Thursday, September 27, 2007

National Center for Policy Analysis says Social Security Disability used as a form of Early Retirement

There is a page on the National Center for Policy Analysis (NCPA) website, titled "Rising U.S. Disability Costs". The page points out the following:

1. Between the years 1985 and 2006, the number of people receiving disability benefits practically doubled, while the number of people receiving retirement benefits only grew by twenty-five percent.

2. Expenditures for disability payments have grown 5 fold, while expenditures for retirements have grown 3 fold.

This is statistical data and you really can't argue with it on its face. However, the assertion that is extrapolated from this data and stated on this page is something I'd like to take issue with and I quote "older workers have an incentive to use disability as a form of early retirement". By older workers, the NCPA seems to mean individuals who are younger than full retirement age, but at least 62 years of age.

This seems to me to be an poorly thought statement and here's why:

1. While a few individuals age 62 and above file for disability benefits with the social security administration, that percentage of the total is very, very small.

2. While individuals who are 55 and older constitute a larger percentage of disability claimants (than claimants who are 62 and older), the percentage of disability claims filed by claimants in this age bracket is still nowhere near the majority. As someone who has worked as a disability examiner for SSA and has also worked in claimant representation, I can say with certainty that the majority of claims involve individuals who are younger than fifty years of age.

Disability lawyers and non-attorney reps would certainly like it to be so if more cases involved claimants who were fifty and older because at age 50, and then again at age 55, the vocational rules become more favorable to a claimant. However, that's not how the age distribution pans out. There is simply not a great flood of individuals age 62 and older who are seeking disability benefits.

3. It is not logical to assume that the rate of growth in disability benefit spending should mirror the rate of growth in retirement benefit spending. The growth in retirement benefits is a fixed factor based on age attainment. The growth in disability benefits is a floating variable that, to some exent, is dependent on other factors such as:

A. Medical information and doctrine. Fibromyalgia is a good example. Several years ago, there was, in a relative sense, little evidence to substantiate the existence of fibromyalgia. Increasingly, however, more objective information is being added to the pot and, over time, this may alter perceptions of FMS within the social security administration. It may even be possible oneday that fibromyalgia may be included in the impairment listing manual (though, in the short term, I wouldn't hold my breath on this).

B. Disability adjudication is not entirely objective. Disability examiners (via their unit supervisors) and disability judges bring their own subjective viewpoints with them with they decide cases and these viewpoints can absolutely affect decisional outcomes.

C. A changing economy. Any individual who has ever represented disability claimants will know what I mean by this. An economy that is changing in the way that the U.S. economy is currently changing means that, increasingly, industrial and manfacturing jobs will be lost as companies offshore their operations and relocate plants to countries with lower wage rates.

This has a profound effect on workers who have some form of disability but have managed to find reasonable accomodation with their long-time employers. As industrial operations relocate, workers are forced to face the reality that new prospective employers may not be willing to accomodate, or make adjustments for, workers who have the necessary job skills, but who also have impairments to a lesser or greater degree.

It is not surprising that employers would attempt to avoid hiring such workers, of course, as workers with certain levels of infirmity may be more likely, at some point, to file for long term disability benefits or workers compensation benefits, or to make greater use of their health insurance benefits.

Nonetheless, the fact remains that workers with varying levels of impairments may find the following: when their work industry is affected by a changing economy and their jobs are forfeit as a result, they may not be able to find gainful employment and, for this reason, may need to file for disability benefits with social security.

It is simply not the case that great numbers of individuals file for disability benefits as a means of seeking an "early retirement option". And it is also not the case that claimants of an advanced age are the reason for increasing disability benefit expenditures. It is, however, true that structural chances in the U.S. economy will have an effect on the number of disability applications filed (as well as the fact that the American population is graying). However, these claimants will only be awarded benefits if they, too, satisfy the social security administration's definition of disability, a disability benefit standard that can be somewhat difficult to meet.

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