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