Every Bad Idea For Social Security That The GOP Has Ever Had, In One Document

    Republicans in the House of Representatives have put forth their plan for what that they hope to extort from the President by threatening to put the U.S. government into default on its debts. Here's what their plan would do to Social Security retirement benefits (begins at page 80):

• Implement a new minimum benefit of 15% of the average wage index;
• "Modernize" the Social Security benefit formula, which is a euphemism for reducing future benefits for those now 54 and younger;
• Increase Full Retirement Age to 70 between now and 2040;
• Eliminate the retirement earnings test for those who are under Full Retirement Age;
• Eliminate auxiliary benefits for high wage earners.
  

    The plan also includes changes in disability benefits (begins at page 74):

• Enact a benefits offset experiment that would reduce disability benefits by $1 for every $2 earned (they must not know that this experiment is underway already);
• Allow FICA reductions for employers with high rates of employee retention, which is supposed to help handicapped people stay employed (which would disadvantage manufacturers);
• Require employment in six of the last ten years, instead of five;
• Time limited disability benefits for some recipients; 
• "Update" the grid regulations;
• Make disability benefits contingent on medical improvement (I don't think they meant to say that but that's what they said);
• Prevent those drawing unemployment benefits from drawing disability benefits;
• Eliminate withholding of attorney fees for representing claimants (at least I think that's what they're saying but they only thing clear about it is that they bear a lot of ill will towards attorneys);
• Close the record "after a reasonable period of time";
• Require Social Security to conduct periodic reviews of ALJ decisions, particularly those of "outlier" judges;
• Prohibit reapplications within 12 months of a denial;
• Increase the waiting period for Medicare from 24 months to 60 months;
• Eliminate the ability to apply for both early retirement and disability benefits at the same time;
• Allow employers and employees a reduced FICA rate if the employer provides long term disability benefits.

Social Security Reviewing SSI Reductions Due To Covid Financial Assistance

     From a recent new posting to Social Security's Covid-19 page:

We recently changed our rules about what financial assistance can affect your eligibility for SSI or your monthly SSI payment amount. Specifically, we no longer count the financial assistance listed below against your eligibility or payment amount. We are reviewing SSI claims and other SSI records going back to the beginning of the COVID-19 pandemic to restore SSI payments for people whose SSI was affected by receiving any of the assistance listed below. ...

• Economic Impact Payments (EIP)
• State Stimulus Payments (Some exclusions may apply.)
• Unemployment Assistance (also includes regular unemployment)
• Paycheck Protection Program (PPP): Loan Forgiveness to Employers and Self-Employed Individuals
• Economic Injury Disaster Loan (EIDL) Program: Loans/Grants to Employers and Self-Employed Individuals /Grants
• Coronavirus Food Assistance Program – Direct Payments to Farmers and Ranchers
• COVID-19 Veteran Rapid Retraining Assistance Program
• COVID-19 Funeral Assistance
• Emergency Rental Assistance Fund
• Emergency Assistance for Rural Housing/Rural Rental Assistance
• Homeowner Assistance Fund
• Housing Assistance and Supportive Services Programs for Native Americans
• Tribal Payments from the Coronavirus Relief Fund and the Coronavirus State and Local Fiscal Recovery Funds
• Supporting Foster Youth and Families
• Higher Education Emergency Relief Fund
• Emergency Assistance to Children and Families through the Pandemic Emergency Assistance Fund
• Farm Loan Assistance for Socially Disadvantaged Farmers and Ranchers
• USDA Assistance and Support for Socially Disadvantaged Farmers, Ranchers, Forest Land Owners and Operators, and Groups ...

Some Thoughts On The Declining Number Of Disability Claims

 Why Are There Fewer Social Security Disability Claims Now?

     There has been a 32% decline in the number of disability claims received by the Social Security Administration between the peak year of 2010 and 2018. See the chart below.

https://www.ssa.gov/OACT/STATS/dibGraphs.html

     There must be some explanation for this dramatic change. I'm going to explore what might be behind this.

