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Disability Benefits hits high in December 2012

Disability benefits continue to rise

According to the Social Security Administration (SSA) disability benefits hit a record high in December with an estimated 8,827,795 workers collecting disability, up from an estimated 8,805,353 in November.

What does this mean for the future of the Social Security program? Right now the SSA is running a deficit of a $47.8 billion, which means of the $725.429 billion in cash that the program gathered from employment taxes, they paid out an estimated $773.247 for benefits and overhead expenses. 2009 is the last year that the Social Security Trust Fund has had a net cash flow surplus; the last two years they have had deficits.

The SSA will, however, report an increase this year because the United States Treasury paid back interest for some of the money they had drained from the Social Security Trust Fund in prior years to cover the Federal GovernmentÂ’s deficit spending.

What is also alarming is the number of beneficiaries receiving benefits. If a new worker qualifies for Social Security Disability Insurance often they have dependents or spouses that may also qualify. The number of beneficiaries also hit a record in December, climbing from 56,658,978 in November to 56,758,185 in December.

Unbelievably, this means that for every 1.67 American working in the private sector there is one person collecting disability benefits from the Social Security Administration.

Why have the disability benefits rolls increased?

There are several reasons the disability rolls have increased. One factor could be the increase in population. All factors remaining the same one would expect for the number of disability applicants to rise as the population increases. Additionally, one would also expect the number of disability participants to rise as the population ages.

Another common factor for the increase in the disability program is changes in the eligibility rules for the program, which have widened over the years (for example, increases in the full retirement age result in disabled workers staying in the Disability Insurance program longer).

One of the most interesting factors could be the decrease in the health of the general population, for example, the increased prevalence of obesity. While obesity in itself is not a disabling condition it is safe to argue that as the population becomes heavier we have seen an increase in other disabling conditions such as heart disease and diabetes which lower a claimantÂ’s ability to work.

It may also be true that the methods and standards for determining disability by the SSA have been lowered over the years, allowing more claimants to enter the disability program. Finally, technology has allowed more people to become aware of the opportunity for disability and to find legal help with a disability lawyer.

What needs to be considered in the following years? Our representatives need to review the sustainability of a program that needs more workers to survive. With the baby boomers entering retirement and the young failing to have enough children to replace the current population, the disability program, like all government entitlement programs, may face a very dim future.

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