Social Security Disability swamped by increase of claims
Can Social Security Disability be sustained?
Last year 3.2 million individuals applied for Social Security Disability Insurance or Supplemental Security Income. This is a 25% increase since 2007 and an amount that could eventually push Social Security Disability programs to the brink of insolvency. Whats the primary driver? Many experts claim its the surge in baby boomers, a group of workers who are not old enough to retire but face debilitating conditions which can make it difficult to work.
Other problems include management issues which often lead to overspending. This spring when the Oversight committee in Congress reviewed some of the issues with the disability program they noted that "Federal disability claims are often paid to individuals who are not legally entitled to receive them. The committee also noted that many Social Security Disability claims are not followed up on, which means some people, who were once disabled, may continue to receive disability payments even when they might be able to return to work.
What does the SSA say about Social Security Disability?
The SSA acknowledges there is a 1.3 million overdue follow-up reviews to make sure people still qualify for Social Security Disability benefits, but with limited funds and millions of applications flowing into the system each year, its impossible for the back log to be cleared.
The SSA also argues that even though Social Security Disability examiners are following the strictest standards to award disability benefits- which does not allow benefits to be paid to a worker who is able to perform substantial gainful activity within the year, the shifting demographics will automatically lead to an increase in benefits awarded.
What are the most common types of disabilities?
According to the SSAs latest annual report, the most common Social Security Disability claims were awarded for bone and muscle pain, including lower back pain, and these are exactly the types of claims that we should expect to see for an aging population.
Another common type of disorder is mental disorders. The SSA acknowledges this is the toughest category to diagnose, treat and objectively evaluate.
The Social Security Disability program is unsustainable
What will have to be addressed in the near future is the increased cost of disability benefits. Currently, nearly 11 million disabled workers, spouses and children get Social Security disability benefits. This calculates to an estimated $1,130 per disabled worker. Unfortunately, the increase is an estimated 7.6 million from less than a decade ago. This doesnt count the additional 8.3 million people who get SSI, a separately funded program for low-income individuals.
Officials estimated the Social Security Trust Fund will run out of money as early as 2016. No one is quite sure what will happen then, although experts content the fund will only collect enough in payroll taxes to pay 80 percent of benefits which could trigger an automatic 20 percent cut in benefits. In 1996 Congress was able to put money into disability program that was supposed to pay for retirement benefits, but this causes a shortage in the retirement program and is not a long-term solution to its potential insolvency.