Social Security Disability Claims Spike, Raise Insolvency Concerns

A spike in <"">Social Security disability claims is threatening the health of the system. The problem is due, in part, to aging, out-of-work baby boomers whose claims into the Social Security disability program have increased almost 50 percent in the past 10 years alone.

With people with disabilities unable to find new work in an ailing economy, applications for relief are rising, said The Huffington Post. Benefit delays are rampant, as well, with a backlog of those applying, leaving many waiting two years for their cases to be resolved. The program has long run on a deficit.

Congress estimates that the trust fund that supports the Social Security program will be defunct by 2017, which means that benefits will not be paid, said The Huffington Post, which noted that Congress must take some action and take it soon.

Complicating issues, the larger Social Security retirement fund is also expected to run out. Proposals have been presented for everything from raising the retirement age to implementing “means-testing benefits” for retirees with wealth, said The Huffington Post. Proposals have been limited for the disability system, which is said to be in considerably worse state.

Social Security’s trustees are asking Congress to reallocate monies from the retirement program, as was done in 1994, for some immediate relief, which will likely further hurt the retirement arm of the program. “It’s primarily economic desperation,” Social Security Commissioner Michael Astrue said in an interview, wrote The Huffington Post. “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,” added Astrue. The aging population is adding to the growing problem as is the system, known to encourage applications for disability versus waiting for retirement, noted The Huffington Post.

Although Congress implemented tougher qualifications in the 1970s, resulting in a decline in benefit payouts, the criteria were since relaxed. Charles Blahous, one of the Administration’s public trustees said the disability program “got into trouble first because of liberalization of eligibility standards in the 1980s…. Then it got another shove into bigger trouble during the recent recession,” The Huffington Post reported.

Compounding problems, while some people legitimately seeking disability payments are waiting for years to receive benefits, some receive benefits inappropriately. For instance, in 2010, Social Security discovered $1.4 billion in overpayments to disability beneficiaries, most to people who no longer qualified as they were again working, said a report issued by Congress’ investigative arm, the Government Accountability Office, explained The Huffington Post. Meanwhile, two-thirds of initial applications into Social Security are rejected and the appeals process can take years to maneuver.

According to The Huffington Post, this month’s deficit reduction package will enable Congress to increase Social Security’s budget by $4 billion over the next 10 years, with that money to be put toward identifying those who receive, but no longer qualify for disability benefits. The Congressional Budget Office believes the measure will save about $12 billion over the same ten years.

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