SS Trust Fund to run dry sooner than anticipated

[ShortInSeattle]

Every day I see healthy appearing person "scamming" the disability system. 40 yr olds with normal spines claiming back pain. Don't know just how pervasive this is (ie, don't have hard data on this), but it would appear that the nation of "food stamps" is also a nation of "I can't work, give me a monthly check" for my fibromyalgia". Please refrain from hate-mail, I know there are plenty of people who justifiably need SSDI, but those who don't are robbing the social security system (read: stealing from seniors).

I think this situation is a tough one to assess. We can't see into someone's heart (and medical history) to pass judgement, but on the other hand many of us can think of people we've met who are living off the government unnecessarily.

I have a young relative who gets several hundred a month because he has a parent on disability. He has a working parent too (doesn't need the money) and spends most of the cash on snowboarding and X-box games. Some goes to a college fund.

A friend's brother couldn't hold down a job because he wouldn't wake up on time and had poor hygiene. His disability attorney had him take jobs to "prove he'd get fired" while they appealed to SSI. He was eventually approved, the lawyer took a big bite of the cash, and now he spends almost all of his time playing online videogames. He'd like to get a part time job and see if he can re-enter the workforce, but doesn't want to risk his benefits which include medications.

I don't think of either of these young men as "robbing the system" but it does seem to me that we're not making the best use of our tax dollars.

 

[thefinancebuff]

Even in the Trump scenario it's capped by the family max. So Ivana & Melia (wives) and Tiffany and Barron (minor kids) would all get reduced amounts.

I don't think divorced spouse is subject to the family max.

 

[Bdroc]

Every day I see healthy appearing person "scamming" the disability system. 40 yr olds with normal spines claiming back pain. Don't know just how pervasive this is (ie, don't have hard data on this), but it would appear that the nation of "food stamps" is also a nation of "I can't work, give me a monthly check" for my fibromyalgia". Please refrain from hate-mail, I know there are plenty of people who justifiably need SSDI, but those who don't are robbing the social security system (read: stealing from seniors).

I read that SS disability has doubled in recent years and that many new claims occur after unemployment benefits run out. I also read that more than 40% of new claims are for mental stress. Smells like a scam to me.

 

[REWahoo]

I read that SS disability has doubled in recent years and that many new claims occur after unemployment benefits run out. I also read that more than 40% of new claims are for mental stress.

Can you provide us a link to the source of your info?

 

[Cb]

Can you provide us a link to the source of your info?

The Econtalk podcast addressed this topic last week:

David Autor of MIT talks with EconTalk host Russ Roberts about the Social Security Disability Insurance (SSDI) program. SSDI has grown dramatically in recent years and now costs about $200 billion a year. Autor explains how the program works, why the growth has been so dramatic, and the consequences for the stability of the program in the future. This is an illuminated look at the interaction between politics and economics and reveals an activity of government that is relatively ignored today but will not be able to be ignored in the future.

 

[travelover]

I read that SS disability has doubled in recent years and that many new claims occur after unemployment benefits run out. I also read that more than 40% of new claims are for mental stress. Smells like a scam to me.

I've read that the moon landing was just faked on Hollywood sets.

And yes, I have found kooky web sites to back it up:

http://www.ufos-aliens.co.uk/cosmicapollo.html

 

[ziggy29]

Can you provide us a link to the source of your info?

94.52% of all statistics are made up.

 

[REWahoo]

94.52% of all statistics are made up.

Yes, and the 2010 Census revealed that three out of four people make up 75% of the total US population.

 

[Independent]

The Econtalk podcast addressed this topic last week:

David Autor of MIT talks with EconTalk host Russ Roberts about the Social Security Disability Insurance (SSDI) program. SSDI has grown dramatically in recent years and now costs about $200 billion a year. Autor explains how the program works, why the growth has been so dramatic, and the consequences for the stability of the program in the future. This is an illuminated look at the interaction between politics and economics and reveals an activity of government that is relatively ignored today but will not be able to be ignored in the future.

I find it quicker to read than to listen. So I looked for a paper by the same person. This is one: http://economics.mit.edu/files/6880

He has a graph (Figure 5) that compares SSDI applications and unemployment rates. There is another graph on Mental and Musculoskeletal claims. But nothing on the timing of claims relative to disability benefits.

Note that SSDI applicants need to be out of work for about six months before they apply, then they need to stay out of work until they get a claim decision (typically another four months for those approved).

The paper seems like a thoughtful discussion of the system's difficulties and the trade-offs involved in modifying the system.

Edit: Missed the fact that there's a transcript of the podcast lower on the page.

 

[ziggy29]

Yes, and the 2010 Census revealed that three out of four people make up 75% of the total US population.

Reminds me of a Dilbert comic where the pointy-haired boss is outraged to hear that 40% of all sick days were taken on Monday or Friday.

 

[Cb]

The paper seems like a thoughtful discussion of the system's difficulties and the trade-offs involved in modifying the system.

Edit: Missed the fact that there's a transcript of the podcast lower on the page.

I found the dialogue between the Roberts & Autor pretty interesting as well. I listen to Econtalk every week, and have often search the transcripts for certain exchanges later. I'm always surprised at how much is missed in the transcripts due to the lack of inflection.

Anyhow, Autor's work suggests there are plenty of people gaming the system since the liberalization following Reagan's crack-down.

