Social Security Disability Insurance For Workers With Disabilities

Sharing is caring!


It is estimated that almost 1 in 6 American citizens that are of working age (that equates to some 29.5 million workers) has some sort of disability. As a result of this, these individuals are much more likely to experience some sort of financial hardship in comparison to those that are without a disability / disabilities. Although the vast majority of disabled individuals are able to work, they do face certain challenges that those people without a disability / disabilities do not have to face. Additionally, those people with really severe or long lasting disabilities usually are unable to work at all and so can either find themselves in or be particularly vulnerable to real financial hardship. 


For approximately 12 million individuals that have a disability / disabilities Supplemental Security Income and Social Security Disability Insurance provide something of a critical lifeline. Both these things are components of the wider social security system in the United States of America. Although fairly modest, the assistance that these things provide means that the most severely disabled in the country are able to live a life that is relatively independent, whilst also being able to keep a roof over their head, food on their table, and being able to pay for much needed medication


What number of Americans currently receive some sort of social security disability benefit?


There are said to be roughly 8.8 million individuals in the United States of America receiving disability insurance. The exact amount that a worker receives is dependent upon how much they were earning prior to becoming disabled. It is typically the case that the average disbaled worker has lower than half of their previous earnings replaced by disability insurance benefits. 


On average, the typical disabled American worker receives $1,129, with men receiving more at around $1,255 each month and women receiving $993 each month. Both spouses (around 160,000) and children (around 1.9 million) of diabsled workers also receive a supplemental benefit through the social security system – they each receive around $300 per month. If you are in one of these groups and feel as though you are not receiving the right amount of supplemental benefit, then get in contact with Ryan Bisher Ryan & Simons for help.


For the vast majority of disabled individuals that receive social security disability benefits, these payments make up either all or most of their monthly income. With the modest way in which these benefits cover lost earnings, disabled individuals are typically unable to maintain the same standard of living that they previously had prior to being disabled. Insurance offers a floor that works to moderate an individual’s fall in standard of living


There are roughly 4.9 million adults in the United States of America that are not elderly and receive supplemental security. Around one third of these receive disability insurance benefits as well. This large group of people receive $525 each month, although this is usually the only income that they are receiving. 


Those individuals that do receive some sort of social security disability benefit are also eligible to receive public health insurance. They are also eligible to receive Medicare, however, this is only the case after abiding by a waiting period of two years. In the vast majority of states in America, those individuals who are in receipt of supplemental security are also eligible to receive Medicaid. That being said, some states have much more restrictive criteria in place for being eligible for this service.


How are social security disability benefits funded?


Social security disability benefits are primarily funded through the contributions gained through payroll tax from both employers and employees. Each and every worker in the United States of America pays 0.9 percent on the first $113,700 of their wages to these benefits. The same amount is also true of employers. Federal income tax, along with various other federal reserves, are other ways in which social security disability benefits are funded. 


Social security disability benefits are administered by the United States Social Security Administration. It is the job of state based agencies that are known as disability determination services to decide whether or not an individual is disabled and meets their standard. These agencies are funded federally and so must follow all federal guidelines when coming to these decisions.


What are social security disability benefits?


These benefits are for American workers that are severely disabled or have severe conditions that prevent them from working. The impairment of the individual must be so severe that they are unable to do the work that they used to previously do or to perform any other type of meaningful work that there currently is out there on the job market. 


In order to determine if an individual is severely disabled enough, evidence must be provided that demonstrates their level of disability or impairment. This evidence must come in the form of a medical review performed either by a doctor, medical practitioner, or medical specialist. Unfortunately, evidence from healthcare workers, such as nurses or social workers, is not considered to be of good enough quality to determine the severity of an individual’s disability or impairment. Similarly, evidence in the form of statements from the individual themselves, loved ones, colleagues, or other contacts will not stand up in a court of law. 


The vast majority of applications for social security disability benefits are denied due to the fact that the standards of being eligible are so strict. This means that even workers that have very significant impairments or disabilities do not get these benefits. It is estimated that only 40 percent of all applications made in the United States of America for social security disability benefits are approved, thus meaning that the other 60 percent are not approved. Given the fact that some very diasbled and / or impaired individuals are denied access to these benefits is testament to how strict the standards are. In fact, it is estimated that of the 60 percent of people who are denied access to social security disability benefits, around 70 to 80 percent of them do not go into meaningful paid employment or paid employment at all. 