Reduction In Unemployment Doesn't Fully Explain What's Happened

     The most commonly given explanation is the reduction in unemployment between 2010 and 2018, which is shown on the chart below.

https://data.bls.gov/timeseries/LNS14000000

       

      It just makes sense that disabled people would have a harder time holding down a job in a time of high unemployment. 

     The theory that the answer is unemployment appeals to many on the right because it allows them to claim that disability benefits are thinly disguised unemployment benefits. In their view, many of those drawing disability benefits aren't really disabled; they just can't find jobs. Of course, they don't want to give them unemployment benefits either but that's another story. 

     This theory never made sense to me as an explanation for the earlier increase in the number of disability claims. It wasn't what I was seeing on the ground. I did see a few disabled people who had been struggling to hold down a job who became the first to be laid off during the great recession but not many.

    Don't rely upon my anecdotal account of what was going on during the great recession, though. The big problem with the unemployment theory is that while the unemployment rate went down dramatically between 2010 and 2016, the reduction started flattening out in 2017 and there was little or no reduction in 2018 and so far in 2019 yet the number of disability claims filed has continued its steep decline in 2018 and early 2019. Why would that be if unemployment is the answer?

     While it's certainly possible that the reduction in unemployment was a factor in the decline in the number of disability claims, it certainly cannot be the only factor at work.  

No Fewer Disabled People Now

      One possible explanation that has occurred to me is that fewer people regard themselves as disabled than was the case a few years ago. Maybe it's medical advances. Maybe it's more people able to get medical care as a result of the Affordable Care Act. 

     The chart below suggests otherwise. The number of people who described themselves as disabled went up between 2010 and 2016 as the rate of unemployment went down and has stabilized since. That doesn't match up at all with the number of disability claims.

From Federal Reserve Bank of St. Louis

Increased Labor Force Participation Rate Isn't The Explanation Either

     The unemployment rate is only the percent of those who are looking for work who can't find work. People who are neither working nor looking for work don't show up in the unemployment rate. Maybe the improving economy drew more people into the workforce and away from disability claims. However, the chart below suggests that didn't happen at all. The labor force participation rate actually went down as the rate of unemployment went down. That's the opposite of what you would expect if more disabled people were working instead of filing disability claims. If anything, this data undermines the theory that there's a strong link between unemployment and disability claims.

From Federal Reserve Bank of St. Louis

Increased Labor Force Participation By The Disabled Isn't The Explanation Either

      I've wondered whether the disabled population was participating in the labor force at a greater rate even if the rest of the population isn't but that isn't the case. I don't have a chart for it but in June 2010 21.7% of persons with a disability age 16 and over were participating in the civilian labor force while in 2018 20.8% were participating. That's a minor reduction, not an increase. Again, if anything, this data undermines the theory that unemployment and disability claims are closely linked.

Demographics May Be A Part Of The Answer

     The incidence of disability goes up sharply as people age as shown on the chart below from the Urban Institute. Age 50 is an important break point around which the incidence of disability starts going up significantly.

    

     During the Great Depression and World War II the birth rate in the United States was quite low but that changed dramatically after World War II. However, the number of births didn't eventually just level off. They actually started going down in 1962 and didn't start picking up again until 1979. See the chart below.

U.S. Live Births and Birth Rate

1910	2,777,000	30.1
1915	2,965,000	29.5
1920	2,950,000	27.7
1925	2,909,000	25.1
1930	2,618,000	21.3
1935	2,377,000	18.7
1940	2,559,000	19.4
1945	2,858,000	20.4
1950	3,632,000	24.1
19523	3,913,000	25.1
19533	3,965,000	25.1
19543	4,078,000	25.3
1955	4,104,000	25.0
19563	4,218,000	25.2
19573	4,308,000	25.3
19583	4,255,000	24.5
19593	4,295,000	24.3
19603	4,257,850	23.7
19613	4,268,326	23.3
19623	4,167,362	22.4
19633	4,098,020	21.7
19643	4,027,490	21.0
19653	3,760,358	19.4
19663	3,606,274	18.4
19674	3,520,959	17.8
19683	3,501,564	17.5
19693	3,600,206	17.8
19703	3,731,386	18.4
19713	3,555,970	17.2
1972	3,258,411	15.6
1973	3,136,965	14.9
1974	3,159,958	14.9
1975	3,144,198	14.8
1976	3,167,788	14.8
1977	3,326,632	15.4
1978	3,333,279	15.3
1979	3,494,398	15.9
1980	3,612,258	15.9

