When was disability insurance added to social security

Supplemental Security provides assistance to people with severe disabilities who have very low incomes and assets and who either lack sufficient work history to be covered for Disability Insurance or receive only a very small Disability Insurance benefit.

It is important to note that many Supplemental Security beneficiaries, although lacking the sustained work history necessary to be insured under Disability Insurance, have worked and paid into the Disability Insurance system.

And others, particularly women, are not eligible for Disability Insurance because they took time out of the paid labor force to care for children or other family members. Workers must apply for and exhaust all other available benefits before qualifying for Disability Insurance or Supplemental Security.

Both Disability Insurance and Supplemental Security provide incentives for beneficiaries to work. Disability Insurance beneficiaries are encouraged to work up to their full capacity and can earn an unlimited amount for up to 12 months without losing any benefits.

Beneficiaries who work for more than 12 months and have earnings above the substantial gainful activity level cease to receive a monthly benefit. This means they do not need to repeat the entire, and typically lengthy, disability-determination process that they initially went through to qualify for benefits.

Supplemental Security beneficiaries who are able to work are encouraged to do so as well. Beneficiaries who are able to do some work will therefore always be better off with both earnings and a reduced benefit than just the benefit alone.

These incentives are helpful for beneficiaries who are able to do some work or whose conditions improve. The best available data on annual employment rates among working-age beneficiaries of Disability Insurance and Supplemental Security come from a recent report that linked Social Security data and earnings records in , before the onset of the Great Recession. This report found that Disability Insurance beneficiaries were somewhat more likely to have worked than Supplemental Security beneficiaries: The vast majority of beneficiaries who did work had extremely low earnings—just 2.

There has been little change over the past two decades in the share of nonelderly adults receiving Supplemental Security due to a disability. In , 2. This comparison does not, however, take into account demographic and economic changes, particularly the aging of the population and the increase in poverty, which both have increased the number of people who are potentially eligible for Supplemental Security.

Controlling just for income, participation in Supplemental Security by working-age adults who are potentially eligible because of low income has actually declined over the past decade and a half. In there were In other words, the number of nonelderly adults receiving Supplemental Security grew at a slower rate than the number of nonelderly adults with very low incomes. The share of nonelderly adults receiving Disability Insurance has increased over time.

This is largely due to demographic factors, including:. The disability-prevalence rate, adjusted for age and sex, was 4. A number of factors account for this one-percentage-point increase in the disability-prevalence rate after accounting for the changes in the age and gender distribution of the workforce, including the following:. Finally, declining job opportunities for older workers, particularly older workers with severe physical limitations, have likely contributed to the increase.

Currently, the number of U. It is important, however, to not overstate the impact of the Great Recession or of economic recessions generally. As described above, Disability Insurance is funded by a dedicated share of payroll tax contributions—0. Since the mids the Social Security Administration has consistently projected that the Disability Insurance trust fund would have sufficient reserves to cover all scheduled benefits until , but that after that date, additional funds would be needed to avoid a shortfall in the necessary funds to continue paying full benefits.

If no action is taken to address the shortfall, the Disability Insurance trust fund will only be able to pay 80 percent of scheduled benefit levels after Congress has addressed similar shortfalls—in both the Disability Insurance trust fund and the Old Age and Survivors Insurance trust fund, which pays retirement benefits—nearly a dozen times in the past by temporarily reallocating the share of overall payroll tax revenues that is dedicated to each trust fund.

In some cases, they have reallocated funds from the Disability Insurance trust fund to the Old Age and Survivors Insurance trust fund; in others, they have reallocated funds from the Old Age and Survivors Insurance trust fund to the Disability Insurance trust fund.

According to the Social Security Administration, the current shortfall could be closed through by temporarily reallocating a modest share of funds from the Old Age and Survivors Insurance trust fund to the Disability Insurance trust fund. Alternatively, the shortfall could be closed over the long term by a small—0. Absent increased revenues or decreased costs, both the Disability Insurance and Old Age and Survivors Insurance trust funds face shortfalls in the mid- to late s. Long-term—year—solvency for both programs could be achieved through an increase in the payroll tax rate from 6.

