Posts Tagged "SSDI"
January 18, 2022
Downturns Attract Healthier DI Applicants
A theory – untested until now – about why more people apply for federal disability during recessions is that the depression, stress, or unhealthy behaviors caused by unemployment worsen their health and spur them to apply.
This explanation is largely ruled out in a new study out of Cornell University and the University of Illinois.
For each percentage point increase in local unemployment rates, more people with disabilities join the roles – about 45,000 more across the country. This finding, covering a period of 25 years, confirms what the existing research says about the connection between the economy and disability. Disability benefits, which average just under $1,300 per month, look more appealing when employment opportunities are scarcer.
When the researchers investigated why caseloads increased, they found evidence that seemed to contradict the hypothesis that people who apply during downturns are not as healthy. Once they get on the disability rolls and become eligible for Medicare, annual Medicare spending on these new beneficiaries was slightly less than spending on the people who were already in the program.
Still, the researchers weren’t convinced the recession applicants tend to be healthier. Needing more evidence, they looked at Medicare spending for the disability beneficiaries who had applied to the program at 50. At that age, Social Security loosens the eligibility rules, making it easier to qualify.
The logic behind this part of the analysis is that the 50-year-old applies not because his medical condition or disability suddenly deteriorates after his birthday but in direct response to unfavorable economic conditions. Individuals pulled into the disability insurance program by the laxer rules are actually healthier: Medicare spends about $1,000 less per year on them compared to those who applied at 49.
The 50-year-old applicants are also more sensitive to a sluggish job market: for every percentage point rise in unemployment, the increase in new beneficiaries who’d applied at 50 was about five times more than it was for the 49-year-olds. …Learn More
December 2, 2021
Disability Overpayments Discourage Work
About one in five people on federal disability has some type of job, but the government limits how much they can earn without jeopardizing their cash benefits.
The Social Security Administration wants disability beneficiaries to hold down a job if they can. But when they earn more than the allowed limit in a given month – $1,310 in 2021 – the government sometimes ends up overpaying them for benefits that should’ve been withheld that month. This usually occurs because workers forget to notify the agency they had started a job or fail to provide their earnings information in a timely way.
When the mistake is discovered, Social Security sends a notice asking that the overpaid benefits be returned in the form of a cash payment or a reduction in future disability checks. But the repayments, which usually span several months, are a lot of money – around $9,000 – for a financially vulnerable population.
The problem, according to a Mathematica study forthcoming in the journal Contemporary Economic Policy, is that some people, soon after receiving a notice, reduce their hours or stop working altogether. One beneficiary described the repayment requests as a “penalty for working.”
In an analysis of an SSA database that tracks overpayments, the researchers examined the impact of the notices on working disability recipients who received them between 2007 and 2014. Six months prior to receiving a notice, 58 percent were employed and earning over the limit.
This employment rate declined gradually each month, presumably due to natural attrition. But the researchers find that the drop in the rate accelerated in the month they received the overpayment notice and in the following month, falling by 8 percent over that two-month period. About half of that decline was a response to the notices.
Leaving a job conflicts with Social Security’s goal of encouraging beneficiaries to maintain at least part-time work and improve their overall well-being – and if they have a milder disability, eventually return to the labor force full-time and end their reliance on benefits. …Learn More
November 18, 2021
The Economy, Minimum Wage, and Disability
The federal minimum wage is $7.25 an hour and hasn’t budged since 2009. But many states and some municipalities have raised their minimum wages. Today, more than half of the state minimums exceed the federal minimum.
Now a new trend has emerged: 19 states have enacted or approved automatic yearly increases in their minimum wages to protect their residents from inflation. These adjustments just went into effect this year in Arizona, Colorado, Maine, and Washington D.C.
How might higher minimum wages affect applications for disability insurance? On the one hand, the higher pay could prevent some people with mild disabilities from resorting to the fallback option: applying for disability benefits. But if small employers lay people off to cut costs or feel they can’t afford to hire workers at the new higher minimum wage, applications could go up. Facing fewer job opportunities, more low-wage workers might apply for benefits from a program that currently covers some 16 million Americans.
A new study finds that a rising minimum wage does, indeed, increase disability applications to the U.S. Social Security Administration. But the researchers stress that this impact is minimal compared with the increase driven by an economic downturn that throws more people out of work.
In their analysis of nearly 3,000 counties from 2000 through 2015, a one-dollar increase in the minimum wage added some 80,000 more applications to the disability program and its companion, the Supplemental Security Income program for the poor, elderly, and adults with disabilities. That represents a 2 percent increase.
Contrast that to the impact of a rising unemployment rate, which was about three times larger. …Learn More
August 17, 2021
Disability Discrimination and Aging Workers
A unique situation faces older workers with a disability: apply for federal disability insurance now or try to hold on and keep working to retirement age.
Of course, people who leave the labor force and apply for disability are taking a risk: they might be denied the benefits. But another possible factor in how these situations play out are state anti-discrimination laws to protect people with disabilities, including older workers, from employment discrimination. If these laws can reduce discrimination, could they increase employment and eliminate the need for some older workers to apply for disability?
A new study suggests that state anti-discrimination laws have prevented some disability applications – if the laws are broad enough to provide better protection to workers with disabilities.
