Denied Disability, Yet Unemployed
Most people have already left their jobs before applying for federal disability benefits. The problem for older people is that when they are denied benefits, only a small minority of them ever return to work.
Applicants to Social Security’s disability program who quit working do so for a combination of reasons. They are already finding it difficult to do their jobs, and leaving bolsters their case. However, when older people are denied benefits after the lengthy application process, it’s very challenging to return to the labor force, where ageism and outdated skills further complicate a disabled person’s job search.
A new study looked at 805 applicants – average age 59 – who cleared step 1 of Social Security’s 5-step evaluation process: they had worked long enough to be eligible for benefits under the disability program’s rules. The researchers at Mathematica were particularly interested in the applicants rejected either in steps 4 and 5.
Of the initial 805 applicants, 125 did not make it past step 2, because they failed to meet the basic requirement of having a severe impairment. In step 3, 133 applicants were granted benefits relatively quickly because they have very severe medical conditions, such as advanced cancer or congestive heart failure.
The rest moved on to steps 4 and 5. Their applications required the examiners to make a judgment as to whether the person is still capable of working in two specific situations. In step 4, Social Security denies benefits if an examiner determines someone is able to perform the same kind of work he’s done in the past. In step 5, benefits are denied if someone can do a different job that is still appropriate to his age, education, and work experience.
In total, just under half of the 805 applicants in the study did not receive disability benefits.
It’s very common for the people who are turned down to appeal Social Security’s decision or reapply.
Failing that, one fallback option popular among older applicants is to start their Social Security retirement benefits after they become eligible at age 62. However, this fallback has financial consequences in the form of a smaller monthly benefit check than if they waited a few more years.
To read the policy brief, authored by Jody Schimmel Hyde and April Yanyuan Wu, see “Do Older SSDI Applicants Denied Benefits on the Basis of their Work Capacity Return to Work after Denial?”
The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Disability Research Consortium. The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of SSA or any agency of the federal government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.
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You can also read about this study, and how it corroborates a robust body of research, at https://www.cbpp.org/blog/denied-disability-applicants-fare-badly-in-the-labor-market.
The problem many of these folks face, which I have just become aware of recently, is the tilting of social security toward the relatively well off who can afford to wait to 66 or even 70 to take their benefits, which allows then to dramatically increase their benefit amount (roughly 8% per year, compounded, I think). I'd love to seem more research and writing on this; those who who need SS the most end with paltry amounts, and the well off who don't need it as much end up with much, much more. I know those formulas must be based on real annuity tables, etc., but the result still seems unfair.
So I can understand why about half are granted benefits here. I think the real problem is not the percent but the general incompetence in the Federal government workers overall because no one ever gets fired due to civil service protections. In the private sector most workers are at will employees, which means they can be fired at any time for incompetence and any reason. Fraud throughout the Federal government is estimated at least 500 million to 1.5 billion per year