     Fifty years after the decline in births was 2012. That's about when the number of Social Security disability claims started going down. Also, by that time, the oldest of the baby boom generation had aged out of Social Security disability because they had hit full retirement age. Maybe there were just fewer people in the most disability prone age group.
     There's reason to believe that this demographic change has something to do with the decline in Social Security disability claims. However, demographics can't fully explain the rapid rise then 32% fall in the number of disability claims. The change in the birth rate in the 1960s wasn't anywhere near that dramatic.

Could Some Of It Be Discouragement?

     I don't have any charts or data to support or undermine this theory but I wonder if some of the change is discouragement -- claimants who delay filing disability claims either because they feel they won't be approved or because they find the process of filing a claim to be too daunting.
     People who stop work on account of illness or injury don't just rush in to file disability claims right away or, at least, few do so. There's usually a gap of at least a few months before they file a claim. It's not unusual for the gap to be years. Does the median gap between onset of disability and the date of filing a Social Security disability claim change over time?
     Those who are considering filing a disability claim often ask "Do I have a chance?" I think people ask the question because they're afraid of being crushed by a denial. My theory is the general fear of denial is affected by the political zeitgeist. If I'm right, people thought that the chances of success with a Social Security disability claim went down after the 2010 election put Republicans in control of the House of Representatives who started pressuring Social Security to deny more claims. I know that before that election I often heard clients say things like "If Social Security approved that lazy guy down the street, why haven't they approved me?" I don't hear that sort of thing so much today. I think it's because people now perceive that it's more difficult to be approved. That's true to some extent but not enough that people should be discouraged about filing a claim. Sitting around doing nothing as one's financial situation crumbles is a bad idea but most disabled people have very mixed emotions about filing a disability claim. It doesn't take much to cause many of them to delay filing a claim based upon a vain hope that their medical condition will improve.
     People may also be discouraged by the increased difficulty in actually filing Social Security disability claims. It became much harder to get through to the agency on the telephone after the 2010 election. The agency's budget suffered. Wait times on the 800 line and at the field offices soared. Yes, it's possible to file some disability claims online but it's a lot harder than filing a retirement claim and you can't file an SSI claim online. On the whole, I'm pretty sure that disability claimants have a harder time filing any kind of claim online than retirement claimants. Disability claimants have, on average, less education, fewer computer skills and greater psychiatric difficulties interfering with their ability to use online resources. Disabled people usually have very mixed emotions about filing disability claims. It doesn't take much to discourage them because they keep hoping they'll get better.
     I would like to see numbers on how the median difference between alleged onset date and claim date has changed over the years. I suspect the gap went up substantially after 2010. Perhaps the data would support my theory. Perhaps not.

In Summation, I Don't Know And I Don't Think Anyone Else Knows

     I wish I had a good explanation for what has happened and what is happening. If anything, I may have somewhat knocked down the theory that it's the unemployment rate without being able to substitute an alternative theory that fully explains what has happened. I'd be interested in the theories that others have. Please give data to support your theories.

A Good Response

     From the Center for Economic and Policy Research:

At a time of unprecedented inequality, the Washington Post is quick to seize on the country's real problems: a Social Security disability program that is too generous. ...

Just to get some orientation, the benefit that the Post considers to be too generous averages $1,170 a month. ...

The concern about the low employment rates (EPOP) in the United States is reasonable, but it bears no obvious relationship to the Social Security disability insurance program. The EPOP for prime age workers (ages 25-54) has fallen by almost four percentage points since 2000, with no increase in the generosity of the disability program. In fact, if we combine the number of workers receiving disability and workers compensation, there has been little change in the share of the working age population receiving benefits over this period.

