BMN Blog

MAY 04
OVER SIXTY YEARS OLD AND STILL MISUNDERSTOOD

Social Security Disability under Title II of the Social Security Act*

 

 

Surveys have shown that most Americans know little about Social Security law and the vital benefits it provides. By far, the least understood Social Security benefit is Social Security Disability Insurance (SSDI). This lack of knowledge has been measured through objective testing in various academic studies. Anecdotally, I know this to be true based on recurring questions and comments I have received from the public and clients alike over the last several decades of my work as a social security disability attorney.

 

Let’s look at some key points to demystify this benefit that can be a lifeline for those who find themselves unable to work due to injury or illness. Disability benefits were not included in the original Social Security Act.

 

What is the Legislative History of the SSDI program?

 

The Social Security Act was signed into law by President Roosevelt on August 14, 1935. The original statute provided for retirement benefits only. It was not until almost 20 years later that badly needed disability benefit insurance was added. On August 1,1954, President Eisenhower signed a bill amending the Social Security Act to permit benefits to disabled workers aged 50-64 and disabled adult children. In September of 1960 the law was amended to allow payment of benefits to disabled workers of any age and to their dependents.

 

So, what are the basics everyone should know about SSDI?

 

Both workers and employers pay for Social Security through payroll tax contributions. These taxes should be considered comparable to paying a premium for other types of insurance coverage. To qualify, the disabled person must have a recent work history. Generally this means having worked five out of the last ten years prior to the onset of disability. Special rules apply to younger persons who need less work to qualify. The monthly disability benefit is roughly equivalent to the benefit amount the worker would receive at normal retirement age.

 

Is the disability benefit a “disincentive” to return to work?

 

 

Hardly. Benefits are calculated on the person’s entire work history using a somewhat complicated averaging formula.

 

Disability insurance benefits are modest and only replace some of the disabled worker’s income. The average individual benefit is $1,170 per month, which breaks down to $272.00 per week, or $38.80 per day. More than 45 % of disability workers receive less than $1,000 per month. The average benefits place beneficiaries barely above the poverty level and about 1 in 5 SSDI beneficiaries live in poverty. Nevertheless, the monthly benefits allow beneficiaries to meet basic needs and the needs of their families that are vital to their economic security.

 

While the disability income is critical, workers also get a wage freeze during the period of disability, thus preserving their benefit rate. Also, a worker becomes entitled to Medicare after 24 consecutive months of entitlement to disability benefits. Subject to a family maximum, families of disabled workers can be entitled to monthly benefits, but no Medicare coverage.

 

The process to obtain SSDI is begun by filing a formal application and alleging an inability to work due to medical impairment.

 

 

                    Is it easy to qualify?

 

No, because Social Security Act defines disability very strictly. The United States has one of the most stringent eligibility criteria for a full disability benefit criteria in the industrialized world, according to the Organization for Economic Co-operation and Development. The eligibility rules differ from those of private plans or other government agencies. Unlike Workers’ Compensation or Veteran’s benefits, there is no Social Security provision for temporary or partial disability. The definition includes a rigid reference to all jobs available in the labor market and does not take into account hiring prejudice, geographic location, or the unemployment rate.

 

A person is disabled if he or she cannot work due to a severe medical condition that has lasted, or is expected to last, at least one year or result in death. The person’s medical condition must prevent him or her from doing work that he or she did in the past and it also must prevent that person from performing and adjusting to other work existing in significant numbers in the national economy, considering the person’s age, education, work experience and residual functional capacity.

 

The mortality rate of those approved for disability should be some indication of the severity of their mental and physical impairment. Of those found eligible, beneficiaries are more than three times as likely to die in a year as other people the same age. Among those who start receiving disability benefits at the age of 55, 1 in 5 men and 1 in 7 women die within five years of being approved for disability.

 

Workers from all ages and backgrounds can and are receiving disability benefits, but there are some demographic patterns.

 

 

Who is receiving Social Security Disability Insurance?

 

Nearly nine million disabled workers receive disability insurance. Eligible beneficiaries range in age from workers in their 20s up to normal retirement age, when disability benefits convert to retirement benefits. The likelihood of receiving SSDI rises with age. The average age for disability recipients is 53. Most disabled workers worked at unskilled or semi- skilled physically demanding jobs. Just over half have a high school diploma or less. Many of the older workers have bodies that have broken down with age, developing multiple joint or back impairments as a result of wear and tear.

         

By law, a medical condition must be diagnosed by a qualified medical source and supported by clinically acceptable diagnostic and laboratory techniques. With each approval, a “primary diagnosis” is listed as the basis of the allowance, although the majority of those who qualify have multiple impairments, some of which are secondary to the primary impairment. Statistics published by the Social Security Administration indicate the following:

 

About 31.5 percent of all disabled worker beneficiaries are receiving benefits based on a “primary diagnosis” of a mental impairment, including intellectual disabilities and other mental disorders such as schizophrenia, PTSD, or severe depression.