The standards of qualifying for these benefits is, in fact, so high that many of the individuals that do receive them go on to die as a result of their condition. The latest figures show that within a 5 year time period after being accepted to receive benefits, some 1 in 6 women die and some 1 in 5 men die. The death rate for these individuals is about three times greater than that of those individuals who were denied social security disability benefits.


What are the requirements to receive social security disability benefits?


To be eligible to receive social security disability benefits, a person must have been in paid employment for a minimum of a fourth of their adult life and during a period of a minimum of 5 of the last 10 years prior to becoming diabled or impaired. In addition to these things, there is also a 5 month period that an individual must wait in order to be able to qualify for these benefits. 


For disabled workers that have a minimal income, very few assets, or do not have a long enough work history, then there are other certain benefits available. This covers, for example, women who have worked and paid into the system, but took time out of work to give birth and look after their children or to provide care to a loved one, such as a parent. 


In order to apply for social security disability benefits, an individual must have applied for and exhausted all of the other options that are available to them in the first instance. This way, they act as an option of real last resort for those individuals with severe disability or impairment and very little / no ability to work.


How has the number of people receiving social security disability benefits changed?


Over the past 20 years or so, there has been very little in the way of change in respect to the number of American adults receiving social security disability benefits. The most recent data shows that roughly some 2.4 percent of nonelderly adult workers receive these benefits compared with 2.1 percent of workers back in the year 1996, some 25 years ago. However, it is important to point out with this comparison that certain economic and demographic factors have not been taken into account which may have potentially increased the proportion of the nation’s population that could be eligible for social security disability benefits.


By simply controlling for income, the number of individuals on low incomes and of full working age receiving these benefits has actually gone down over the past 10 years or so. For instance, in the year 2011, the figures showed that for every 100 individuals on incomes that were below the poverty line then, there were 17.6 workers receiving social security disability benefits. This is in contrast to the 18.5 per 100 workers that were receiving the benefits all the way back in the year 1996. This goes to show that the number of people receiving these benefits has grown at a much smaller rate than the rate of growth of adults on incomes that are deemed to be very low. 


The percentage of workers receiving social security disability benefits has seen an increase over time. However, this is down to the following demographic factors:

  • Increase in female employment – with more women being in work nowadays, it means that there are more of them to apply for and be accepted for these benefits. For instance, since the year 1980 (41 years ago) the proportion of women receiving social security disability benefits has increased from 50 percent all the way up to 68 percent, meaning they now make up the vast majority of claimants.


  • An ageing population – as people grow older their risk of disability or impairment increases greatly. For instance, a person is almost 2 times more likely to have a disability of some sort or the other at the age of 50 than what they are at the age of 40. This doubles again as a person reaches the age of 60. Because of the ageing baby boom generation, the United States of America has a larger proportion of its workforce in their 50s and 60s, so many of these inevitably have disabilities or impairments. 


With these demographic factors being so pivotal it means that in order to be able to correctly assess the trend in social security disability benefits, it must be done by examining the rate whilst being adjusted for age and sex. This way the changes in age and sex that are so apparent nowadays are appropriately adjusted for. Looking at the adjusted rate, the current percentage of the workforce in America receiving social security disability benefits is 4.5 percent, whereas back in 1995 (26 years ago) it was 3.5 percent. 


What is the explanation for the shortfall in the Social Security Disability Insurance trust fund?


As previously explained, these benefits are funded through contributions made by both employers and employees in payroll tax. During the 1990s it was also estimated that there would be enough funds in reserve to be able to fund these benefits all the way through to the year 2016. From that date on, further funds would be required in order to avoid a shortfall from happening. 


These further funds are generated by reallocating, on a temporary basis, provisions from other trust funds that Congress controls, such as the Old Age and Survivors Insurance trust fund. Another way of generating funds is by increasing the level of payroll tax that companies and workers are forced to pay. An increase of as small as 0.2 percent can produce significant returns and be enough to plug any shortfalls that there may be, either now or in the future.