In fact, the United States ranks near the bottom of OECD [Organization for Economic Cooperation and Development, a major international body] countries in the generosity of its benefits, yet it also ranks near the bottom in the employment rate for prime age workers. In its most recent data, the OECD put the EPOP for prime age workers in the United States at 78.2 percent. This compares 83.3 percent for the Netherlands, 84.2 percent for Germany, and 86.0 percent for Sweden, all countries that spend considerably more money on disability benefits than the United States. ...

Researchers Find Little Evidence For Link Between Disability Insurance Benefits And Decline In Labor Force Participation By Those With Work Limitations

     The abstract of Reconciling Findings On The Employment Effect Of Disability Insurance by John Bound , Stephan Lindner and Timothy Waidmann in the IZA Journal of Labor Policy:

Over the last 25 years, the Social Security Disability Insurance Program (DI) has grown dramatically. During the same period, employment rates for men with work limitations showed substantial declines in both absolute and relative terms. While the timing of these trends suggests that the expansion of DI was a major contributor to employment decline among this group, raising questions about the targeting of disability benefits, studies using denied applicants suggest a more modest role of the DI expansion. To reconcile these findings, we decompose total employment changes into population and employment changes for three categories: DI beneficiaries, denied applicants, and non-applicants. Our results show that during the early 1990s, the growth in DI can fully explain the employment decline for men only under an extreme assumption about the employment potential of beneficiaries. For the period after the mid-1990s, we find little role for the DI program in explaining the continuing employment decline for men with work limitations.

Should The Government Be Double-Dipping?

     A high percentage of people who apply for Disability Insurance Benefits under Title II of the Social Security Act also apply for disability benefits under Supplemental Security Income (SSI). SSI benefits are already reduced for the receipt of unemployment insurance benefits. Would it be appropriate to offset the Title II and the SSI benefits for the receipt of the same unemployment insurance benefits? Wouldn't this be, dare I say it, double dipping by the government? If the government isn't allowed to double dip, aren't the estimates offered by Social Security's Actuary off considerably?
     If Social Security has to figure out a way to avoid double dipping, which isn't going to be easy, don't the implementation costs become substantial? The SSI reduction for unemployment benefits isn't necessarily dollar for dollar. There's no point trying to explain it here because it's complicated but usually, not all the unemployment benefits will be offset in computing SSI, just most of them. I think the Actuary needs to take another look at this and assume that there will be no double offset and to try to compute in the costs of administering an offset for unemployment benefits.
     Don't blow off the costs of implementation as a factor in this. Some years ago, in order to save money, Congress forced Social Security to pay out larger amounts of back SSI benefits in up to three installments. I think everyone who knows anything about SSI knows that this provision has cost far more money to implement than it ever saved. An unemployment insurance offset could be at least as complicated to administer as the windfall offset which I wouldn't dare to try to explain here. Can anybody at Social Security tell us how much it costs to administer the windfall offset? I'm just guessing but maybe a quarter of a billion to a half billion per year but, seriously, can anyone tell us?

Actuary Estimates Effects Of UI Offset

     From a March 4, 2014 letter from Stephen Goss, Social Security's Chief Actuary, to the Office of Management and Budget:

I am writing in response to your request for estimates of the financial effects on Social Security of a proposal, included in the President’s FY 2015 Budget, to reduce Social Security Disability Insurance (DI) benefits, dollar for dollar, for any month in which a disabled-worker beneficiary receives unemployment insurance (UI) payments. ... 

We estimate that enactment of this proposal in January 2015 would reduce DI benefit payments by $ 2.67 billion in total for calendar years 2015 through 2024, assuming the DI benefit reduction applied for UI claims with payments starting in August 2016 or later (see enclosed Table 1) . Reduction in DI benefit payments through the end of Fiscal Year 2024 would be $2.57 billion (see enclosed Table 2). The proposal specifies that the DI offset would apply for UI claims with payments starting in months beginning at least 18 months after enactment. For the long-range actuarial status of the overall OASDI program, we estimate that enactment of the proposal would reduce the actuarial deficit by about 0.01 percent of taxable payroll. ...

