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Studies Show Correlation between SSDI and Unemployment Claims

Written by Ankin Law Office

Is there a correlation between unemployment and social security disability claims? Two new studies show that there is a link between social security disability claims sought and the termination of unemployment benefits.  The studies, one of which was co-authored by a top economist for the White House, indicate that many people view social security disability as an extended unemployment program.

Specifically, a research paper submitted by White House Council of Economic Advisers Chairman Alan Krueger and Columbia Business School instructor Andreas Mueller, indicated that 10% of jobless workers age 50 to 65 with access to less than $5,000 were likely to file for disability benefits when their unemployment benefits expired, whereas 1% of such people sought benefits when they had 50 weeks of unemployed benefits left.

Another study that was conducted by a research economist with Boston College found that “jobless individuals are significantly less likely to apply” for disability when unemployment insurance is extended by Congress and “significantly more likely to apply when [unemployment payments are] ultimately exhausted.”

The Social Security Disability Insurance program (SSDI) is intended to provide financial support and health care benefits to individuals who are unable to work due to a serious medical condition.  Lately, however, there has been an increasing number of applicants for SSDI benefits who have moderate health issues, which may be a contributing factor to the growing backlog of claims pending with the Social Security Administration (SSA).

Some economists also fear that, because many recipients of social security disability benefits continue to receive such benefits until they quality for retirement benefits at age 65, this trend could potentially burden the social security disability system in the long-term.  There are currently 10.6 million Americans receiving social security disability benefits – a significant increase from the 7.2 million Americans who received disability benefits in 2002.

According to a recent Wall Street Journal article, Stephen Goss, chief actuary of the SSA, acknowledged that the increase in social security disability applications was related to the current economic slump, but suggested that this is to be expected. “When employment is good—when employers are trying to employ lots of people—people with impairments, like everyone else, find it easier to find a job,” he said.

Source: “Jobless Tap Disability Fund,” Wall Street Journal, December 28, 2011

Categories: Social Security