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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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.