As recent news stories explain, the Social Security Disability Insurance Program (SSDI), which gives money to workers who become disabled, will be insolvent in six years. While the causes of this trend are various, a new book suggests that the solution might be simple: Encourage people with disabilities to work, rather than encouraging them not to.
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The explosion in disability is easy enough to document. Over the last ten years alone, the number of disability recipients has grown by about 50 percent. The average award has grown faster than inflation.
A large portion of this has to do with the simple fact that our population is aging. As you can see on this spreadsheet, which I created with federal data, the increase in disability beneficiaries occurred overwhelmingly among those 50 and older — a demographic that is growing as the Baby Boomers join its ranks. For example, between 2000 and 2010, the number of Americans in the 55–59 age bracket rose by 42 percent.
But at the same time, the number of disability beneficiaries in this demographic grew by 73 percent — meaning that while the ranks of the middle-aged and elderly have swelled, individuals in these ranks have become more likely to claim disability. If Americans in each age bracket still went on disability at the rate they did in 2000, there would be 22 percent fewer beneficiaries.
An obvious explanation is that disabled people have had a hard time finding jobs over the last few years thanks to the rough economy, and have responded by convincing the government that they are incapable of work. However, according to data collected in The Declining Work and Welfare of People with Disabilities — a new book by Cornell economics professor Richard V. Burkhauser and Federal Reserve Bank of San Francisco economist Mary C. Daly — the disability rolls grew only slightly faster than normal during the recession. If the previous trend had held, the program would still be in trouble.
The problem, Burkhauser and Daly report, is that people with disabilities have chosen government payments over work, not because of short-term economic trends, but because public policy encourages them to. And while recent reports have tended to focus on the last ten years, the problem has been growing for much, much longer.
In 1981, a government survey found that 7.3 percent of American had disabilities that affected their ability to work; of these, 35 percent held jobs anyway, and 32.6 percent collected payments from the government. In 2010, a similar proportion reported work-relevant disabilities — 7.8 percent — but 51.4 percent said they received government payments, and only 22.6 percent said they worked.
Changes in government policy between the two surveys explain the difference. By 1983, various policy changes had eliminated the program’s regular reevaluations of its beneficiaries, making it much harder to remove people from the rolls. In 1986, the standards for mental illness loosened. And throughout SSDI’s history, Social Security’s bureaucrats have become progressively more lenient when they make judgment calls about conditions that don’t necessarily prevent people from working: In 1967, about 20 percent of those on disability had mental illnesses or musculoskeletal problems; by 2009, more than half did.
Burkhauser and Daly, drawing on the lessons of the Netherlands’ disability reforms, as well as America’s own welfare reforms, say the solution isn’t just to tighten the standards, but rather to change the incentives the system creates. Right now, the system encourages workers to take government handouts, and it encourages their employers to help them.
Like welfare before reform, SSDI benefits are eliminated whenever beneficiaries start making their own money. Today, the cap is about $1,000 a month; once a disabled worker’s earnings cross that threshold, he loses all benefits. In the short run, therefore, it’s best for an SSDI recipient not to work too much.
The critical area unaddressed by this article is the explosion of fraud in the program. There is an entire industry geared towards driving low income families into the SSD system - not just individuals, but entire families. An adult will typically receive a monthly check (tax free) between $1100-1900/month, but each child labelled as disabled adds an additional $680/month (also tax free.) Quick math will tell you that a single mother (typically no father in the picture) with three children receving SSD will receive a net income of $3-4000 per month, which is typically far more than she would be able to earn with a 'low skill' job. Add in the 'retroactive' payment of SSD settlements, which provides the one time cash infusion to pay a five figure commission to an SSD attorney, and we have created a recipe for a program rife with fraud and waste.
Yes, yes yes! I'm willing to bet that claims of 35-50 year olds have increased by 1000% in the last 20 yrs. The amount of able bodied "disabled" collecting benefits is astounding.
Exactly who receives disability? I have been told that the mentally disabled from birth receive disability and ssi. Of course, they have never worked nor contributed if that is in fact the case.
I am not suggesting that the least of us should not be cared for; however in most cases the actual parents are completely relieved of responsibility and the state takes over; regardless of how much income the parents have. if one has never worked nor contributed it seems ridiculous to believe there could ever be enough money to pay to those that have.
Do prisoners receive ssi or disability? Simply a question which could be discussed since the state would of course be paying for their entire care??
Just a note: SSI (Supplemental Security Income) and SSDI (Social Security Disability Incone) are two different things.
SSI is for children and adults with disabilities who have a limited income. There are many adults with developmental disabilities who work and receive SSI (if memory serves, the amount is adjusted based on your other income, assets, etc.)
SSDI is for people who have worked (i.e. paid into Social Security) but who have become unable to work due to disability for at least a year.
SSDI is funded from FICA taxes, like SS retirement. SSI is funded from general revenues. Of course, like most discussions of the SS "trust fund" this is an accounting fiction. The government has intermingled the TF with general revenues for so long that it isn't very meaningful to speak of them as separate entities.
I agree with most of your observations. The problem is that people really are being injured at the workplace. My husband was five years short of retirement when he was in a horrible accident at work.
