Social Security Disability Running On Empty

https://www.socialsecurity.gov/policy/docs/statcomps/di_asr/2009/chart08.gif


While the attention of Washington and the American people is fixed on the looming insolvency of the nation’s Social Security retirement system, a more serious problem has been overlooked. It turns out that the Social Security Disability (SSD) system is in much worse shape. Even worse, the SSD system’s problems defy easy solutions.
Stephen Ohlemacher reports for the AP, August 21, 2011, that the already financially-strapped SSD program is being pushed toward the brink of insolvency by a flood of new benefit claims. Applications to the SSD program are up nearly 50% from a decade ago — from aging baby boomers and laid-off workers in an economy that has shed nearly 7 million jobs..
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.

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 SSD 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. By 2036, 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.
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% 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.
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.
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.

In December 2008, The Oregonian uncovered potential SSD fraud of $11 billion. Although federal law requires Social Security to periodically evaluate the status of the 7.3 million people who draw checks from its Disability Insurance Trust Fund and the more than 4 million disabled adults who are paid Supplemental Security Income from the U.S. Treasury, the Social Security Administration fell behind in reviewing the medical conditions of 1.7 million Americans on its disability rolls, potentially paying up to $11 billion in benefits to people who were no longer disabled.
We all know somebody who is defrauding SS, SSD, SSI, or other government welfare programs. My husband has a 50-something niece who had NEVER worked a day in her life, having been diagnosed “schizophrenic” when she was but a child. Curiously, her schizophrenia did not prevent her from living a normal life — marrying, giving birth to two children, and divorcing.
The U.S. Office of the Inspector General has a Fraud Hotline for us to report fraud, waste, and abuse within the Social Security Administration’s (SSA) programs and operations:

Internet: Fraud Reporting Form
U.S. Mail: Social Security Fraud Hotline
P.O. Box 17785
Baltimore, Maryland 21235
FAX: 410-597-0118
Telephone: 1-800-269-0271 from 10:00 a.m. to 4:00 p.m. Eastern Standard Time
TTY: 1-866-501-2101 for the deaf or hard of hearing.

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

~Eowyn

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Anonymous
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Anonymous

Attention aspiring SEIU members: No more SSI “crazy checks” for having your kid act like they’ve got ADHD, we can’t afford it.

DCG
Guest

This has got to be addressed by the idiots in DC….
I know someone who works for USPS, was just diagnosed w/terminal cancer. She’s now drawing disability from both USPS and SS. Her daughter will continue to draw her benefits after she passes. Wonder how they’ll pay for that in the future.

Anonymous
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Anonymous

This just in…
“USA Becomes Food Stamp Nation, But is it Sustainable?” by Kristina Cooke, Reuters via Yahoo! News, 22 Aug 2011
https://news.yahoo.com/usa-becomes-food-stamp-nation-sustainable-160645036.html

Lone Wolf
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Lone Wolf

Same old, same old, we have it here too. I recently saw a so called disabled man cycling a bicycle very fast through traffic. they live on frauding the rest of us. And surprise, surprise nothing is ever done about it.

Joan
Editor

Thank you, Eowyn, for this most informative post that discloses the fraud of so many Americans! Shame on them! They have to look at themselves in the mirror every day and just who do they see! Sickening! And their fraud makes it so hard for those individuals who truly are disabled, paid into Social Security who are entitled to some help. I cannot imagine the amount of overpayment liablity on the books! It must be phenomenal! What is so horrible here, is the fact that Social Security funds is suppossed to be a TRUST fund, and look what the government… Read more »

igor
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igor

hasn’t obama’s illegal alien aunt been sucking from the social security admin with a check every month while she squats in the white house? will she move when obama is voted out in 2012? and why is an illegal alien getting money from social security in the first place?

annmadeloni
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I know a woman here in VT. who drives as a volunteer medical transport for a local government agency. The money she receives is a stipend, non-taxable. She’s married with a working husband. After she went into respiratory distress and was hospitalized for less than 48 hours, she immediately applied for disability. Less than 3 months later, without a lawyer, she got her first check, went back to driving and SMOKING. Three years ago, my husband was mutilated during a urethroplasty and sent home 23 hours after the onset of his 8 hour surgery b/c the hospital thought he had… Read more »