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Social Security Disability Rolls Continue to Grow

On Behalf of | Sep 25, 2013 | Blog, social security disability

The Washington Post reports that the number of people claiming social security benefits has been steadily increasing as a result of the nation’s still-recovering economy.

From 2000 to 2012, the number of workers receiving social security benefits have increased from 5 million to 8.8 million, not including the 2.1 million dependent children and spouses who also receive benefits.

In light of this increase, federal officials are estimating that social security funds could be exhausted by 2016.

According to the Washington Post, injured workers who were previously accommodated on the job (ex: an employee with a bad back) were often the first to lose their jobs.  Unsurprisingly, finding another job with a disability in a competitive market was extremely difficult, forcing many to look to SSDI for financial support.

As a result, Congress is taking a long, hard look at the program.  Many are concerned that the program was never intended to support such a large group of people.  When President Eisenhower created the program in 1956, he saw it as a safety net for 50 – 64 year olds who could no longer work due to long-term medical problems.

Although fraud is still an issue (the Government Accountability Office identified $1.3 billion in payments to people who claimed disability but were still employed), the main problem is the ambiguity surrounding eligibility requirements.  And since disability benefits can last for decades, many recipients who could theoretically return to work ultimately choose not to.

In 2012, Social Security paid out $135 billion in benefits.  The impending retirement of a large portion of the baby boomer generation explains a significant part of the increase.  Other factors include a surge of women in the workforce (something Eisenhower probably didn’t anticipate) and an increase in eligibility and social acceptance surrounding mental illness.  Finally, some lawmakers are claiming that states have encouraged applying for social security as a way to transfer the economic burden of providing for the unemployed to the federal government.

Ultimately, most economists have identified a difficult job market  – especially for unskilled labor – as the main culprit.  There’s an established pattern during economic downturns of an upswing in social security applicants. The unique combination of a struggling economy along with a huge wave of disability and retirements for baby boomers is pushing social security over the edge.