Social Security Disability running out of money … is there any wonder?

It is all over the news, the Social Security Disability Trust Fund is going broke.  Here are the numbers:

At the end of 2009 the Disability Insurance (DI) fund had $203.5 billion in assets.  It received $104 billion in income (taxes, interest) in 2010 and paid out $127.7 billion in benefits.  Which means that at the end of 2010 the fund assets had decreased by $23.6 billion for a total of $179.9 billion.  In other words, this fund is bleeding cash and unlike the Old Age Survivor Income portion of the Social Security Trust (OASI) its payments exceed both the payroll taxes and interest paid on the Trust’s bonds issued by the Treasury Department.  In fact, according to the most recent Trustees report, the DI trust fund will be entirely exhausted on 2018.

Social Security disability has a rather strict definition for eligibility but that does not stop people from applying for benefits and it does not stop a cadre of lawyers from helping people get those benefits.  There are almost as many of these ads on television as those trying to get you to sue drug companies.

Disability claims tend to rise during poor economic times, not because more people are truly disabled but because they are laid off from their jobs and see Social Security disability as a ready source of income.  If you are able to work today, you are not eligible for disability benefits.  If you are laid off from your job tomorrow, it is hard to see how you suddenly become disabled especially when that disability is supposed to last at least one year or to result in death. 

Nevertheless, human nature being what it is that pot of government goal is a tempting target.  In addition, the system provides additional incentives to game the system.  If you are laid off and near retirement age you cannot receive you full Social Security until age 66 or later.  However, if you receive disability benefits there is no age restriction on full benefits. Why wouldn’t people take a shot at receiving disability benefits especially when they are frequently encouraged to do so?

This is the fundamental problem with entitlement programs, we think we are entitled to these programs “paid for by the government,” but of course they are paid for by American tax payers.  Every time a new program is created some segment of society will see that as their gift from government and will seek their share of the pie in any way possible thereby making it that much more difficult to provide assistance to the truly needy and deserving.  It is not hard to see how this mentality can develop under a constant barrage of political rhetoric designed to make the electorate beholding to their elected officials.. These are not benefits earned, you pay taxes as you would pay insurance premiums to protect you in the event of an unforeseen catastrophe recognizing that the great majority of people will not see any benefit from their premiums and hopefully would rather not.  In short, many people are committing fraud in their quest for an “entitlement.”

In the 1970s Congress tightened up on the criteria for disability benefits making it tougher to qualify.  However, in typical political fashion it subsequently loosened the criteria, and the rolls began growing again. 

You would think that it is totally inconsistent to think you can collect unemployment benefits while receiving disability benefits or even while your claim is pending; that’s not entirely true.  There is no direct link between unemployment and Social Security although your claim could be in question if you say you can both work and not work at the same time. However, that does not keep many people from trying and if they don’t get caught, hey it’s more free money.  In fact, some lawyers will advise their clients to state that the onset of the supposed disability is just after unemployment benefits expire.  Here is a website that talks about the issue.

Here is what the Social Security website says about qualifying for disability benefits:

The definition of disability under Social Security is different than other programs. Social Security pays only for total disability. No benefits are payable for partial disability or for short-term disability.

“Disability” under Social Security is based on your inability to work. We consider you disabled under Social Security rules if:

• You cannot do work that you did before;
• We decide that you cannot adjust to other work because of your medical condition(s); and
• Your disability has lasted or is expected to last for at least one year or to result in death.

This is a strict definition of disability. Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings and investments.

To decide whether you are disabled, we use a step-by-step process involving five questions. They are:

1. Are you working?

If you are working in 2011 and your earnings average more than $1,000 a month, you generally cannot be considered disabled.

If you are not working, we go to Step 2.

2. Is your condition “severe”?

Your condition must interfere with basic work-related activities for your claim to be considered. If it does not, we will find that you are not disabled. If your condition does interfere with basic work-related activities, we go to Step 3.

3. Is your condition found in the list of disabling conditions?

For each of the major body systems, we maintain a list of medical conditions that are so severe they automatically mean that you are disabled. If your condition is not on the list, we have to decide if it is of equal severity to a medical condition that is on the list. If it is, we will find that you are disabled. If it is not, we then go to Step 4.

Note: We have two initiatives designed to expedite our processing of new disability claims:

• Compassionate Allowances: Certain cases that usually qualify for disability can be allowed as soon as the diagnosis is confirmed. Examples include acute leukemia, Lou Gehrig’s disease (ALS) and pancreatic cancer.
• Quick Disability Determinations: We use sophisticated computer screening to identify cases with a high probability of allowance

For more information about changes to our disability claims process, visit our Disability Service Improvement website.

4. Can you do the work you did previously?

If your condition is severe but not at the same or equal level of severity as a medical condition on the list, then we must determine if it interferes with your ability to do the work you did previously. If it does not, your claim will be denied. If it does, we proceed to Step 5.

Additional information about Step 4.

5. Can you do any other type of work?

If you cannot do the work you did in the past, we see if you are able to adjust to other work. We consider your medical conditions and your age, education, past work experience and any transferable skills you may have. If you cannot adjust to other work, your claim will be approved. If you can adjust to other work, your claim will be denied

Social Security pays benefits to people who cannot work because they have a medical condition that is expected to last at least one year or result in death. Federal law requires this very strict definition of disability. While some programs give money to people with partial disability or short-term disability, Social Security does not.

Related articles

• GETTING OUT OF THE RED The crisis in disability insurance (tech.mit.edu)
• Social Security Disability Benefits: Disability Group Exposes the Myths About the Social Security Claims Process (prweb.com)