Outcomes Following Termination of Social Security Disability Insurance

Abstract

This paper examines the experiences of former Social Security Disability Insurance (DI) beneficiaries in the years following termination of benefits due to medical improvement or work.  It uses data from the 2019 Disability Analysis File to identify return to DI or subsequent participation in the Supplemental Security Income (SSI) program within 5 or 10 years of benefit termination.  It draws on data from the Master Earnings File to document earnings in the 5- and 10-year periods following termination and how those earnings compare to the U.S. Census Bureau poverty threshold.  Finally, it examines the characteristics of former beneficiaries associated with a successful return to work or independence from Social Security disability programs in the years following termination of benefits.

The paper found the following:

• Among people whose benefits terminated due to medical improvement from 2005 to 2014, 16 percent of former DI-only beneficiaries and 14 percent of former concurrent beneficiaries returned to DI within five years.
• Among people whose benefits terminated due to work from 2005 to 2014, 32 percent of former DI-only beneficiaries and 50 percent of former concurrent beneficiaries returned to DI within five years.
• Fewer than half of former beneficiaries whose benefits terminated due to medical improvement had average post-termination earnings above the poverty threshold.  Those whose benefits terminated due to work were more likely to have post-termination earnings above the poverty threshold than those whose termination was due to medical improvement.
• Age and certain diagnoses were strongly associated with earnings below the poverty threshold and return to disability entitlement, especially schizophrenia and other psychotic disorders, and intellectual disabilities.

 The findings have several policy implications:

• SSA’s new Beyond Benefits Study is looking at the support needed by beneficiaries who are likely to exit or who have exited due to medical improvement to promote self-sufficiency and reduce return to disability benefit entitlement, perhaps to be tested in a future demonstration.  Our results indicate that this population may benefit from targeted work and employment support services.
• We found much higher rates of subsequent entitlement amongst people whose benefits terminated due to work compared to those who medically improved.  This finding suggests there may be advantages to expanding the target population of the demonstration to include former beneficiaries whose benefits terminated due to work.