 

30.5 per cent of disabled worker beneficiaries have a disability based on a musculoskeletal or connective tissue disorder.

 

20.4 percent include workers living with cancers; infectious diseases; injuries; genitourinary impairments such as end stage renal disease; congenital disorders; metabolic and endocrine diseases such as diabetes; diseases of the respiratory system; and diseases of other body systems.

 

9.3 percent are receiving benefits based on nervous system disorders such as cerebral palsy or multiple sclerosis, or a sensory impairment such as deafness or blindness.

 

8.3 per cent have a cardiovascular condition such as chronic heart failure.

 

In order to receive disability benefits, the worker must have medical evidence to document his or her claim. This first review of that medical proof is called the initial level and many believe only a few very lucky people get approved.

 

Does everyone get denied the first time around?

 

No. That is where most people are approved. However, of the thousands who are denied, many go on to a successful appeal. In Alabama, about 28 % of disability applicants receive favorable or partially favorable decisions at the initial level. Many who are denied at the initial level are discouraged and do not appeal. For those who do appeal to the hearing level, the approval rate for administrative law judges is about 50%. The national statistics are similar, but in most states there is a mid-level appeal called a reconsideration. If you look at the sheer numbers, most approved claims occur at the initial level. Included at the end of this paper is a “Waterfall Chart” from FY 2015 showing 883,697 allowances at the initial level, an additional 84,128 at the reconsideration level. Of the 507,883 Administrative Law Judge decisions only 228,547 were approved for a reversal rate of only 45%. To look at the entire chart, go to https://4.bp.blogspot.com/-5gbGuWpoCOQ/VrpcIDQdFaI/AAAAAAAAClI/3fPDut2OFMk/s640/Waterfall%2BChart%2B2015.jpg.

 

Since objective medical evidence must exist to support an allowance of a claim, it is very difficult to falsify a disability case short of outright fraud.

 

                    How rampant is fraud in the system?

 

Not nearly as much as commonly perceived. As we know, disability fraud gets a lot of media attention. The truth is, there is very little fraud from a statistical standpoint. Social Security, along with the Office of the Inspector General, work hard to identify and prosecute fraud. Social Security reports that its zero-tolerance approach has resulted in a fraud incidence rate lower than 1%. This very small fraction of claimants who were out to game the system is consistent with my own experience in representing thousands of claimants over the years. I have seen only a few cases of claimants who were knowingly attempting to deceive the system. I have no firsthand knowledge of a physician or an attorney engaging in fraud and misrepresentation in connection to a disability claim.

 

Often, someone will tell me they know someone on disability whose only problem is drug or alcohol problem.

 

                    Can claimants with a substance abuse or substance dependence disorder receive a disability benefit?

 

No, not if that is the only reason they are unable to work. This change was made 20 years ago, but members of the public continue to believe a person can get disability for substance use disorders. An amendment to the Social Security Act, signed by the President Clinton on March 29, 1996, made a change in the basic philosophy of the disability program. Beginning on that date, new applicants for Social Security or SSI disability benefits could no longer be eligible for benefits if drug addiction or alcoholism(DAA) is a material factor to their disability. Unless they can qualify on some other medical basis, they cannot receive disability benefits. Individuals in this category already receiving benefits, had their benefits terminated as of January 1, 1997.

Another controversial subject of late has been the possibility of increasing numbers of disability applications and allowances of people who have given up on work.

         

Does a bad economy drive up the number of disability applicants and awards?

 

Not according to SSA statistics. Experts predicted for decades that the number of workers drawing disability would increase. Baby boomers reaching their most disability-prone years and more women working and qualifying for disability benefits are two main reasons for the increase. Allowances have actually gone down each year from a high in 2010. Increased claims have not equated with increased allowances because weak claims are weeded out in the strict evaluation process.

 

In conclusion, Congress created Social Security disability insurance for workers and their families. Disability benefits provide a critical source of financial support to workers when they need it most.       I have witnessed the lifeline these benefits represent to disabled workers and their families who are struggling to maintain financial security and dignity during an extremely emotional and fearful time in their lives.

 

I have dedicated my legal career to representing the disabled at all levels of the administrative and federal court process. I hope the information contained in my paper has shed some light on this critical and often misunderstood benefit. For more information about SSDI (or SSI), feel free to contact me at jcox@coxdisability.com or visit my webpage at www.coxdisability.com.

 

 

*Title XVI of the Social Security Act created Supplemental Security Income (SSI) benefits. Although the definition of “disability” is the same, there is a financial test for SSI where one’s income, assets and resources must be below the statutory level. This article does not address the facts and figures associated with SSI beneficiaries.

**Statistics are from FY 2015, prepared by SSA, Office of Disability Program Management Information at ssa.gov.

 

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