     There are at least a couple of problems with this estimate. First, it doesn't factor in the not inconsiderable costs of implementation which will significantly reduce the value of this offset. $2.67 billion is a huge amount of money but it's spread over 10 years. The costs of implementation over the course of 10 years could easily be a billion dollars or more. Nobody ever considers the costs of implementing this sort of proposal. Second, many states already have an offset running in the opposite direction. What will be done about them? Will it be like workers compensation where Social Security doesn't offset if the state does? If so, that dramatically reduces the amount that Social Security can offset. And if you're adopting this offset, is it appropriate to limit it to disability recipients? Shouldn't it also apply to retirement and survivor benefit recipients? There would be a lot more money to offset there. Adopting this offset won't be nearly as simple a matter as OMB and the Chief Actuary seem to think.

Unemployment Has Little Effect On Number Of Disability Claims

     From a press release issued by the Columbia Business School:

With millions of Americans' unemployment benefits expiring, and as the Social Security Administration comes under increasing pressure to reform its financially-troubled entitlement program, policymakers are asking whether a significant amount of Americans are bilking disability benefits from federal coffers. A new study from Columbia Business School sheds light on the answer. ...

"Contrary to the beliefs of many, even in policy circles, our research proves that the unemployed do not directly file for disability following the exhaustion of benefits," says Columbia Business School Professor Andreas Mueller, who helmed the study. "The evidence is just not there. As a matter of fact, fewer than 2% of workers whose unemployment benefits had expired actually applied for disability insurance."  ...

The research reveals that expiring unemployment insurance does not cause a spike in SSDI. In fact, all of the analyses show a 2% or smaller correlation between the number of workers whose unemployment benefits had been exhausted and the number of those who applied for disability insurance. Even in states that had a lengthy unemployment extension period, Mueller and his co-authors did not observe a significant drop in disability insurance applications. ...

"Although we cannot rule out small effects , the takeaway here is we can conclude that there is no convincing evidence that workers whose unemployment benefits have expired apply for disability insurance on a large scale," says Mueller. ...

     Many people envision disability as an either or thing that happens suddenly. Either you're disabled or you're not disabled and when it happens, you know right away. Most of the time, though, it's not that way. It's not a sudden stroke or automobile accident that disables a person but a slow deterioration, caused by something like diabetes or arthritis.  The worker keeps trudging in to work until he or she slowly comes to the conclusion that they just can't do it anymore. In this common situation, events and circumstances not directly related to the worker's health can affect the timing of the worker's exit from the labor market. The attitude of the employer can make a huge difference. Some employers try to accommodate their ailing employees. Some try to force them out.  If you think the Americans with Disabilities Act (ADA) made any real difference, you're naive. The ADA is beloved inside the Washington Beltway but a dead letter everywhere else.Of course, layoffs can make a difference at the margins. Some employees who are heading toward disability get laid off. The layoff may hasten disability claims or delay them by giving people an income from unemployment benefits. It's all at the margins and nothing to get excited about unless you're trying to make political points.

Differing Proposals On Unemployment Benefits And Disability

     From a piece in U.S. News & World Report (they're still in business?) by Chad Stone:

The other major policy issue that derailed the emergency [unemployment] benefits program was a proposal to curtail the joint receipt of unemployment insurance and disability benefits. Reid included a proposal from President Obama's budget to do that. Sen. Rob Portman, R-Ohio, had his own proposal, which he said would merely "[end] double-dipping between unemployment and disability benefits," and that it's "in the president's budget." As my CBPP [Center for Budget and Policy Priorities] colleague Paul Van de Water points out, however, the Portman proposal would go well beyond merely ending "double-dipping" and is far different from the president's proposal.

To receive disability benefits, an applicant must have a severe impairment that has prevented him or her from engaging in "substantial gainful activity," defined as earning more than $1,070 a month, for at least five months. In other words, it allows a recipient to work a modest amount, and thus be exposed to a job loss that would legitimately qualify the recipient for unemployment insurance.

