Disability Benefits Are Hard to Get — Even in Recessions

September 3, 2013 at 2:14 pm

We’ve noted before that economic downturns generally spur more applications for Social Security disability benefits — but have a much smaller effect on awards.  (See graph.)  That usual pattern is based on several decades’ worth of recessions and expansions.  And it seemed to be holding true in the Great Recession that officially began in late 2007.

Now the Social Security actuaries have confirmed what our earlier post implies:  allowance rates tend to fall in economic downturns.  That is, when the unemployment rate rises, the state and federal agencies that sift applications for disability benefits allow a smaller fraction of claims.

The actuaries found that the lag between rising unemployment and falling allowance rates is about two years — which makes sense, because workers typically exhaust other sources of support (including unemployment insurance) before applying, as a last resort, for disability benefits.

Another recent study found that in local areas where unemployment was higher, allowance rates were lower.  That, too, supports the general theme:  a sour economy boosts applications more than awards.

In short, the disability programs do a pretty good job of weeding out people who don’t meet the strict eligibility criteria.  Standards don’t become more lax in recessions, and stories that focus only on the growth in applications omit that crucial fact.

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More About Kathy Ruffing

Kathy Ruffing

Kathy Ruffing is a Senior Fellow at the Center on Budget and Policy Priorities, specializing in federal budget issues.

Full bio | Blog Archive | Research archive at CBPP.org

1 Comments Add Yours ↓

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  1. 1

    when I applied for my di benefits I was told I did not qualify due to not working for 5 years. well, I started working when I was 15. I think that instead of counting from 22 years and up it should go to when you actually started paying your di period. if this happened I would have di instead of ssi which is a lot of the reason di is really getting less reallocation. if I was able to receive my di, then my son who has bipolar disorder should still have his ssi as he was diagnosed under 19 years of age. tell me how can I help him get his ssi back since they took it away from him. he lost everything, his daughters, his son, his home, his life just about. now he has nothing. he needs his ssi back. tell me how to help him, since I can not get my di and am stuck on ssi instead.

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