August 6, 2020
Public-Sector Disability is Fairly Generous
About one in four state and local government employees – some 6.5 million people – do not participate in the Social Security system. They get their disability insurance, as well as their pensions, from their employers.
Whether the coverage is more or less generous than Social Security disability depends on the individual worker’s circumstance and how the state or local employer calculates benefits. But a new study concludes that public-sector workers who have a disability generally receive benefits that are at least as generous as the federal benefits.
To compare them, researchers at the Center for Retirement Research had to construct a database with each state’s and locality’s eligibility requirements and benefit payments. The sample consisted of 67 different disability programs, which cover a majority of the U.S. workers who don’t pay into Social Security.
The main thing Social Security and the public-sector have in common is eligibility – a 35-year-old must have five years of employment to receive federal disability and four to six years under most public-sector programs. One way they differ is that most state and local governments have a more liberal definition of what qualifies as a disability. Social Security pays benefits to a worker who can no longer do any job. Public-sector benefits go to a worker who can’t continue doing his current job.
The disability benefits are also calculated differently. Social Security’s progressive formula is the most generous to low-wage workers, because it replaces a higher percentage of their past earnings. But each state and local government uses the same formula for all of its workers, regardless of their earnings, and the formula gives more credit to employees who have been with their employer the longest.
What does all this add up to? The older public-sector workers, who are most at risk of developing a disability, receive relatively generous protection under the state and local programs, because the eligibility requirements are less strict than Social Security’s and because the benefits for most long-tenured employees replace a higher percentage of their earnings.
Older people who moved into the public sector late in their careers are in a different situation. …Learn More
July 28, 2020
Retirement Research Presented Virtually
Like much in life under a pandemic, the research presentations for the Retirement and Disability Research Consortium’s annual meeting are going virtual.
This year’s online meeting will also be scaled down from the traditional two days to one: Thursday, Aug. 6.
The purpose of the meeting, which is usually held in Washington, D.C., is for academics from universities and think tanks to describe their latest research to colleagues, policy experts, financial professionals, and the press. Topics this year will include taxes in retirement, federal disability insurance, housing, health, and labor markets. The U.S. Social Security Administration has funded the research and is sponsoring the meeting.
The agenda and information about registration are available online, and participants can register anytime. Questions for the researchers can be submitted during the presentations via a moderator.
One fresh idea being explored this year is taxes in retirement. Taxes are central to whether retirees have enough money to cover their essential expenses, but households that are approaching retirement age may not factor the need to pay federal and state taxes into their planning. Despite the importance of this issue, only a handful of existing studies have tried to estimate the tax burden. This paper fills the gap.
One session will feature a pair of papers looking at whether cognitive decline has a detrimental effect on older Americans’ finances. One will explore whether dementia leads to financial problems overall, and the other will focus exclusively on debt.
Researchers will also try to resolve a conundrum in the disability field: why are applications for federal benefits declining at the same time that Americans’ health is deteriorating? One hypothesis is that jobs are becoming less physically demanding. A second disability study will produce a publicly available database for researchers who want to examine the local factors affecting applications.
The agenda lists all of the papers that will be presented. Learn More
July 23, 2020
Some with Severe Mental Disability Work
People with intellectual disabilities, autism, or schizophrenia have high rates of unemployment. But a new study finds that some can find part-time or even full-time jobs with the help of coaches funded by the government.
Having a coach doesn’t guarantee that a person with a disability will get a job. But in a 2019 study, the people who received this support “were significantly more likely to become employed” than those who did not get the help, according to researchers for the Retirement and Disability Research Consortium.
To get and keep these jobs requires a lot of personal attention. The federal-state Vocational Rehabilitation program provides coaches – often at non-profits – who find the right jobs for their clients and then act as a liaison to smooth out the bumps and guide the employer-employee relationship.
Because the cognitive disabilities of the individuals in the study varied so much, the researchers broke them out into nine groups, based on their specific disabilities, education levels, and likelihood of benefitting from the program. In all but one of the nine groups, the people who received support had significantly higher employment rates than those who did not receive the help.
Between a third and half of the people with coaching support had a job, the researchers found. Among the people who did not receive any support, employment rates were as low as one in four. …Learn More
July 14, 2020
College Debt Boosts Disability Requests
During the steel and coal busts of the 1980s, applications for federal disability benefits rose in areas where these industries had laid off workers. Now there’s a 21st century reason to apply: student loans.
College debt is extremely difficult to discharge in the bankruptcy courts. But the U.S. Department of Education in 2013 opened a new avenue for potentially eliminating federal student loan debt. Former college students whose disabilities are severe enough to qualify them for disability benefits can then apply to the Department of Education for loan forgiveness.