The state laws deemed to be broader set a lower burden for proving that the individual has a disability than the standard in the federal Americans with Disabilities Act (ADA). Under the ADA, individuals must prove that their condition “substantially” impacts their ability to function. Under this high burden of proof, many individuals with disabilities were not considered disabled under the ADA and did not receive the federal legal protections from discrimination.
The researchers analyzed whether the broader state laws limited the growth in disability applications between 1992 and 2013 by making it easier for workers at or near retirement age to remain employed.
Disability applications increased during that period for a range of reasons, from the Great Recession to a long-term deterioration in older workers’ health. But the basis for this new study was an increase in disability applications tied to a 1983 reform to Social Security. The reform reduced retirement benefits by raising the program’s full retirement age. Disability checks, which were not reduced, became more attractive to older workers relative to their retirement benefits.
But the researchers found that disability applications did not increase as much – and sometimes not at all – in the states with the broadest disability discrimination laws. The laws were especially effective in reducing applications by people getting close to retirement age. …Learn More
July 27, 2021
Opioid Use Higher for Disability Applicants
With the nation still in the midst of an opioid crisis, a new study provides the first estimate of opioid use among people who apply for disability.
One out of every four applicants used opioids in 2017 – below the peak in 2012 but still significantly more than in the general population, according to researchers at Mathematica and the U.S. Social Security Administration.
And the researchers may be underestimating the extent of opioid use. Their data come from Social Security’s disability application forms. The forms ask applicants to list their prescriptions, including opioids taken for musculoskeletal pain such as a bad back, as well as their non-prescription drug use, and the stigma around use and abuse may encourage underreporting.
To estimate opioid use required creating a database because none existed. The researchers mined the text fields in each disability application using machine learning to find information about opioid use and then entered the information into the database.
Some interesting demographic trends emerged from the study. Opioid use is most prevalent in middle age, at around 30 percent of disability applicants in their 40s and 50s. “This is notable,” the researchers said, because if Social Security grants their requests for benefits, they “may remain on the [disability rolls] for 25 years.”
In a breakdown by education levels, the biggest opioid users had attended college but didn’t get a degree. Women’s use exceeded men’s throughout the study’s 10-year period, mirroring the population as a whole. And a state-by-state breakdown shows that applicants’ opioid use fell across the nation during that time. But Alabama, Arkansas, Michigan, and Nevada still had particularly high rates in 2017. …Learn More
July 22, 2021
Retirement Researchers to Meet Aug. 5-6
The pandemic will be on the marquee at this year’s annual meeting of retirement and disability researchers.
COVID-19 has encroached on every aspect of older Americans’ lives, from their day-to-day work and home life to their retirement planning. Researchers will present studies on three impacts of the pandemic in presentations funded by the U.S. Social Security Administration.
The event will be held over two days, Thursday and Friday, Aug. 5 and 6, from noon to 4 p.m. The event will be virtual again this year and anyone can sign up to attend for free.
The first study on the agenda will explore the pandemic’s impact on older workers’ ability or willingness to work and on their retirement decisions. And for the adults who lost their jobs during COVID-19’s economic downturn, a second study will explain whether the slump will affect their future Social Security benefits. In the final study relating to the pandemic, researchers will assess whether the relief bills passed by Congress helped older people.
Other prominent topics of discussion include retirement planning and retirees’ financial security. These will include new findings on workers’ decisions about saving, retirees’ decisions about spending, and the financial adjustments couples make after their children leave home.
The final major topic is federal benefits for people with disabilities. The presentations here include the relationship between the benefits and two government programs: food stamps and workers compensation insurance.
Summaries of the working papers will be posted online for the meetings. …Learn More
July 6, 2021
Hard for People on SSDI to Resume Work
The federal government runs numerous small-scale experiments across the country to explore ways to help people on Social Security disability ease back into work to reduce the benefits being paid.
In a recent webinar, researchers discussed the extreme challenges of designing programs that are effective, given the inherent disadvantages – from the disabling condition itself and discrimination to having less education – that people with disabilities face in the job market.
After close examination of several programs, the researchers found that the primary goals of most demonstration programs are very difficult to achieve: reducing disability benefits or increasing the earnings of people on disability who have sporadic or part-time work. But they also suggested that the programs would be deemed more successful if policymakers would broaden the goals to include the improved well-being of people with disabilities.
To increase their employment, Kilolo Kijakazi, deputy commissioner of retirement and disability policy at the U.S. Social Security Administration, said it’s critical to first address inequities in the job market.
Research shows that many people on disability express an interest in working but face multiple barriers. Employers aren’t always willing to make the workplace accommodations needed to hire them. People on disability also tend to be older than most workers and may face age discrimination. Others have been discouraged by past work experiences, and finding transportation to and from a job is often a challenge.
Although a minority of all Americans with disabilities are working, the 2020 unemployment rate among people with a disability who are either working or looking for a job was 12.6 percent. However, unemployment among Black Americans with disabilities was 16.3 percent. The rates were also very high for Asian-Americans and Latinos with disabilities – 15.7% and 16.8 percent, respectively.
“We need to develop policies and programs that address these inequities,” Kijakazi said.
Robert Moffitt at Johns Hopkins University analyzed several back-to-work programs, including the use of counselors and financial incentives. He found that the programs are extremely difficult to implement well and that participation is fairly low.
Although they do help some individuals, he concluded, “Most of the efforts to increase employment, earnings and labor force engagement of [disability] beneficiaries have been disappointing.” …Learn More