He was working on the building of a new high school when a wall collasped on top of him. It broke his back in four places, he is now 3 inches shorter than he was and he has so much metal in his back that we have trouble at the airport. He cannot lift more that 5 pounds. It was a work site injury. He told them repeatly that the wall was not stable, the brick wall was listing and he told the supervisor it was listing and yet he was ordered to try to attach the wall, he did, it collasped on him shattering the top 4 vertabrates in his back. He has a 3 pound weight pick up limit. We would not be able to keep our house without the disability. We both paid taxes for 30+ years and I still work full time. We paid into the system since I was 15 and my husband has also paid taxes since he was 15. What else were we supposed to do? We had paid insurance all of our life and my husband cannot pick up a gallon on milk with wincing. We are not taking advantage of anyon or any thing.
Twisted sis, I don't think your husband is being targeted. Who is being targeted are people like my estranged father-in-law. He's been collecting since 1975, when he had a legitimate tree service accident. He's blind in one eye, but in no pain and gets around just fine. He apparently went from doctor to doctor until he found one who would corroborate his "story". He's spent the last 36 years contributing nothing to his family or society. His accident is the best thing that ever happened to him. Sadly, there are no doubt others out there just like him.
Like the others, I don't believe the writer is targeting real cases like yours. You and your husband paid your dues, and it seems at least is it is working for you. The best to you. However I think you should be for reform the most, as you have the most to lose, as cheaters and fraud will likely lead to a complete end of this system.
I knew a family who adopted a child who then had to be institutionalized for life. The father had a steady paying job, got up every morning and put his shoes on just like we expect. However, a child with a severe mental illness, who has to be hospitalized, can easily run up tabs in the six figure range EVERY YEAR. The family had health insurance, but the limit for the policy (lifetime maximum payout) was quickly reached by this one childs needs. To keep their house, and be able to attend to the needs of their other children, they were forced to give the child up, and now the State of Maryland has to keep the child in the mental hospital. This is no joke, and braying about the "parents responsibilities" only works if you expect everyone to be able to earn a seven figure salary. Oh, and the child will likely be able to receive SSI benefits as an adult.
Based on the level of impairment that you describe, the child is almost certainly eligible for SSI now,and will be in adulthood. I would expect that the state probably got the application process started as a standard part of the admissions process.
Several years ago, an article in Mississippi's largest newspaper reported that more than 35% of the adults in a poor town in the Mississippi Delta were disabled. That of course was not true. But it was true that more than 35% had successfully alleged they were disabled and thus were receiving social security disability benefits. Most were no doubt perfectly healthy but had succeeded in gaming a system that's easy to game.
Don't ask me for detailed info on how to do it, but society would be better off if we encouraged paying work by both the disabled and the retired. Taxpayers would be eased, and the disabled and retired would profit in both income and self-respect.
What's more, the need for legal and illegal alien workers would decrease.
This is an excellent article. In my low income clinic I see 1-2 patients every day that are applying for disability. Most are between 40 and 55 years old. Most did some construction or labor work and have back and knee pain. Every one of them could do some type of work.
The biggest obstacle is a lack of interest in work. Any new job will bring self esteem issures. They will not feel comfortable around their co-workers who will be younger, smarter about office and other non-labor jobs. There wil not be the same social connections of going out for beer after work with the construction crew.
As long as the government takes money from someone works every day and gives it to pay someone to stay at home and watch television, the numbers of disabled wil grow and the economy will shrink.
This really needs structural fixes. My wife's cousin is married to a guy who had a legitimate work injury (serious shoulder injury). He was a delivery driver, and now can no longer lift the weight needed to return to this job. He is certainly capable of moving to office jobs or the like that don't take lifting, and he's more than smart enough to do that. The COMPANY'S doctor has certified him as essentially permanently disabled, and in looking at other jobs he could do, he's finding that he would go to significantly lower pay, in most cases NO health benefits, and relatively long hours (50+ week). So, he makes more money, with better benefits, for not working. He actually WANTS to go work, but the given the economic choices presented to him, he makes his family worse off by doing so.
Given our current trajectory, waste and fraud in these programs will only get worse. It's amazingly easy to get qualified as disabled. Just observe people who park in handicapped spaces sometimes and take count of how many appear disabled to any degree.
sdsundevil, I am one of those people you would likely judge do not appear disabled. At 61 years of age I have little gray hair and look younger. But six years ago I suddenly began having significant pain while standing. Tests revealed spinal problems, which have worsened in the meantime. I held off as long as I could in getting handicap plates (though I was eligible at first diagnosis), but I've reached the point where walking is so iffy and painful that I cannot walk across a parking lot.
I am grateful that I can sit without pain and have appropriate employment. But I have to park in close-in spaces or let my family run all my errands.
I know there are those who look at me, see no walker, braces, or wheelchair, and make a judgment. I would hope they would think twice before rushing to judgment.
On the SSI for kids. My son was a low birthweight baby (he was 2-months premature). The costs go on forever (or at least they have so far). We were told to apply and told that there were no income restrictions. Reality is, they do look at assets (or at least they did for us). I had $15,000 in an accoun t for my business. I was told to "go buy a car" and then we would qualify. So, I was supposed to endanger my business (it is how I feed the family) to get this benefit.
I will admit it felt odd applying (I was the only person in the waiting room wearing a jacket-or clean clothes). But I figured, I really don't make much money and I have been paying into the system for about 30-years. I guess I just wasn't the right demographic. I couldn't see risking the business (and it seemed like a really dumb thing to do).
I'm retired from a large corporations. Although I get a lot of enjoyment from hobbies, travel, and various projects around my house, it doesn't provide the same level of satisfaction and self esteem as a job. We should be trying to move toward a society where everyone regardless of age or disability works at some type of job even if these jobs are part time and, in some cases, fairly menial. Productive work benefits both the individual and society. Being idle all day gradually erodes the mind, health, and self esteem of most people.
