Busting Disability Myths

October 28, 2015

The New York Times recently posted a great column about the myths of Social Security Disability.  Excerpted in part to say:

It is not easy to go on disability. About 60 percent of applicants for disability benefits are turned away.

In fact, it can be very hard to qualify for disability. Of the nearly 40 percent of applicants who are accepted, more than half are initially rejected and have undergone additional scrutiny of their claims before receiving any benefits.

It is not easy to fake a disability. People who worry about fraud tend to worry that some disabilities, including back problems and depression, are not easy to see. That doesn’t mean they are being faked. Besides, many physical disorders – which are the main cause of disability for the vast majority of people – are plainly visible. Similarly, many mental disorders that lead to disability are clearly debilitating for their sufferers, including bipolar disorder, schizophrenia and disorders associated with brain disease or damage.

If people on disability were faking it, they wouldn’t have such high death rates. People on disability are three to six times more likely to die than people in their age group who are not on disability.

Disability claims are not skyrocketing. Rather, the population most likely to go on disability, those aged 50 to 64, is growing. The potential disability population is also larger now than in the past because today’s older women are more likely to have worked enough to qualify for disability than in earlier generations. Demographic pressures have already begun to subside. Adjusted for demographic factors, the share of workers on disability has gone from slightly below 4 percent in 2000 to slightly above 4 percent in 2014.

A person entering the work force today has a one in three chance of dying or qualifying for disability before retirement age. The possibility of fraud does not diminish the odds of upstanding citizens needing help. The disability system deserves everyone’s support.

I spent a great weekend in St. Petersburg Florida with a group of individuals dedicated to representing claimants before the Social Security Administration.  This conference was a pure “networking” conference, which is different from other conferences I’ve attended in the past, which focused on education.  At past conferences, I’ve frequently noted that much of my “education” comes from the discussions I’d have over meals or between sessions (hallway chats, I think of them as).  This conference was freeing in that the sole focus was to foster those types of hallway conversations.

I met so many new people and will look to them for advice when challenges present themselves, as I hope they will look to me.

 

  1.  How much you are paying in. Most workers contribute 6.2 percent of their paychecks to the Social Security system, and employers match that amount. Self-employed workers pay 12.4 percent of their income into the system. The Social Security tax applies to earnings of up to $118,500 in 2015. Earnings above this amount are not subject to Social Security tax or factored into retirement payments.
  2. The age to sign up. You can sign up for retirement benefits beginning at age 62, but payments are reduced if you sign up before your full retirement age, which is 66 for most baby boomers and 67 for everyone born in 1960 or later. Your monthly payments will increase if you delay signing up past your full retirement age. However, after age 70 there is no additional boost in payments if you wait to claim Social Security. “Assuming you have normal health, try to claim Social Security as close to 70 as you can,” says Alicia Munnell, director of the Center for Retirement Research at Boston College.
  3. How much you will receive. Social Security payments are calculated using the 35 years in which you earn the most. If you don’t work for 35 years, zeros are factored into the calculation. You can get a personalized estimate of your future Social Security payments at various claiming ages by creating a My Social Security account online at ssa.gov/myaccount and logging in to view your Social Security statement. These statements also list your earnings history and taxes paid, which you can check for errors. Paper Social Security statements are mailed to most workers who don’t have My Social Security accounts about once every five years.
  4. What happens if you become disabled. “We started off with just a retirement program, and then in 1939 we added survivors benefits and in 1956 we expanded to include people with disabilities,” says Carolyn Colvin, Acting Commissioner of the Social Security Administration. If you develop a physical or mental impairment that is expected to prevent you from working for a year or more, you may qualify for disability payments. Your Social Security statement will list an estimate of your monthly payments if you become disabled. You may need to provide documentation about your condition and why it will prevent you from working.
  5. How much your family will get if you pass away. Social Security also functions as life insurance for workers who prematurely pass away. Children ages 19 and younger who are in school, disabled children and a spouse caring for children younger than age 16 will each be eligible for monthly payments from Social Security, which are subject to a maximum amount the entire family qualifies for. Your Social Security statement will list how much your family members are likely to receive if you die. “Social Security is designed to insure against lost wages,” says Eric Kingson, a professor of social work at Syracuse University. “The premium that we pay is designed to insure against risk.”

From NBC News:

Social Security has more than its share of critics, but over the years it has managed, at least, to provide a special cushion for some women.  Because women in the past were less likely to work and tended to accumulate less in Social Security benefits, married women have disproportionately benefited from the spousal benefit, which entitles them to as much as half of their partner’s Social Security benefit. And because women tend to outlive men, they are more likely than their husbands to receive Social Security survivors’ benefits.  But that gender gap is closing, according to recently published research from the Center for Retirement Research at Boston College.

As women’s labor force participation and earnings increase, more and more female retirees will receive benefits based on their own working record, and fewer of them will be eligible for only auxiliary benefits, based on their husbands’ working history,” the researchers found.

Women in the workforce
The shift in women’s labor force participation has been dramatic. When the cohort of women born between 1931 and 1935 were between 24 and 35 years old, just 37 percent of them worked. But when Generation X women born between 1966 and 1975 were that age, 75 percent of them did, according to earlier work by the researchers. As a result, they project that while 44 percent of the older cohort received Social Security benefits based on their own work history, some 75 percent of the Gen X cohort will.

The mass movement of women into the workforce is affecting how many of them will receive spousal Social Security benefits. Some 56 percent of the women born between 1931 and 1935 received these benefits, either as their only benefit or as an addition to their own Social Security benefit. For Gen X women born between 1966 and 1975, just 25 percent are expected to receive spousal benefits as their sole benefit or as a supplement to their own.

Women are “more likely to receive some benefit on their own work history,” though they continue to receive some help from spousal benefits, said Joan Entmacher, vice president for family economic security at the National Women’s Law Center.  At the same time, the marriage rate has been decreasing. Some 84 percent of the women born between 1931 and 1935 were married at ages 25 to 34, and almost 70 percent of them were married at ages 55 to 64. But for women born between 1966 and 1975, fewer than 60 percent were married at ages 25 to 34 and the researchers expect that rate to drop to 56 percent at ages 55 to 64.

That shift is leaving fewer women eligible to receive a spousal benefit, or the survivor’s benefit available to spouses who outlive their partners.  “The declining marriage rate is much more detrimental to women in Social Security than men,” Entmacher said. “They earn less, they live longer, and they are much more likely to be single parents,” which makes it harder to work full time and put away money for later in life.

 

 

“Women still don’t earn as much as men,” said April Wu, an author of the Center for Retirement Research paper who is now a researcher at Mathematica Policy Research. “There are still 25 to 30 percent of women benefiting from those provisions.” The spousal and survival benefits, Wu said, “have important implications for women’s retirement security.”

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