Another frequently discussed option is raising or eliminating the cap on earnings that are taxed for Social Security. In public expenditures on incapacity-related benefits comprised just 1.

Proponents of cutting disability benefits in the United States sometimes point to particular elements of disability program reforms in Europe—particularly in Germany, the Netherlands, and the United Kingdom—as potential models for changes to the Social Security disability programs. In general, however, such proposals fail to take into account that these nations have much more generous disability systems, less rigorous disability standards, higher levels of social expenditures—not just on incapacity benefits but on social assistance generally—and more regulated labor markets than the United States.

Disability Insurance and Supplemental Security increase economic security for millions of disabled workers. For beneficiaries whose conditions improve, the programs also provide important incentives and supports for returning to work.

The current maximum benefit is equivalent to just three-quarters of the also-outdated federal poverty line for a single person. To address this erosion, H. These out-of-date restrictions make it impossible to maintain even a modest amount of savings, forcing beneficiaries to remain asset poor and unprotected in the event of an unexpected dental bill, leaky roof, or other unforeseen emergency expense.

Many disabled workers who receive disability benefits have made repeated attempts to work in spite of their impairments before finally turning to Disability Insurance or Supplemental Security as a last resort. Due to the strictness of the disability standard, many beneficiaries are terminally ill, and most are in poor and declining health. As discussed above, however, for beneficiaries whose conditions improve, the Social Security disability programs encourage beneficiaries to work up to their capacity and return to work if and when they are able, with protections in the event of failed work attempts.

But more should be done to ensure that beneficiaries are aware of the work incentives, supports, and protections that Disability Insurance and Supplemental Security provide. Additionally, consideration should be given to further enhancing these incentives, supports, and protections. Options include:. Shawn Fremstad is a consultant on social policy and a senior research associate at the Center for Economic and Policy Research in Washington, D.

Rebecca Vallas is an attorney and policy advocate specializing in disability law and policy at Community Legal Services in Philadelphia. Rebecca Vallas , Shawn Fremstad. Colin Seeberger Director, Media Relations. Peter Gordon Director, Government Affairs. Madeline Shepherd Director, Government Affairs. How many people currently receive Social Security disability benefits, and what is the value of the benefits they receive?

How are Disability Insurance and Supplemental Security benefits funded? What is the disability standard for Disability Insurance and Supplemental Security? What other requirements are beneficiaries required to meet? How common is it for beneficiaries to return to work? How have the number and share of people receiving disability benefits changed over time, and what accounts for these changes?

Americans between the ages of 60 and 66 are 14 times as likely to currently be on the SSDI rolls as Americans between the ages of 30 and Disabilities that first arise in middle age or old age vary.

They can include severe carpal tunnel syndrome which can make it impossible for you to type or work with your hands , debilitating arthritis, cancer, vascular dementia, kidney failure, and fibromyalgia, among a wide range of other conditions. Qualifying and staying qualified for SSDI is extremely important for older Americans with chronic health conditions — even for Americans who worked as white-collar professionals, who might have considerable savings and private disability insurance.

Because Medicare and Medicaid eligibility for people with disabilities is tied to SSDI and SSI respectively, more frequent CDRs will mean some disabled adults also lose their health insurance, a clearly life-threatening proposition. He develops a physical condition that causes him to lose his job. Raising the frequency of CDRs is just one example of recent pullbacks to disability insurance.

In , the Social Security Administration decided that they would put more weight on the opinions of government-employed doctors, who perform quick evaluations, as opposed to the patient's own doctors, who have seen the patient's condition evolve over the course of years.

Still, making disabled Americans repeatedly jump through bureaucratic hoops strikes many advocates as particularly punitive. This is a BETA experience. You may opt-out by clicking here. More From Forbes. Nov 13, , am EST. Nov 12, , pm EST. Nov 11, , pm EST. Nov 10, , am EST.