The Portman proposal would define receiving unemployment insurance as a substantial gainful activity that, as Van de Water explains, would not only prevent people from receiving both benefits simultaneously – what Portman calls "double-dipping" – but would also delay eligibility for both disability and Medicare for some people with serious disabilities and hasten benefit losses for others. 

The Reid/Obama proposal is quite different from Portman's – and far preferable. It would eliminate "double-dipping" by reducing disability benefits dollar-for-dollar by the amount a person receives in unemployment benefits. In effect, a person who was legitimately eligible for both sets of benefits could receive the higher of the two – but not both.

Unemployment Offset Stalled -- For Now

     At the moment the bill to extend emergency unemployment benefits is stalled in the Senate. Even if the Senate could pass the bill, it faces an uncertain future in the House of Representatives. The Senate bill included a new offset that would reduce Disability Insurance Benefits under Title II of the Social Security Act by any unemployment benefits received. Even if the bill to extend emergency unemployment benefits cannot be revived, there's a good chance that the unemployment offset will come to Social Security eventually. It would save only a small amount of money, it would be difficult to implement and its fairness is debatable but the proposal has great superficial appeal and few opponents.

Offsetting Disability Benefits For Unemployment Benefits

     Michael Hiltzik at the Los Angeles Times doesn't like the idea of reducing Social Security disability benefits because of the receipt of unemployment insurance benefits. As he points out, this would only estimated to save $100 million a year. That estimate almost certainly doesn't include the cost of implementation. The cost of implementing new Social Security provisions is never taken into consideration. There's also the problem of state laws that run an offset in the opposite direction potentially subjecting a claimant to double offsetting.

And You Thought That Sequestration Was Almost Over

     From Politico:

Senate Democrats are coming together on a proposal that would pay for a revival of emergency unemployment benefits through the fall by extending the sequester for one year, senior Democratic aides said.

Republicans are demanding that any extension of unemployment insurance be paid for and, in turn, Democrats are pitching an extension of the sequester’s mandatory savings through 2024. Along with a crackdown on people who draw both disability and unemployment benefits, the proposal would raise roughly $18 billion and fund an extension of an expired unemployment benefits through November.

     Why in the name of God would Democrats be pushing for sequestration through 2024?

Unemployment Benefits And Social Security Disability

     Wonkblog at the Washington Post decided to look into the question of whether people who are about to lose their unemployment insurance benefits will go on Social Security disability benefits and finds plentiful evidence that that hasn't happened in the past. The article, unfortunately, goes on to discuss the theory that because job openings aren't as plentiful now as they used to be that Social Security has to approve more disability claims, a theory that cannot hold water since the Social Security Act says that the availability of job openings is completely irrelevant in the determination of disability but, hey, that theory sounds plausible if you've never read the Social Security Act and you don't bother to talk with anyone who has.

Unemployment And Disability Claims

     Social Security's Office of Inspector General (OIG) has issued a report on Impact of Increases in State Unemployment Rates on the Social Security Administration’s Disability Programs. This subject could certainly use research. Unfortunately, OIG merely looked at states with high percentage increases in unemployment. There is no comparison of these states to states with low or no increase in unemployment over the same time period. There is this table in the report:

     Alabama, by the way, had a much larger increase in unemployment than Utah.

WSJ On Unemployment And Disability

     From the Wall Street Journal's Economy Stream Blog:

The sharp rise in federal disability rolls in recent years has sparked worry that able-bodied workers are using the system to hide from the weak job market. But new research suggests those fears may be overblown. ...

University of California, Berkeley economist Jesse Rothstein set out to test [that] theory. He reasoned that if the increase [in disability claims] is being driven by unemployed workers gaming the system, there ought to be a correlation between expiring jobless benefits rising disability claims. After all, there’s no need to file for disability insurance — often a long, involved process — if you can still draw an unemployment check.

When Mr. Rothstein looked at the data, however, he found no such correlation. When the unemployment rate started rising in 2008 and 2009, the government extended unemployment benefits, leading to a drop in the number of people exhausting their payments. Yet the number of people filing for disability kept on rising. In more recent years, the government has cut back unemployment benefits, leading to an increase in expirations, but the number of disability applications has remained flat or even slowed. ...

