Disability payments are on an unsustainable path

Nearly 9 million Americans now collect. While workers are older and sicker, that's not the whole picture.

By Aimee Picchi Jun 25, 2013 1:02PM

Senior man in wheelchair looking out window (© Tetra Images/Getty Images)By one count, America could lay claim to a new moniker: the land of the disabled. 

That's because more than 8.8 million workers received disability benefits last year, almost three times the 2.9 million people who received the payments in 1980. 

While Americans are growing older and sicker, that doesn't entirely explain the surge in workers receiving disability insurance, according to a report released Monday by the Federal Reserve Bank of San Francisco.

At the heart of the issue is a sobering equation: The Social Security disability trust fund is on track to run out of money by 2016. The program cost the government $136 billion last year, up from $15 billion in 1980. Unfortunately, the Fed report notes, the Social Security Administration may be underestimating future growth of disability claims, making the situation even more dire. 

Only 40% to 60% of the rise can be tied to population growth, aging or changing demographics, such as more women joining the workforce and qualifying for the insurance, the study found. But that leaves a "significant faction of growth" unexplained. 

The Fed has a few ideas about what's behind the rest of the surge. One culprit could be the more "subjective" guidelines that are used to judge whether a worker qualifies for the payments. In 1984, Congress expanded the criteria, allowing vague conditions such as "pain." Before that, the definition was limited to severe illnesses such as cancer and heart disease, as NPR noted in March. 

A second reason is what the San Francisco Fed calls a perfect storm of "rising income inequality" and wage stagnation for the less-skilled, making disability more attractive to low-income workers. The average disability payment was $1,130 in January, according to a March report from the Congressional Budget Office. 

It's not clear how the trend affects the nation's biggest employers, such as Wal-Mart (WMT), but the jump in people collecting disability means those workers aren't showing up in the unemployment rate. 

The bottom line? The Fed report notes, "Curbing this growth is important for putting the program back on a sustainable fiscal path."

Follow Aimee Picchi on Twitter at @aimeepicchi

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Jun 25, 2013 1:24PM
The whole system is jacked up.  40 years ago, if you hurt your back, you went out and found a different, less strenuous job that you could do.  Nowadays, if you've been driving a truck for a couple of years and you claim a back injury, you can get paid $1200/month for the rest of your life.  Then your fat-a$$ wife can claim obesity as her disability and she gets $1200/month too.  Then you get $500/month in food stamps, $500/month in a housing allowance thanks to Section 8, free medical care for life thanks to medicaid.  You get a free Obama phone and your kids eat free breakfast and lunch at the  free gov school.  And in some areas, your kids get free iPads or laptops and you get free internet service.

So let's see, you could actually work for a living and make $70k/year combined and have to pay for everything, or you could not work at all, make $30k/yr and not have to pay for much.  Or better yet, since no one cares anyway, you could go get a job that pays cash under the table and collect on both ends. 
Jun 25, 2013 1:21PM
It seems that laziness is now considered a disability.
Jun 25, 2013 1:18PM
The short of it. More people are lying sacks of s hit.
Jun 25, 2013 1:37PM

We all know what has happened.  When layoffs were threatened during the great recession, a lot of people suddenly discovered they were disabled.  And as the article states, this lowers the participation rate and artificially lowers the unemployment rate.


I guess it is all time we take a page from Homer Simpson, who discovered being morbidly obese was considered a disability and set about to eat his way to retirement.

Jun 25, 2013 2:31PM

You do not have to be disabled in fact to collect disability, you only have to be disabled on paper.


If the paperwork is filled out the “right” way and your doctor, or lawyer uses the proper keywords you will get approved, your actual physical condition is not really relevant.

Jun 25, 2013 1:47PM
Another joke of a reason is "Mental Health" being a reason not to work. If a person is depressed or bipolar they can be considered eligible for disability insurance. It makes me angry!  Hmmm is angry a disability; no, not yet.
Jun 25, 2013 3:09PM
There are certainly many who are on disability legitimately but many who are not.  I know one fellow, that had a genuine back problem, who went on disability.  I don't know whether his back has improved but he is now on disability permanently... and he makes more now than he ever did while working, even though he had a good job in warehousing and had 20+ yrs with the same company, so was making pretty good money.  To me it doesn't make sense that he makes more on disability than he did when working. 

Watch "Idiocracy." The movie is becoming more real every day right in front of us. Mike Judge is a genius.

Jun 25, 2013 2:16PM
It's pretty simple, the current socialist regime is destroying the incentives to work for a living and increasing the incentives to vote for a living.

The workers/tax payers are carrying an increasing burden and getting less for the little of their own money they are actually able to keep. On one side the see the rich becoming mega-rich and on the other side they see illegal immigrant families that can't speak English, have minimum wage jobs at best, yet have 5 kids that they absolutely cannot afford.

Jun 25, 2013 3:40PM
By definition one cannot have a disability without having an impairment (an objective bodily finding) Therefore pain is not a disability in and of itself. within the private insurance industry.   You get enough people relying on entitlements and if you can drive their lazy asses to to voting booths, well what do ya think will happen? 
Jun 26, 2013 12:28PM
Mt31...you are a lone voice of reason...you actually work there and have given reasoned responses to all the rants on here.  Keep it up, some of us are listening instead of ranting about a "friend, neigbor, cousin's sister's husband, etc. etc."  All the thumbs-downers don't want to hear you.  They just want to rant.
Jun 26, 2013 1:57AM
What is the point anymore. Give disability for people who have nothing wrong except for the fact they are lazy and were able to B.S. their way into a monthly check. Nothing shows up on X-Rays or MRI scans but they still claim too disabled to work because of their back, mental issues oh and my all time favorite "Migraines". That one is popular because their is no test to prove that you do or don't get them. They just have to take your word and we all know how honest they are. Let us also not forget all the money spent to take care of illegal aliens such as welfare, foodstamps, housing, medical and every thing else they can squeeze out of the American Citizens. In a way I can't blame some of these so-called disabled folks from milking the system because if you don't do it it will just be given away to all those illegals who are swarming the country now.
George W. Bush, had a great idea that he suggested, what to do with these disabled. Make them work as telemarketers. Just what the country needs 8.8 million more people, ringing your phone, trying to sell you something.
Jun 25, 2013 1:51PM
I worked for disability. The system works fairly well and the rules are pretty well thought out. Unfortunately, the truth of the matter is that a large portion of our population,(the baby boomers are now nearing retirement). Many have physical issues that will not allow them to continue to work. With the downturn in the economy many who were working in jobs that made special allowances for their physical disabilities have been pushed back into the job market and can not compete and therefore they apply and receive disability.

There were things that I seen that could use changing that would help the system immensely. number 1(I know anti-gov people will hate this one) is to fund the department adequately. Pretty much you have to few people doing the job of many for very little. This causes problems in many ways such as high turnover as people leave for better paying jobs. Also this puts an emphasis on incoming cases verse CDR(Continuing disability review) cases. CDR cases are people who are already on disability and need to be reviewed to see if they still meet the criteria.

Unfortunate, there are only a certain number of examiners and it takes a year to train a new one. As a result of people complaining about how long it takes to get their case reviewed for disability, incoming cases are an emphasis. CDR cases that should be reviewed at 1 year or 3 years, end up getting reviewed much later and in many cases people are left on disability that have gotten much better since then and could reenter the workforce. These people are left on disability because of congresses lack of funding of the department and it cost taxpayers big bucks! We could save a bunch of money by funding this department to realistic levels.

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