Many poor Americans seek Social Security disability payments as a financial life preserver when their unemployment benefits begin expiring, preliminary research by two economists shows.
The findings, released by the Obama administration Thursday, are based on interviews with unemployed workers ...
Their research found that close to 10% of Americans between the ages of 50 and 65 who didn’t have access to at least $5,000 applied for Social Security disability benefits by the time their unemployment benefits were set to expire. The percent of this group seeking the benefits rose precipitously in the weeks leading up to the exhaustion of benefits, as it was below 1% with 50 weeks left in unemployment benefits.
Jobless Americans in this age range who had access to at least $5,000 were much less likely to seek SSDI benefits at any point while collecting unemployment benefits.Of course, many people who are disabled wait to apply for Social Security disability until they exhaust all other possible benefits. This is because the process of obtaining Social Security disability benefits is widely and accurately regarded as unpleasant and difficult. Most people do everything they can to avoid it. That is a huge problem for anyone like myself who helps Social Security disability claimants. They often wait until the wolf is at the door before applying and then hear me or someone like me tell them that they face a process that will take two years and that the result is uncertain. If you're relying upon a claim for Social Security disability as your "life preserver" you're in big trouble. When companies lay off people, they often select their least productive workers to lay off. The least productive workers are often those with serious health problems, especially mental illness. Theoretically, the Americans with Disabilities Act (ADA) may forbid this but the ADA is a dead letter, interpreted out of any meaningful existence by the Supreme Court. Even people who started out on unemployment benefits relatively healthy may get sick and then wait for their unemployment benefits to end before applying for Social Security disability benefits. Being laid off is not good for your health. It's stressful and your access to health care is diminished.
The plain fact is that anyone can look at a chart displaying the disability incidence rate and the unemployment rate and see that common wisdom notwithstanding there is virtually no link between the two.
7 comments:
"The plain fact is that anyone can look at a chart displaying the disability incidence rate and the unemployment rate and see that common wisdom notwithstanding there is virtually no link between the two."
This statement is patently false. The chart shows a correlation. There is SOME increased in SSI apps with increased unemployment. 1975, 1983 1992, 2002 and 2010 ALL showed spikes in apps with recessions. What chart are you looking at to claim that there is no correlation?
Dealing with Social Security for a few years now, what I have noticed is that the changes in the number of disability applications closes mirrors the change in unemployment rate.
It seems like people will try to exhaust all possibilities when they are in need of financial help. This ends up putting a strain on the Social Security system.
The chart shows great correlation. Seek out a statistician to explain it to you. If you are expecting the flow lines to be closer to mirror images of each other, your "common wisdom" is not working here.
The comments don't seem to consider the fact that that in times of recession and high unemployment, businesses will let go marginal employees (many due to mental or physical impairments) and that the likelihood of these individuals finding new jobs is also decreased.
So aside from the correlation arguments, the idea that in a recession, disability applications would increase seems common sense without invoking any calculating motives on the part of applicants.
Offsetting penalties on both sides.
Really, Charlie? Really?...
It's not just the marginal employees with some disabilities who are laid off in this economy. For years, businesses have also let go the older employees who are paid more, due to years of hard work meriting salary increases.
And without a safety net. See TWA when Icahn took over. Friend of mine got laid off after 25 years of service. Since Icahn had already gutted the pension funds, the guy was stuck in his mid 50s with no pension and no prospects. All gone. It was a harbinger of America today. Sick.
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