Articles Posted in economic trends

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Expansion of the Social Security disability program continues in the news. Every week it seems some headline decries the number of beneficiaries added to the Social Security disability rolls. In fairness, and as I have previously blogged in earlier entries, the number of individuals receiving disability payments is on the rise. Moreover, it is also true that actuarial accounts indicate that the payment system will exhaust its surplus in about twenty years, or less given some projections. The Disability Insurance Trust Fund is set to run out in 2018. Seventy-five percent of claims can be paid with current payroll contributions after that set period.

Opponents of the current system complain that expanded legislation has made this program a secondary unemployment insurance program and a boom for lawyers. The implication, if not the downright complaint, is that the system approves too many unwarranted claims. There is currently a serious “drumbeat to demonize disability claimants” as former Administrative Law Judge Lloyd King exclaimed

Still, figures show that more than 80% of administrative law judges approve about half of the claims brought into their tribunal. The percentage number of claims approved overall has actually fallen. Still, with baby boomers reaching age 50 and more women having earnings credits to qualify for disability, and with states pushing unemployment recipients to apply for federal benefits, the number of applications is continually growing. Even with controls in place to cut down on excessively generous awards, claim benefits are on the rise.
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Reform measures have included doing away with the administrative law judge review; tougher review of applicants; and cutting program benefits.

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Much has been made recently in the news of a spike in the number of Social Security Disability claims. Last month, Social Security reported that the number of individuals receiving disability payments totaled 8,733,461. Many news organizations cried that this is higher than the entire population of New York City. However, this number also reflects the aging Baby Boomer population who are approaching their fifties, an age when chronic medical conditions do remove workers from the workforce.

Still, economists point to a correlation between an applicant’s unemployment payments running out and the initial application for disability. The Wall Street Journal reported this in December 2011.

In previous posts and as reported by Social Security, there is a rise in applicants when there is a downturn in the economy. For many reasons, there are fewer jobs available and those with medical disabilities are at a greater disadvantage and less able to find work that can accommodate disabilities.

Others see the rise as proof that many disability claims are made by those more affected by their unemployment, than their disability. What is missing in the data is whether those additional applicants for Social Security disability are eventually awarded benefits as their applications go through the system. At the administrative law judge review phase, approximately fifty to sixty percent of appeals result in a favorable ruling. Administrative law judges may take into account the difficulty in finding a job in the national economy.

In Georgia, the percentage of the population that receives disability benefits is 4.4%. The national average is 4.5%. The federal disability program is designed to help people who can no longer work. Recipients receive a monthly stipend that averages around $1000 a month. Recipients also have access to healthcare through Medicaid or Medicare.
A combination of an aging population and a bad economy is driving the increase in disability claims. In previous posts, I have reported on whether the system can continue to fund additional claims (it can). That disability claims rise during economic hard times is not indicative necessarily of a broken system. Rather, social security disability is meant to be a social safety net for those who cannot work due to a disabling condition. Even assuming more unemployed, but not necessarily disabled individuals, will apply for social security disability benefits, it does not necessarily mean those claims will be successful. For the most part, individuals with legitimate disability claims must make their way through a difficult and onerous process of denials and appeals before being awarded benefits.

For assistance in your social security disability claim, contact our office for a free consultation