Since 2015, the typical person approved for the program has eliminated $17,500 in college loans.
The prospect of discharging the onerous debt created a powerful financial incentive. After the program began, the probability that an individual with student loans would apply for disability with the U.S. Social Security Administration was much higher than for individuals with no loans, a new study found. The increase in applications was largely from people who had not earned any money the previous year and may have had few options for paying their debt.
The older workers who took out student loans – sometimes on behalf of their children – may be “aching to retire” anyway, the researchers said, and receiving disability and loan forgiveness would accomplish that. But the younger people who applied may simply have been motivated by a desire to discharge their college debts.
However, seeking disability benefits as a strategy for eliminating the debt didn’t work very well. …Learn More
May 28, 2020
Moms of Kids with Disabilities Get Help
Finding child care is difficult for any working parent. It is an even bigger challenge when the child has a disabling condition.
About 1.2 million children under the age of six in the United States are disabled. A new study suggests that federal child care programs may be helping to keep their mothers employed either by meeting their need for care through programs like Head Start or by subsidizing their child care expenses. These supports are particularly important to low-income, single mothers in precarious financial situations.
Preschool children with disabilities were actually more likely to have regular care – at least 10 hours per week – than children without disabilities. And although disabled children’s care arrangements were more likely to be part-time – as was their mother’s employment – they had higher rates of enrollment in child care centers, rather than being in a relative’s care. In the best situations, the centers provide the specialized care these children need.
Their child care costs were also significantly lower, perhaps due to the federal subsidies. For example, families of four-year-olds with disabilities spend less, on average, than the families of children without disabilities, according to research for the Retirement and Disability Research Consortium.
Mothers who stay home to care for infants usually start migrating back to work when the children become toddlers or are approaching kindergarten age.
The researchers gauged the effectiveness of the federal child care programs for disabled preschoolers by comparing their mothers’ employment patterns with other working mothers. The analysis, based on data from U.S. Department of Education interviews with parents, found that both groups had similar changes in their work behavior during these challenging early years.
Federal child care policies, the researchers concluded, “may be adequately supporting employment for parents of children with disabilities.” …Learn More
May 14, 2020
Opioid Abuse Tied to Where People Live
In 2019, the U.S. Attorney’s Office in northern Oklahoma detained one doctor charged with operating a pill mill that prescribed opioids to addicts for the simple reason that he presented “a danger to our community.”
While mental illness and unemployment are familiar culprits in the opioid crisis sweeping the country, the environment that people live in – including the prevalence of unscrupulous doctors – is actually important as well.
That’s one conclusion in a new study that found that people are more likely to become addicts if they move from an area with a relatively low level of prescription opioid abuse to a high-abuse area.
The research looked at more than 3 million people on federal disability insurance (DI) – a group that uses opioids at much higher rates than the general population. More than half of DI recipients are prescribed opioids in a given year. And since they are covered by Medicare, the researchers had access to the prescription records for Oxycontin, Vicodin, and morphine.
To gauge the impact of moving to a new location, the researchers created an index that estimated the extent of prescription opioid abuse in each U.S. county. The index took into account several factors, including the amount of opioids prescribed to patients and their use of multiple prescribers.
When DI recipients moved from a county at the low end of this index – the 25th percentile – to the high end – the 75th percentile – their rate of prescription opioid use increased nearly 5 percent, according to the study conducted for the Retirement and Disability Research Consortium.
People with a prior history of prescription opioid use were at particularly high risk of prescription opioid abuse if they moved to a high-use area. …Learn More
March 19, 2020
People on Disability Use Payday Loans
Taking out a high-cost payday loan is an act of desperation, and people on federal disability are some of the biggest users.
Nearly 6 percent of households under 66 and on disability use payday loans, compared with 4 percent of the general population, according to Haydar Kurban at Howard University, who did the analysis for the Retirement and Disability Research Consortium.
The financial vulnerability of disability recipients was starkest in the months after the 2008-2009 recession, when their use of payday loans spiked to 22 percent. The rate of borrowing also rose at the time for the general population but by much less.
Disability benefits under the federal Supplemental Security Income (SSI) program average about $900 a month. To eke out a living, people on disability try to supplement their income with food stamps, Medicaid, some work, or housing assistance from the government or a family member – and some use payday loans to raise quick cash. (A small share of people in this study are not disabled but receive SSI to supplement their Social Security benefits.)
Despite the very low incomes of the disability beneficiaries, they are attractive customers for payday lenders, Kurban said, because the benefit checks provide extra assurance the loans will be repaid. …