Federal disability rules allow workers to get benefits only if they have an “impairment” that prevents them from working. But Mr. Rothstein notes that the ability to work isn’t necessarily independent of the labor market.

A construction worker who hurts his back, for example, might be able to get a desk job during good economic times; when unemployment is high, however, making such a career switch could be much harder. Moreover, companies are much more likely to make accommodations for existing workers who become disabled than to hire a disabled worker — so a person with a disability who loses a job might well struggle to find a new one.

Mr. Rothstein says his findings suggest that “really what’s going on is that there are people who are disabled who may in good markets be able to get jobs but in difficult market can’t.”

Have To Ask The Question

     If it's a form of discrimination for an Administrative Law Judge (ALJ) to deny disability claims because claimants have received unemployment insurance benefits, why is it that Social Security provides information to ALJs showing which claimants have been receiving unemployment insurance benefits?

ALJ Attitudes About Unemployment Benefits And Workers Compensation May Be Bias

     From Social Security Ruling 13-1p to be published in the Federal Register tomorrow: "Possible examples of allegations that the Appeals Council will refer to the Division of Quality Service include, 'the ALJ is biased against claimants who receive workers compensation benefits or unemployment benefits' and 'the ALJ shows prejudice toward women'.”

Unemployment Benefits and Disability

     From Overlapping Disability and Unemployment Benefits Should be Evaluated for Potential Savings, a Government Accountability Office (GAO) study:

In fiscal year 2010, 117,000 individuals received concurrent cash benefit payments from the Disability Insurance (DI) and Unemployment Insurance (UI) programs of more than $850 million, which is allowable in certain circumstances under current program authority. While these individuals represented less than 1 percent of the total beneficiaries of both programs, the cash benefits they received totaled over $281 million from DI and more than $575 million from UI. ...

Under certain circumstances, individuals may be eligible for concurrent cash benefit payments due to differences in DI and UI eligibility requirements. Specifically, the Social Security Administration’s (SSA) definition of a disability involves work that does not rise to the level of substantial gainful activity (SGA). In 2010, a monthly income of $1,000 or more for a non-blind beneficiary generally demonstrated SGA. In contrast, the Department of Labor allows states’ determination of “able and available for work” eligibility criteria for UI benefits to include work that does not rise to the level of SGA. ... Reducing or eliminating overlapping or improper payments could offer substantial savings, though actual savings are difficult to estimate because the potential costs of establishing mechanisms to do so are not readily available.

Another Think Tank Report On Social Security Disability

     The think tanks are really churning out reports on the Social Security disability programs. The latest comes from  Kathy Ruffing of the Center on Budget and Policy Priorities. Her report includes this interesting chart:

     Claims filed are highly sensitive to business cycle? Note that applications for disability benefits began soaring not in 2008 when unemployment soared but in 1998, ten years earlier, at a time of relatively low unemployment. Note also the inverse relationship between unemployment and the disability claim rate in the early 1980s. How do you explain these facts if claims filed are so sensitive to business cycles?

Unemployment Benefits And Social Security

     Stephan Lindner and Austin Nichols at the Center for Retirement Research at Boston College have done a study, dealing, in part, with the effects of receipt of unemployment benefits on Disability Insurance Benefits claims at Social Security. The result, which is no surprise to me, is that the receipt of unemployment benefits decreases Disability Insurance Benefits claims.
     What I have observed is that many people delay, delay, delay in filing claims for Disability Insurance Benefits. They make do with whatever other income they can find and only apply for Social Security disability benefits when they are near the end of their rope. I think the reason in most cases is an unwillingness to accept that they are disabled -- people tend to have unrealistic recovery hopes -- and because the prospect of dealing with the Social Security Administration is too daunting. As an attorney who represents Social Security claimants, I then have to tell people who are desperate for income and medical care that they are starting a process that may take two years with an outcome which cannot be reliably predicted.