Allowance rates remain higher at the ALJ stage than at the initial stage, however. This is partly because ALJs often see claimants whose condition has deteriorated in the 18 months or so since their application was turned down and whose application is better documented typically with the help of an attorney than at the DDS stage.
SSDI beneficiaries are mostly older and have severe physical or mental impairments. The typical SSDI beneficiary is in his or her late 50s — 75 percent are over age 50 , and nearly 35 percent are 60 or older — and suffers from a severe mental, musculoskeletal, or other debilitating impairment. Physical disorders dominate among beneficiaries age 50 or older. Mental disorders — including intellectual disability formerly called mental retardation , mood disorders such as bipolar disease and severe depression, organic mental disorders associated with brain disease or damage, psychotic disorders such as schizophrenia, and other mental impairments — account for half of beneficiaries under age SSDI beneficiaries experience high death rates.
Many die within a few years of qualifying for SSDI. People with limited education are much likelier to collect SSDI.
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Thus, people without a college degree are far more likely to collect SSDI. Disability beneficiaries exhibit a distinct geographic pattern. States with low high-school completion rates, more older residents, few immigrants, and a blue-collar industry mix tend to have more SSDI beneficiaries.
Isolated pockets with unusually high rates of receipt are extreme outliers.
Many SSDI beneficiaries are poor. Poverty rates are about twice as high for SSDI beneficiaries as for others — even including their benefits. Overall, about one-fifth of all disabled-worker families are poor; without SSDI, nearly half would be.
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SSDI beneficiaries have limited work capacity. SSDI applicants typically suffer a sharp drop in earnings before turning to the program. The most severely impaired — who are awarded benefits — seldom work afterward. Although SSDI allows beneficiaries to supplement their benefits through work, few are able to do so.
Beneficiaries may earn unlimited amounts for a nine-month trial work period and a subsequent three-month grace period before benefits are suspended. Even then, they may return to SSDI if their earnings fall. Of beneficiaries who were tracked for ten years after qualifying, only about 28 percent did any paid work, 7 percent had benefits suspended for at least one month because of work, and 4 percent had benefits terminated because of sustained work.
One careful study found that only one-fifth of beneficiaries aged 45 to 64 — and only about half of rejected applicants — had any earnings two years after application, and even fewer had significant earnings.
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SSDI costs have leveled off, but the program faces a long-run funding gap. SSDI costs have stabilized as the baby boomers move from their peak disability-prone years to their peak retirement years. Disabled workers are converted to retired workers at the full retirement age — currently 66 and scheduled to rise to 67 — and the oldest baby boomers are fast reaching that milestone. Though the SSDI trust fund has enough funding for more than three decades, policymakers must address overall Social Security financing before then. SSDI benefits are modest. Most beneficiaries — especially unmarried ones — rely on SSDI for most of their income.
SSDI benefits replace about half of past earnings for a median beneficiary. Most other advanced countries spend more than the United States on disability benefits. The Organisation for Economic Co-operation and Development OECD reports that the United States has some of the most stringent eligibility criteria for disability benefits among advanced economies.
OECD statistics confirm that, as a corollary, the United States spends less on disability benefits as a share of the economy than most other advanced countries. That has impaired customer service by increasing wait times at field offices and on the phone. Another consequence of the cuts is that about , people await a final decision on their application for SSDI — after paying into Social Security their entire career — or their application for disability benefits from the Supplemental Security Income program.
They wait an average of about a year and a half for decisions on their appeals. Introduction Social Security Disability Insurance SSDI , an integral part of Social Security, provides modest but vital benefits to workers who can no longer support themselves due to a serious and long-lasting medical impairment. By Georges Casamatta , Helmuth Gremer , A Positive Theory of Social Security.
Promoting Economic Growth through Social Security Reform
Copy URL. Abstract Population aging puts significant pressure on social security systems that are based mainly on a pay-as-you-go PAYG formula and determined by the political process in which both retirees and future retirees participate. Register to save articles to your library Register. Paper statistics. Pension Risk Management eJournal Follow. Shantaram P.
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