 

[marko]

Anyhow, Autor's work suggests there are plenty of people gaming the system since the liberalization following Reagan's crack-down.

I wonder how many people, after reading the news everyday are just saying: "Hey, where's mine?" and going for it.

 

[eridanus]

The WaPo had a similar story about the SSDI numbers increasing.

Jobless are straining Social Security's disability benefits program

It, too, claims that the numbers increase as unemployment runs out. The average payment is $1100/month, which is pretty good if you're not making much in the first place.

"As a result, economists say, many low-wage workers who struggle with health problems have fewer incentives to remain attached to the labor force. "

 

[Bdroc]

The Econtalk podcast addressed this topic last week:

David Autor of MIT talks with EconTalk host Russ Roberts about the Social Security Disability Insurance (SSDI) program. SSDI has grown dramatically in recent years and now costs about $200 billion a year. Autor explains how the program works, why the growth has been so dramatic, and the consequences for the stability of the program in the future. This is an illuminated look at the interaction between politics and economics and reveals an activity of government that is relatively ignored today but will not be able to be ignored in the future.

Several articles but here's an excerpt:

The New York Post reported Sunday that as unemployment checks run out, many jobless are trying to gain government benefits by declaring themselves unhealthy.

More than 10.5 million people -- about 5.3 percent of the population aged 25 and 64 -- received disability checks in January from the federal government, the Post wrote, a 18 percent jump from before the recession.

Among those claiming disability, 43 percent are asking for benefits because of mental illness, the Post wrote. A growing number of those people are older, former white-collar workers.

Don't you think it's a coincidence that the number of people claiming SS disability Habsburg grown so much in the past few years?

 

[sundance]

I understand they get paid SS disability from date of filing. So eventually they get this huge back check! No wonder ALL the lawyers are chasing the golden duck. And YES I cant believe the amount of young mothers collecting SS DISABILITY and/or workman's compensation based on "stress". It's an epidemic! I felt guilty collecting a pension.

 

[MichaelB]

I understand they get paid SS disability from date of filing. So eventually they get this huge back check! No wonder ALL the lawyers are chasing the golden duck. And YES I cant believe the amount of young mothers collecting SS DISABILITY and/or workman's compensation based on "stress". It's an epidemic! I felt guilty collecting a pension.

Attorney fees for SSI claims are regulated. I believe they are limited to 25% of the first payment. This is no golden duck.

 

[Bestwifeever]

Several articles but here's an excerpt:

The New York Post reported Sunday that as unemployment checks run out, many jobless are trying to gain government benefits by declaring themselves unhealthy.

More than 10.5 million people -- about 5.3 percent of the population aged 25 and 64 -- received disability checks in January from the federal government, the Post wrote, a 18 percent jump from before the recession.....

Ah, so it's an "18 percent jump" (my bolding above), not exactly the same as "I read that SS disability has doubled in recent years...."

 

[Brett_Cameron]

I understand they get paid SS disability from date of filing. So eventually they get this huge back check! No wonder ALL the lawyers are chasing the golden duck. And YES I cant believe the amount of young mothers collecting SS DISABILITY and/or workman's compensation based on "stress". It's an epidemic! I felt guilty collecting a pension.

When DW filed for SSDI in 2009, SS determined that she had been disabled starting in 2004. They could only backpay for 24 months. The back pay really helped pay accumulated medical debts.

Date of filing does not determine date of disability. They determine date of disability by obtaining information from doctors and other information.

Note: the reason she had not filed earlier was because we (I) did not think she was eligible. As it turned out, she filed on line and got approved on the first try. No lawyers required. But unfortunately, there was no question of my DW's disability. We had telephone interviews with some people. It took about 5 months from filing to approval. The state government agency did the vetting for determination of disability.

 

[Cb]

Ah, so it's an "18 percent jump" (my bolding above), not exactly the same as "I read that SS disability has doubled in recent years...."

From the podcast transcript:

"Guest: ...So, disability claims rise very rapidly when the unemployment rate rises. And we've seen a dramatic increase. So, for example in 2011 there were 2.9 million applications for SSDI; that compares, let's say, to 2005 when there were 2.1 million applications; or in 1999, when the economy was actually doing quite well, when there were 1.2 million. So from 1999 to 2011 the number of applications rose by 1.6 million. More than doubled.
Russ: From 1.2 to 2.9 million.
Guest: Right. So, currently there are 8.6 million disabled adults receiving SSDI benefits, about 4.7% of all adults aged 25-64 in the United States. So, it's roughly 1 in 20, a substantial number. And the cost of the program is also very substantial. So, approximately $130 billion a year in cash payments are made through SSDI, and then the Medicare component adds another $70 billion to that. So you are talking about basically a $200 billion dollar program at this point. So if you even just divide that by the number of U.S. households, it's over $1500 in expenditure per U.S. household; if you think about it, that's ultimately coming from taxpayers. It's not at all a negligible program; in fact, it's a very large government program.
Russ: So, let's again put this in perspective over time. You told us that from 1999 to 2011 there was a more than doubling of applications. Now you just gave us a number--was this for 2009, the 8.6 million number?
Guest: That is for 2011.
Russ: So, in the most recent data, 1 in 20 Americans of age 25-64, one measure of working age, are receiving disability. Give me a number in the past that I can compare that to.
Guest: Sure. So in 1981, let's say, about 2.2%, 2.3% of adults ages 25-64 were receiving SSDI. So the fraction of the population receiving it has doubled."