Apr 9, 2013

"Ersatz Unemployment Insurance Or Welfare"

     Charles Lane writing in the Washington Post:
[Disability Insurance Benefits under the Social Security Act] spending has tripled since 1970, relative to the economy’s size, and it now approaches a full percentage point of gross domestic product. ...
An aging labor force explains some of the program’s growth; older workers are more likely to become disabled. But a growing body of economic and journalistic evidence suggests that SSDI reduces work incentives, because of its permissive eligibility criteria and relatively high benefits, as compared to low-wage workers’ potential earnings.
Once a backup plan for dying or incapacitated workers near retirement age, SSDI now serves as ersatz unemployment insurance or welfare — particularly attractive, and particularly hard to give up, in a sluggish economy. ...
The longer we wait to reform SSDI, the more it will drain the Treasury and erode the workforce.
     Here are some ideas that might be pursued:
  • Make it crystal clear in the law that the mere inability to obtain a job is irrelevant. You have to be unable to perform a job whether it's there or not.
  • Make the standards tough so that two-thirds of claims get turned down. Maybe a few more should get on benefits on appeal but make them wait a couple of years.
  • Make benefits low. They shouldn't be anywhere near what a person was earning before becoming disabled. 
  • Give huge incentives for the disabled to return to work. Let a person on benefits keep their full benefits for a full year after they return to work. Let them get back on benefits very easily for many years thereafter if they have to stop work. 
  • Give people drawing benefits access to rehabilitation. We can call this Ticket to Work.
     Wait, I just described current law.


Anonymous said...

"Make it crystal clear in the law that the mere inability to obtain a job is irrelevant. You have to be unable to perform a job whether it's there or not."

I hope you don't seriously think the law, as currently written, is "crystal clear" in this regard. I just finished reading a request for review, from a claimant represented by an attorney, that was based SOLELY on the fact that the VE listed jobs and she did not believe that she could get those jobs because no one was hiring.

I suggest that every claimant be given a 5 point bulleted list, in bold, 16-pt font outlining the requirements for disability.


1. Can't work at ANY job that EXISTS, regardless of whether anyone is hearing.

Anonymous said...

"economic and journalistic evidence suggests that SSDI reduces work incentives"

I believe the above statement is wrong. As a current beneficiary,i believe any person with legitimate difficulty would fear any normal sga or normal full time employment environment. But this fear could be elminated if the government would sponsor certain employers who not only help an impaired person or person with disabilities but treat such persons with dignity and or respect.

Ticket to work programs seem superficial for short term
considerations which does not guage long term considerations.

Federally sponsored employers may reduce the growing disability rolls.

Anonymous said...

Reading the entire article, they miss some key points. Germany has an outstanding appreticeship program where high school age individuals are taken by companies and trained into well paying manufacturing and other skilled labor positions.

We do not have anything like that. While Germany may have made the cuts it did, its improved economy was not soley on wiping out benefits, but by providing opportunity for living wages.

Anonymous said...

I guess the argument for reforming the program is valid then since most of the "ideas" listed don't get the results intended?

Anonymous said...

So here's a real idea.

Guarantee access to health care for everyone so that people that might possibly get better with health care might be able to do so and not be disabled in the first place or no longer be disabled after getting proper treatment.

Anonymous said...

It seems that every nation that the US should emulate in disability reform(Britain, Germany, Netherlands) all have universal health insurance. Also, Germany may have an unemployment rate of 5.4% but to claim that is due to national disability insurance policies is a big stretch. Germany has implemented programs to train unskilled workers and the government has encouraged businesses to hire people and keep them working. Many German companies have instituted cutting work hours to keep people on the job.


There are even some anecdotal stories that businesses have encouraged women to start families and take long-term maternity leave while the company does not really need them on the job and hopefully the economy will recover by the time the maternity leave ends.

Hill101 said...

Another idea might be to have better data. Check out this post. http://www.statisticsblog.com/2013/03/minding-the-reality-gap/