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WASHINGTON (AP) — Laid-off workers and aging baby boomers are
flooding Social Security’s disability program with benefit claims,
pushing the financially strapped system toward the brink of
insolvency.
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Applications are up nearly 50 percent over a decade ago as people
with disabilities lose their jobs and can’t find new ones in an
economy that has shed nearly 7 million jobs.
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The stampede for benefits is adding to a growing backlog of
applicants – many wait two years or more before their cases are
resolved – and worsening the financial problems of a program that’s
been running in the red for years.
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New congressional estimates say the trust fund that supports Social
Security disability will run out of money by 2017, leaving the
program unable to pay full benefits, unless Congress acts. About
two decades later, Social Security’s much larger retirement fund is
projected to run dry as well.
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Much of the focus in Washington has been on fixing Social
Security’s retirement system. Proposals range from raising the
retirement age to means-testing benefits for wealthy retirees. But
the disability system is in much worse shape and its problems defy
easy solutions.
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The trustees who oversee Social Security are urging Congress to
shore up the disability system by reallocating money from the
retirement program, just as lawmakers did in 1994. That would
provide only short-term relief at the expense of weakening the
retirement program.
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Claims for disability benefits typically increase in a bad economy
because many disabled people get laid off and can’t find a new job.
This year, about 3.3 million people are expected to apply for
federal disability benefits. That’s 700,000 more than in 2008 and 1
million more than a decade ago.
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“It’s primarily economic desperation,” Social Security Commissioner
Michael Astrue said in an interview. “People on the margins who get
bad news in terms of a layoff and have no other place to go and
they take a shot at disability,”
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The disability program is also being hit by an aging population –
disability rates rise as people get older – as well as a system
that encourages people to apply for more generous disability
benefits rather than waiting until they qualify for
retirement.
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Retirees can get full Social Security benefits at age 66, a
threshold gradually rising to 67. Early retirees can get reduced
benefits at 62. However, if you qualify for disability, you can get
full benefits, based on your work history, even before
62.
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Also, people who qualify for Social Security disability
automatically get Medicare after two years, even if they are
younger than 65, the age when other retirees qualify for the
government-run health insurance program.
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Congress tried to rein in the disability program in the late 1970s
by making it tougher to qualify. The number of people receiving
benefits declined for a few years, even during a recession in the
early 1980s. Congress, however, reversed course and loosened the
criteria, and the rolls were growing again by 1984.
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The disability program “got into trouble first because of
liberalization of eligibility standards in the 1980s,” said Charles
Blahous, one of the public trustees who oversee Social Security.
“Then it got another shove into bigger trouble during the recent
recession.”
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Today, about 13.6 million people receive disability benefits
through Social Security or Supplemental Security Income. Social
Security is for people with substantial work histories, and monthly
disability payments average $927. Supplemental Security Income does
not require a work history but it has strict limits on income and
assets. Monthly SSI payments average $500.
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As policymakers work to improve the disability system, they are
faced with two major issues: Legitimate applicants often have to
wait years to get benefits while many others get payments they
don’t deserve.
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Last year, Social Security detected $1.4 billion in overpayments to
disability beneficiaries, mostly to people who got jobs and no
longer qualified, according to a recent report by the Government
Accountability Office, the investigative arm of
Congress.
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Congress is targeting overpayments.
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The deficit reduction package enacted this month would allow
Congress to boost Social Security’s budget by about $4 billion over
the next decade to invest in programs that identify people who no
longer qualify for disability benefits. The Congressional Budget
Office estimates that increased enforcement would save nearly $12
billion over the next decade.
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At the same time, the application process can be a nightmare for
legitimate applicants. About two-thirds of initial applications are
rejected. Most of these people drop their claims, but for those
willing go through an appeals process that can take two years or
more, chances are good they eventually will get
benefits.
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Astrue has pledged to reduce processing times for applicants’
appeals, and he has had some success, even as the number of claims
skyrockets. The number of people waiting for decisions has
increased, but their wait times are going down.
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“It’s ludicrous to say that the backlog problem is getting worse,”
Astrue said. “The backlog problem has gotten dramatically
better.”
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Patricia L. Foster said she was working as a nurse in a hospital in
Columbia, S.C., in 2005 when she was attacked by a patient who was
suffering from a mental illness. Foster, 64, said she injured her
neck so bad she had a plate inserted. She said she also suffers
from post-traumatic stress disorder.
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Foster was turned down twice for Social Security disability
benefits before finally getting them in 2009, after hiring an
Illinois-based company, Allsup, to represent her. She said she was
awarded retroactive benefits, though the process was
demeaning.
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“I have to tell you, when you’re told you cannot return to nursing
because of your disability, you don’t know how long I cried about
that,” Foster said. “And then Social Security says, `Oh no, you
don’t qualify.’ You don’t know what that does to you emotionally.
You have no idea.”
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—
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Online:
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Federal disability programs: “text-decoration: none; color: #000066;” href=
“http://www.ssa.gov/disability/” target=
“-blank”>www.ssa.gov/disability/
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Congressional Budget Office projections: “text-decoration: none; color: #000066;” href=
“http://www.cbo.gov/doc.cfm?index=12375” target=
“-blank”>www.cbo.gov/doc.cfm?index12375
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Government Accountability Office report: “text-decoration: none; color: #000066;” href=
“http://www.gao.gov/products/GAO-11-724” target=
“-blank”>www.gao.gov/products/GAO-11-724
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