SOCIAL SECURITY DISABILITY INSURANCE: A VITAL LIFELINE FOR PEOPLE WITH DISABILITIES

HDadvocates HealthAndDisability

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LISA D. EKMAN, JD, MSWFEDERAL POLICY DIRECTORLEKMAN@HDADVOCATES.ORG

WHY IS SSDI IMPORTANT?

• SSDI benefits provide access to health care and long-term services and supports

• They lift many people with disabilities and their family members out of poverty

• For many, benefits earned are the only thing keeping them from homelessness and destitute poverty

SSDI BENEFICIARY CHARACTERISTICS

SSDI beneficiaries are a diverse group, including people with

• Heart disease• End stage renal failure• Significant intellectual

disabilities• Severe mental illness• Severe physical

disabilities

• Advanced stage cancers• Debilitating arthritis • Deafness• Blindness

SSDI BENEFICIARY CHARACTERISTICS

Some are terminally ill • About 1 in 5 male SSDI beneficiaries and just under

1 in 6 female SSDI beneficiaries die within first five years of receiving benefits

Tend to be older • About 7 in 10 are over 50 • Approximately 3 in 10 are over 60

Low educational attainment • 42% did not finish high school • 35.3% have high school diploma or equivalent

SSDI beneficiaries should be given every support, service

and encouragement to work, but available data show that a

large percentage will never have the capacity for

ongoing work at a significant level.

CAN A SIGNIFICANT PERCENTAGE WORK AND BECOME SELF-SUPPORTING?

Kathy Ruffing, Social Security Disability Insurance is Vital to Workers With Severe Impairments, Center on Budget and Policy Priorities, August 9, 2012. http://www.cbpp.org/cms/index.cfm?fa=view&id=3818

REJECTED APPLICANTS DON’T FARE WELL

Barely half have any earnings

53% of rejected male applicants age 45 to 64 (vs. about 20% of accepted applicants) had any earnings two years after application. Compare to 82% of a control group of non-applicants (with similar demographic characteristics and past work history) who had earnings.

Two years after application, 43% of rejected applicants had earnings equivalent to 3 months out of the year at minimum wage

In contrast, 79% of non-applicants had at least that level of earnings.

For those with earnings, median amounts are quite low

Among rejected applicants who worked, median annual earnings (in 2000 dollars) were only $10,000, just slightly above the poverty line. Compare to median earnings of $35,000 among non-applicants.

SSDI IS NOT A WORK DISINCENTIVE

• Just over 8 in 10 report biggest barrier to employment was their own disability (80.5 percent)

• More than 9 in 10 people surveyed indicated receipt of public income support benefits had NO effect on their work activity

• In fact, 92.5 percent of those who received financial assistance within the past year reported that “the program(s) they used did not cause them to work less than they otherwise would have.”

United States Department of Labor, Bureau of Labor Statistics, News Release, PERSONS WITH A DISABILITY: BARRIERS TO EMPLOYMENT,TYPES OF ASSISTANCE, AND OTHER LABOR-RELATED ISSUES —MAY 2012,” April 24, 2013; available at http://bls.gov/news.release/pdf/dissup.pdf

• START YEARS BEFORE APPLICATION FOR BENEFITS

• EARNINGS DETERIORATE SEVERAL YEARS BEFORE APPLICATION

NEED FOR EARLY INTERVENTION

SUSTAINABILITY AND AFFORDABILITY

A MATTER OF PRIORITIES• Americans support Social Security and don’t mind

paying for it • Given a choice, they would rather pay more than

see benefits cut• Consortium for Citizens with Disabilities supports

revenue only options • Benefits already modest• Any cuts will cause more hardship and more poverty

SOCIAL SECURITY WHAT AMERICANS WANT

ELIMINATE CAP

Gradually, over 10 years, eliminate cap on earnings taxed for Social Security.

INCREASE TAX RATE

Gradually, over 20 years, raise Social Security tax that workers and employers each pay from 6.2% of earnings to 7.2%. The increase would be so gradual that someone earning $50,000 a year would pay about 50 cents a week more each year.

INCREASE COLA

Increase Social Security’s cost-of-living adjustment (COLA) to more accurately reflect inflation actually experienced by seniors, who typically pay more out-of-pocket for medical care than other households.

RAISE MINIMUM BENEFIT

Raise Social Security’s minimum benefit so that a worker who pays into Social Security for 30 years can retire at 62 or later and have benefits above the federal poverty line ($10,788 for one person aged 65 or older in 2011).

Source: Jasmine V. Tucker, Virginia P. Reno, Thomas N. Bethell, Strengthening Social Security: What Do Americans Want?, National Academy of Social Insurance, January 2013, http://www.nasi.org/research/2013/report-strengthening-social-security-what-do-americans-want

DOES SSDI NEED REFORM?

SSDI is functioning as it should – providing vital wage replacement to millions of people with disabilities and their families who need it.

More must be done to • Help people who acquire disabilities stay at work if they

can;• Provide support and services to SSDI beneficiaries with

work capacity to obtain and maintain employment;

But this is not, and should not be, the role of SSDI program

PRINCIPLES FOR REFORM

Any reform should preserve the structure of the SSDI program, including the definition of disability

Efforts to increase employment opportunities and improve employment outcomes for Social Security disability beneficiaries should not be achieved through

• Any tightening of eligibility criteria for cash benefits • Narrowing of health care benefits • Removing the entitlement to benefits, OR• Devolving responsibility to the states

MORE PRINCIPLES FOR REFORM

SSDI benefit receipt should not be time limited

Work activities and work preparation activities, should be voluntary for SSDI beneficiaries

Social Security Administration should be given adequate administrative resources to

• Perform disability determinations in a timely manner • Perform program integrity functions

- Continuing disability reviews - Prevent overpayments

It started with a safety net. Founded in 1992 to educate stakeholders about the key role Social Security, Medicare and Medicaid play in the lives of persons with disabilities and older adults, today we advance health and economic security, especially for vulnerable populations.

HEALTH & DISABILITY ADVOCATES