[Iabs-talk] SSDI

[Connie Davis]

WASHINGTON (AP) - Laid-off workers and aging baby boomers are flooding
Social Security's disability program with benefit claims, pushing the
financially strapped system toward the brink of insolvency.
Applications are up nearly 50 percent over a decade ago as people with
disabilities lose their jobs and can't find new ones in an economy that has
shed nearly 7 million jobs.
The stampede for benefits is adding to a growing backlog of applicants -
many wait two years or more before their cases are resolved - and worsening
the financial problems of a program that's been running in the red for
years.
New congressional estimates say the trust fund that supports Social Security
disability will run out of money by 2017, leaving the program unable to pay
full benefits, unless Congress acts. About two decades later, Social
Security's much larger retirement fund is projected to run dry, too, leaving
it unable to pay full benefits as well.
Much of the focus in Washington has been on fixing Social Security's
retirement system. Proposals range from raising the retirement age to
means-testing benefits for wealthy retirees. But the disability system is in
much worse shape and its problems defy easy solutions.
The trustees who oversee Social Security are urging Congress to shore up the
disability system by reallocating money from the retirement program, just as
lawmakers did in 1994. If Congress does not act, the disability program will
collect only enough payroll taxes to pay about 85 percent of benefits after
the trust fund is exhausted in 2017.
Even if Congress does act, the combined retirement and disability trust
funds are projected to run out of money in 2036, the trustees say. The new
congressional report estimates the combined fund would run out of money in
2038. At that point, the combined programs would collect enough in payroll
taxes to pay about three-fourths of benefits.
Claims for disability benefits typically increase in a bad economy because
many disabled people get laid off and can't find a new job. This year, about
3.3 million people are expected to apply for federal disability benefits.
That's 700,000 more than in 2008 and 1 million more than a decade ago.
"It's primarily economic desperation," Social Security Commissioner Michael
Astrue said in an interview. "People on the margins who get bad news in
terms of a layoff and have no other place to go and they take a shot at
disability,"
The disability program is also being hit by an aging population - disability
rates rise as people get older - as well as a system that encourages people
to apply for more generous disability benefits rather than waiting until
they qualify for retirement.
Retirees can get full Social Security benefits at age 66, a threshold
gradually rising to 67. Early retirees can get reduced benefits at 62.
However, if you qualify for disability, you can get full benefits, based on
your work history, even before 62.
Also, people who qualify for Social Security disability automatically get
Medicare after two years, even if they are younger than 65, the age when
other retirees qualify for the government-run health insurance program.
Congress tried to rein in the disability program in the late 1970s by making
it tougher to qualify. The number of people receiving benefits declined for
a few years, even during a recession in the early 1980s. Congress, however,
reversed course and loosened the criteria, and the rolls were growing again
by 1984.
The disability program "got into trouble first because of liberalization of
eligibility standards in the 1980s," said Charles Blahous, one of the public
trustees who oversee Social Security. "Then it got another shove into bigger
trouble during the recent recession."
Today, about 13.6 million people receive disability benefits through Social
Security or Supplemental Security Income. Social Security is for people with
substantial work histories, and monthly disability payments average $927.
Supplemental Security Income does not require a work history but it has
strict limits on income and assets. Monthly SSI payments average $500.
As policymakers work to improve the disability system, they are faced with
two major issues: Legitimate applicants often have to wait years to get
benefits while many others get payments they don't deserve.
Last year, Social Security detected $1.4 billion in overpayments to
disability beneficiaries, mostly to people who got jobs and no longer
qualified, according to a recent report by the Government Accountability
Office, the investigative arm of Congress.
Congress is targeting overpayments.
The deficit reduction package enacted this month would allow Congress to
boost Social Security's budget by about $4 billion over the next decade to
invest in programs that identify people who no longer qualify for disability
benefits. The Congressional Budget Office estimates that increased
enforcement would save nearly $12 billion over the next decade.
At the same time, the application process can be a nightmare for legitimate
applicants. About two-thirds of initial applications are rejected. Most of
these people drop their claims, but for those willing go through an appeals
process that can take two years or more, chances are good they eventually
will get benefits.
Astrue has pledged to reduce processing times for applicants' appeals, and
he has had some success, even as the number of claims skyrockets. The number
of people waiting for decisions has increased, but their wait times are
going down.
"It's ludicrous to say that the backlog problem is getting worse," Astrue
said. "The backlog problem has gotten dramatically better."
Patricia L. Foster said she was working as a nurse in a hospital in
Columbia, S.C., in 2005 when she was attacked by a patient who was suffering
from a mental illness. Foster, 64, said she injured her neck so bad she had
a plate inserted. She said she also suffers from post-traumatic stress
disorder.
Foster was turned down twice for Social Security disability benefits before
finally getting them in 2009, after hiring an Illinois-based company,
Allsup, to represent her. She said she was awarded retroactive benefits,
though the process was demeaning.
"I have to tell you, when you're told you cannot return to nursing because
of your disability, you don't know how long I cried about that," Foster
said. "And then Social Security says, 'Oh no, you don't qualify.' You don't
know what that does to you emotionally. You have no idea."
___
Online:
Federal disability programs: www.ssa.gov/disability/
Congressional Budget Office projections: www.cbo.gov/doc.cfm?index=12375
Government Accountability Office report: www.gao.gov/products/GAO-11-724