August 13, 2019
Fewer Contingent Workers Seek SSDI
The vast majority of so-called contingent workers – think Lyft drivers, AirBnB hosts, independent contractors, consultants, and freelancers – have built up the work history necessary to apply for federal disability benefits if they become injured.
The 86 percent coverage rate for contingent workers in their 50s and early 60s is less than the 92 percent for regular workers – but not by much.
Despite their relatively high rates of eligibility, however, older contingent workers are significantly less likely to end up on Social Security Disability Insurance (SSDI) than similar workers in traditional jobs, according to a new study by the Center for Retirement Research.
This finding is mainly driven by contingent workers’ lower application rates for SSDI. Applications are lower even for people with the physical, cognitive or emotional conditions that the government explicitly lists as SSDI-eligible.
“Even the contingent workers who need SSDI the most are less likely to apply for and be awarded benefits,” the researchers said.
They offer a couple reasons for the lower application rates. One reason might be that contingent workers would get less in their disability checks than workers with traditional jobs receive, because the benefits are based on earnings – and contingent workers earn an average $592 per month less than other workers.
A more compelling explanation is that they simply lack access to the natural avenues for learning about the program’s existence and their potential eligibility: unions, fellow employees, and a traditional employment arrangement. For example, private-sector employers often require people on their payrolls to apply for federal SSDI before receiving the company’s disability coverage. Contingent workers outside of this kind of arrangement are rarely covered by any employee benefits, let alone private disability insurance. …Learn More