Statement of Stephen C. Goss, Chief Actuary, Social Security Administration before the House Committee on Ways and Means, Subcommittee on Social Security (March 14, 2013) http://www.ssa.gov/legislation/testimony_031413a.html
[29] Supra at Note 6
[30] Policy Options for the Social Security Disability Insurance Program, The Congressional Budget Office (July 2012) http://cbo.gov/sites/default/files/cbofiles/attachments/43421-DisabilityInsurance_print.pdf; Proposals Addressing Trust Fund Solvency, www.ssa.gov, http://www.ssa.gov/OACT/solvency/; Summary of Provisions That Would Change the Social Security Program, www.ssa.govhttp://www.ssa.gov/OACT/solvency/provisions/summary.html; See also Kathy A. Ruffing, Social Security Disability Insurance Is Vital to Workers With Severe Impairments, The Center on Budget and Policy Priorities (Aug., 2012) 9, http://www.cbpp.org/cms/?fa=view&id=3818
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