Sep 28, 2015

BOND Study Offers Further Proof That Work Incentives Don't Work

     There has been a longstanding Congressional wish to encourage those who receive Social Security disability benefits to return to work. Some of this comes from a genuine desire to help the disabled but most of it comes from a desire to reduce the amount spent on disability benefits. This has led to one piece of legislation after another, each one adding a new layer of work incentives. There has been a persistent belief that some tinkering with work incentives will result in more disabled people returning to work. None of this has made a difference. Few Social Security disability recipients return to work. What we have now is a preposterously complex system of work incentives that is difficult for Social Security to administer and impossible for the disabled to understand. Most important, the mess we have now just doesn't work.
     The latest work incentive plan is to dramatically simplify, gradually Social Security disability benefits on account of work earnings from work rather the current systems which allow Social Security disability recipients to work for a significant length of time with no reduction in their benefits until they get to a certain point at which their benefits abruptly terminate (although they're easily restarted). The idea is to implement a slope instead of a cliff. Social Security has been conducting a lengthy study of substituting a benefit offset. The call this the BOND (Benefit Offset National Demonstration) project.
     The agency's Office of Inspector General (OIG) just released a study of the BOND project. Here's an excerpt from the OIG report:
As of January 2015, the BOND project’s total cost was approximately $86.8 million. As of October 2014, only 2,333 (2.7 percent) of the 85,140 BOND project’s participants had used the offset for 1 or more months. Also, Abt [the contractor] reported that the BOND project’s benefit offset did not have a statistically significant impact on average total earnings in 2012 for Stage 1 participants; and the Stage 2 two treatment groups’ average total 2012 earnings increased above the control group by only $279 and $301 (about 8 percent), respectively.
     This is what I expected. The study has been expensive. Few have taken advantage of BOND. It has had no significant effect upon the behavior of Social Security disability benefits recipients.
     The reason why BOND isn't working in the way its supporters envisioned is simple. Social Security disability recipients are quite sick. Few have any capacity to return to work. Those who are unfamiliar with the program visualize claimants getting better and returning to work. However, the one year duration requirement in Social Security's definition of disability means that happens only rarely. If you're sick enough to be disabled for a year or more, it's unlikely that you'll get significantly better at some later time. In fact, it's very likely your medical condition will just get worse as time goes on. Yes, recovery does happen but it's rare. Those who are not familiar with Social Security disability determination also believe that many Social Security disability recipients aren't really that sick. (Why, my barber told me that he heard from his sister that her neighbor got on Social Security disability and there's not a thing wrong with him!) This belief is unshakable. It persists even in those who are disabled themselves and struggling to get on Social Security disability benefits. The truth is that it's ridiculously difficult to get on disability benefits. Many people are incapable of believing this.
     A benefit offset program should be adopted, not because it will induce more disabled people to return to work, but because it will be simpler to implement. We've had one ill-advised work incentive plan after another for decades. They haven't worked and they're not going to work. It's time to stop tinkering.  Have a little consideration for the people who have to administer the program. Simplify.

10 comments:

Anonymous said...

But, as discussed in previous blog entries, if changes in the work incentive rules is the "ransom" to be paid to allow intra-trust-fund borrowing by the Republican Congress, I'll gladly take it. They can claim victory in saving the trust fund money and getting some people back to work while disability claimants can hopefully exhale because damaging cuts in benefits and eligibility criteria were averted.

Anonymous said...

Despite SSA saying that benefits are "easily restarted" with Expedited Reinstatement (EXR), it ain't true. If checks are stopped due to work, by the time SSA works the case, typically there's an overpayment for a couple of years. SSA is taking a hard line about recovering overpayments and will withhold the EXR benefits in their entirety until the overpayment is recovered (except for the 6-month provisional payments).

Also, the EXR process of a medical decision is not done quickly. A beneficiary may be without income for several years before all this gets done by SSA.

The process is a labyrinth with many potential missteps for beneficiaries, who (as Charles says) don't comprehend the maze of regulations. Too often, it seems as if SSA plays a game of "Gotcha" here. That's no way to treat our most vulnerable citizens.

M said...

