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Growth in SSDI claims is caused by demographics, and it's slowing

The number of newly-disabled workers applying for Social Security Disability Insurance has been rising, causing some commentators to speculate that all is not right with the program. Some have conjectured that the poor economy has encouraged fraud, but Congress's own independent watchdog, the Government Accountability Office, put the 2011 Social Security fraud rate at only 0.6 percent.

Others have contended that Social Security disability is too easy to get, but the Social Security Administration's Office of Disability Adjudication and Review reports that currently, only 46 percent of applicants nationwide -- only 34 percent in Wisconsin -- are ever approved for benefits.

The SSA has long held that the reason the increase is simple demographics, and economists from the agency's Office of Economic Analysis and Comparative Studies have just released a new study confirming it. The researchers pored over all SSDI claims for the 36-year period between 1972 and 2008, and determined that three demographic factors explained nearly all of that increase.

Those factors were 1) population growth; 2) women entering the workforce and therefore becoming eligible for SSDI; and 3) the increasing age of the average worker as the Baby Boomers age, because aging dramatically increases the risk for disabling injuries or illnesses.

The researchers also concluded there was anything suspicious about the period since 1927, during which the disability incidence rate begun to climb at a faster rate than before. Once they accounted for changes in the demographics in the population eligible for SSDI, the apparent speedup disappeared.

Moreover, while critics often cite the increased growth rate in SSDI applications since 1990 as evidence that all is not right with the program, the researchers found that demographic factors explained 94 percent of that growth.

Furthermore, the SSA's 2012 Annual Statistical Report on SSDI found that the growth in applications and benefits awards is slowing -- as it has been since 2010. The agency's actuaries expect that rate to continue to slow over the coming years as the Baby Boom moves into retirement.

SSDI is a benefit workers earn by paying FICA taxes during their careers -- and it's a vital lifeline for people whose careers are interrupted by a long-term illness or disabling injury. If you can't work because of a disability, help is available.

Sources: 

  • U.S. Social Security Administration Office of Retirement and Disability Policy, "Growth in New Disabled-Worker Entitlements, 1970-2008," David Pattison and Hilary Waldron, Social Security Bulletin, Vol. 73, No. 4, Nov. 2013
  • National Organization of Social Security Claimants' Representatives, "Newly Released Data Show Continued Slowdown in Growth of Social Security Disability Insurance," Dec. 6, 2013

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