Social Security Disability Applicants: Have No Fear, The System is Not Going Under
According to Chicken Little, the sky was always falling. Some observers of the Social Security Disability (SSDI) system seem to have a similar belief – that the SSDI system is “broke” and there won’t be enough money to pay all of the people entitled to benefits. In fact, an article in the July 2, 2015 issue of Business Week suggested that “the disability program needs help itself.”
While the SSDI system isn’t perfect, it’s not broke – or broken, and persons who need and are entitled to these benefits should file their applications. First, what is SSDI? The disability program provides monthly benefits to workers who can no longer work because of a significant illness or impairment expected to last at least one year or result in death within one year. And what most people don’t know is that part of the money deducted from their paychecks goes into the disability fund to protect them if their health worsens.
It is important to understand first, before pointing fingers, that when the economy goes down, disability claims go up. Since 1989 the SSDI system has more than doubled the number of enrollees between the ages of 25 to 64. This increase reflects the fact that as the economy worsens, it becomes harder for workers with medical problems to get or maintain jobs. It also reflects the fact that baby boomers are starting to feel the impact of years of work. Consequently, the SSDI is literally the “backbone” for workers affected by mental illness and back pain, in addition to those with heart disease, cancer and other disabling conditions.
What this means is not that the SSDI system is crumbling or that it is granting benefits to unworthy beneficiaries; rather, it means that the system adapts to the definition of what it means to be “disabled” in the workforce. While some, such as Stanford economist Mark Duggan, who is quoted in the Business Week article, claim that “SSDI absorbs people who might otherwise work when economic conditions approve,” that ignores the many programs, such as trial work periods, designed to encourage beneficiaries to return to the workforce. Duggan’s statement also ignores the reality economic conditions directly affect a person’s mental health. After all, a worker who had worked for the same company for 30 years and suddenly could no longer work because of COPD, is likely to become clinically depressed when she realizes that her job – an important part of her identity – is gone, and she is now homebound.
Economists who point their fingers at the SSDI system for accepting unfit candidates or discouraging work, focus more on the economic cost of the SSDI program and ignore its effectiveness and importance to so many people. To those workers, who never purchased disability insurance or never received it as an employee benefit, SSDI is the only thing prevents them from becoming homeless.
SSDI is not a “busted system,” and it will continue to help people with disability claims as it has in the past. Although the program is costly, Congress will almost certainly act – as it did the last time SSDI faced a monetary crisis – and “divert a portion of Social Security’s payroll tax revenues to SDDI to avoid cuts in benefits,” as the article notes. This will allow the system to provide benefits to those with SSDI claims for at least 17 more years, and prevent the system from going under, contrary to the eager predictions of some economists. In short, the Social Security Disability system is not going under, and future claimants have nothing to fear.