This kinda relates to the Conn case issue as well (in my disordered SSDI beneficiary mind). So you try to go back to work, but fail, as I have. Will some future DSE or ALJ hold that against you? Whatever happened to stare decisis et non quieta movere? Does common law no longer apply in America? Are we back to early Saxon trial by combat?

Anonymous said...

To M,

If you have been on SSD for two years, a work attempt is not supposed to trigger a review of your case. However, that does not mean that they won't consider the work activity when your review does naturally come around. Hopefully the person reviewing your case will have the sense to realize that an honest but failed attempt to work actually supports a finding that you meet the program standards.

M said...

Anonymous 5:19 am: I appreciate your thought and concern, but your suggestion is a slender reed upon which I will ultimately live or pursue an alternative, which I'd nearly successfully (but for a serendipitous rescue) accomplished in the past. Do the Republicans actually wish to kill me? If so, they are my "blood enemies", and if it comes to the old Saxon ways of my forebears of doing things, so be it.

Anonymous said...

I think they need to release all the restrictions of returning to work. Many recipients are very poor low income workers that are afraid of the system, and afraid they might loose the lively-hood. Why not just lift all work restrictions and those that are able can freely pay back into the system, especially if they are older than 55 years of age. Makes no sense not to allow older disable Americans to return to work and pay back into the system without being penalized, this no doubt would build the trust fund back up.

Anonymous said...

1:32 is right on! I'm sure that Charles has observed the same with his clients as I have with mine. Over the last 2 1/2 decades, I've had clients, who, once they received disability benefits for awhile without the physical or mental stresses of the workplace, believed that they had improved sufficiently so they wanted to attempt work again. If they were successful for longer than the "unsuccessful work attempt" period, their benefits were then terminated. Usually after a year or two, they suffer relapses of their original conditions or develop new complications or side effects. Then, the process is very hostile. I've seen only a small minority of ALJs who do NOT take the attitude, "You went back to work, so why can't you keep doing it? Denied!"

Because of this lack of common sense toward disabling conditions within the SSA bureaucracy, I advise my clients NEVER to even attempt a return to work UNLESS they are almost absolutely certain that they will be able to succeed over a long, long period--there is too much of a risk of losing everything and becoming destitute.

You can argue fine points of policy and regulations ad nauseum, but my clients and I have to live in the REAL WORLD, not in politicians' fantasies.

Anonymous said...

Work has a greater impact than just SSDI/SSI. Due to the low level of income these people go back to work and loose QMB status, rent assistance, SNAP, energy assistance, PAs and other benefits. To go back to work for $20,000 leaves them worse off financially and insurance wise than if they stayed poor and disabled.

The ADA is 25 this year. Because we have the ADA everyone thinks it is all rainbows and unicorns. HR continues to view those with disabilities as a liablity against the company. They will not be as productive, miss more work, cause an increase in insurance premiums and on and on and on. Not all offices and job sites are accessible, not even all post offices!

RTW is complex, but the biggest barrier to RTW is the prejudice those with a disability.

M said...

I apologize to readers for the tone of my 6:42 am post. My social worker is on his way to take me to the psychiatric hospital. But my basic point stands: if I find myself able, from time to time, to work a few hours at minimum (or close to minimum) wage, why would or should the "system" hold that against me in some future CDR?

Anonymous said...

" think they need to release all the restrictions of returning to work. Many recipients are very poor low income workers that are afraid of the system, and afraid they might loose the lively-hood. Why not just lift all work restrictions and those that are able can freely pay back into the system, especially if they are older than 55 years of age."

For one, there are many folks who are working that would meet the tough SSA disability requirements. Legally blind and deaf folks that work now can stop and fairly easily get onto SSA disability as their disabilities are fairly easily proven. I would think if they lifted all restrictions on working for disability beneficiaries, they'd need to make the requirements even tougher or go broke in a hurry.

This idea reminds me of folks that think the annual earnings test should be abolished and retirement should be paid to everyone at age 60. Social Security was meant to replace lost income. Lowering the age at which benefits can be paid no matter how much someone works has been lowered from 72 to 70 and then 65. It is full retirement age now which is 66 right now. The main beneficiaries of this have been folks who can work in their late 60s and be productive--lawyers, doctors, etc. You don't see too many folks w/ very physical jobs working in their late 60s.