American workers earn their Social Security disability insurance. Nearly 160 million Americans contribute to Social Security, earning protection for themselves and their families when they retire, or if they should die or become severely disabled.
We should support the work efforts of disabled Americans -- but at the same time, it is essential that we do no harm to those who cannot work and need the Social Security benefits they have earned.
This requires a careful balancing. On one hand, Social Security should not be a barrier to work - that is, individuals who qualify for benefits but may be able to return to work should be able to try without risking their income and their health care. Longstanding Social Security rules allow workers to transition off of benefits if they are able to become self-supporting. In addition, the Ticket-to-Work program, enacted bipartisanly in 1999, provided additional services in support of return-to-work. Other federal programs, such as vocational rehabilitation, support these efforts.
At the same time, we should keep in mind that only those who have demonstrated they are unable to work qualify for DI.
Although many DI recipients would prefer to be working (since the average monthly payment provides a poverty-level income), most are simply too sick or impaired to sustain work. The majority of applicants for benefits are denied. Only about 4 in 10 applicants -- the sickest and most severely disabled -- qualify for DI. A significant number DI beneficiaries have terminal illnesses - about 1 in five men and 1 in 7 women die within a few years of becoming eligible for benefits. By law, workers with disabilities that do not prevent work do not qualify for benefits. In addition, DI is an earned benefit: those who have never worked, or only worked infrequently, are ineligible for benefits.
DI benefits replace only about half of a typical worker’s pre-disability earnings, so few beneficiaries would give up work for DI if they were able to work. DI beneficiaries have demonstrated that they were able to work in the past - that is a basic eligibility condition for this earned benefit. No benefits are payable until you have been unable to work, due to your disability, for the past five months. Even with DI, their savings, and contributions from family members, many beneficiaries are poor.
Studies of actual DI beneficiaries show that while many DI beneficiaries make an attempt to work, most are not able to sustain employment. Over time, about 28 percent worked at some point after their benefits began. But only 4 percent were able to work sufficiently to leave the program, and about a fourth of that small group who went back to work could not sustain it and eventually had to return to Social Security.
Budget cuts and the sequester undermine SSA’s work-promotion efforts. SSA’s budget is about $800 million lower this year than it was in 2010, due to a series of budget cuts and the sequester. As a result, local SSA offices have lost more than 10 percent of their staff, including some of their most experienced caseworkers. These are the same workers who are supposed to explain the work incentives that are part of DI, and to adjust individuals’ benefits when they go back to work.
Given limited resources, SSA has had to prioritize reviewing applicants for benefits rather than assisting DI beneficiaries who want to work. With less staff and the loss of very senior, more experienced staff, Social Security often struggles to administer the complicated rules intended to protect beneficiaries who try to return to work. This has led to large overpayments for those who have gone back to work. This harms the Trust Fund and also serves as a disincentive to work, since beneficiaries are afraid if they work they will someday receive a bill for many months of overpaid Social Security benefits. Even programs that SSA funds but does not directly administer have suffered from budget disputes. Two such programs -- WIPA and PABSS, through which community organizations assist beneficiaries with work -- were recently suspended for nearly a year due to lack of agreement on funding.
Before we institute any new rules or requirements for disabled workers, we need to consider carefully whether we are prepared to pay for the cost of assisting them. Our track record is indeed a cautionary tale.
Finally, SSDI payments are just one small part of our overall national strategy to promote fairness and work for disabled Americans. Social Security is only one part of our national disability policy. DI is for those with the most severe impairments, with almost no capacity to work. For the majority of disabled Americans, who are able to work, we also have: a federal-state Vocational Rehabilitation system, anti-discrimination and accommodation requirements through the Americans with Disabilities act, special education services for every child who needs them, various pathways to affordable health insurance, and federal income tax credits.
I think our discussion here today will demonstrate that there is a need to improve supports for those with partial impairments - a much larger group of people than those who qualify for DI. But in such tight fiscal times, we need to be fully aware of the costs and tradeoffs. As a rule, Americans who are able to work with some support are not eligible for any benefits from Social Security, which is not a partial disability system. If we’re going to talk about changing the rules to allow more people to combine work and DI, we also need to discuss how we will pay for the added cost of coverage for less-disabled workers.
We must also bear in mind the employer side of the equation - and what employers can and cannot do. We should not punish employers for needing workers who can come to work reliably and perform the duties of the job. We should not punish disabled workers when they cannot find accommodating employers.
There is no doubt that there’s room for improvement in our national policy for supporting people with disabilities, including those who can work and those who cannot. However, we cannot pretend that this can be done on the cheap -- that all we need to do is make a few tweaks and thousands of DI recipients will be able to support themselves through work. And we must be careful not to do so at the expense of those Americans who have no choice but to rely on the DI benefits they have earned.
The question I have for my colleagues and our witnesses is: What are we - Congress - willing to invest to support work among people with disabilities?
Should our efforts be aimed primarily the sickest and most disabled - the people who qualify for Social Security disability insurance? If so, the first step is to provide SSA with adequate resources to administer the work incentives and supportive services Congress has already authorized.
Or should we cast the net more broadly, to assist those who are struggling to work despite the effects of their impairments, but do not meet the very strict eligibility criteria for Social Security?
I look forward to hearing from our witnesses today as we sort through these challenges.
