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SSA Disability Program Faces Challenges

On Behalf of | Mar 2, 2016 | Social Security Disability

The Social Security annual disability insurance trust fund contains $150 billion to assist physically and mentally-disabled recipients and their families. Like the Social Security retirement trust fund, however, theSocial Security Disability insuranceprogram confronts a financially uncertain future. Congress will have to address the anticipated depletion of the retirement fund by 2035, which could lead to the shifting of funds from the disability fund to cover this deficit.

Benefits are normally up to $1,165 each month or $14,000 per year under the disability program. Addressing deficits is challenging because the number of disabilities covered under this program have grown, while at the same time it has been difficult to reduce the number of claimants. Nonetheless, 11 million recipients may face a 19 percent reduction in SSD benefits.

The number of workers receiving SSD benefits grew from 1.5 million in 1970 to 9 million in 2013. According to a recent Urban Institute report, the share of workers receiving these payments tripled from 1.6 percent in 1970 to 5.5 percent in 2013, which was attributed to the aging of the population, declining employment during the recession and new and more liberal eligibility standards.

Few recipients leave this program unless they retire and begin receiving Social Security retirement benefits before their death. The number of claimants removed from disability dropped from 174 per 1,000 existing beneficiaries in 1970 to 76 per 1,000 in 2003. Distribution of disability insurance recipients varies greatly among the states. Maine and New Hampshire show the highest national rates for mental illness, while southern states such as Mississippi and Alabama, along with West Virginia, suffer the highest rates of circulatory disease. Southern state claimants are more likely to receive SSD benefits.

The number of people joining this program has not grown much, according to the Urban Institute. This figure spanned from 4.7 to 6.4 per 1,000 disability beneficiaries, depending on economic conditions. People with musculoskeletal disorders are the most common recipients. Benefits for these disorders grew from 65 percent between 1996 and 2014. Half of all women and one-third of men also receive monthly benefits below $1,000. Slightly less than half of all benefit recipients fell into the bottom income earners category.