Lies and Truths About Waste and the Growth of Social Security Disability

Lies and Truth About Waste and the Growth of Social Security Disability

 

In July and August of 2016, we produced a four-part blog series titled:
Social Security Myths.” In Myth #4 we focused on the rhetoric that Social Security disability claims were soaring, and sought to evaluate the sensational assertions using facts that are readily available, for anyone who cared to look anyway.

Recently, this false claim regarding disability was put forth again for the sole purpose of making some hard to understand, and politically charged, points when the President’s budget director stated the following in an interview on CBS:

“Do you really think that Social Security disability insurance is part of what people think of when they think of Social Security? I don’t think so. It’s the fastest-growing program. It grew tremendously under President Obama. It’s a very wasteful program, and we want to try and fix that.”

We called this type of statement, “The Typical Spin,” in our Myth #4. The view expressed above solely identifies SSDI as both the “fastest growing program” and a “very wasteful program.” Let’s keep it simple here, and break down, what’s inaccurate and just plain incorrect about this statement.

 

 

 

Social Security Disability is the Fastest Growing Program?

The rate of claims for disability has gone up and down in recent years, correlating strongly with the economic environment. However, the rate of all the claims that are granted has remained consistent with respect to the total number of workers in the workforce.

 

Social Security Disability Denial Rates 2005-2014
Social Security Disability Denial Rates 1975-2014

 

Approximately 0.5% of all workers are awarded disability benefits per year (about 1 in 200). This rate has been consistent for at least the last ~20 years.

It is important to look at this data as rates and percentages instead of as absolute totals. If we were to compare absolute numbers, the number of claimants would always be increasing, if the number of workers increased. More workers, more injuries, more disability.

This last point is also very notable in this discussion. Workers: Injuries: Disability: SSDI. SSDI is a benefit for workers; it is an insurance program they (workers) have paid into through their payroll, and is not “welfare,” in the pejorative sense.

In fact, looking at the data, even in recent years – while the rate of those claiming disability has gone up, the rate of the award has remained at the 0.5% we just discussed. By this measure, Social Security has been more restrictive than expected in awarding claimants’ disability benefits.

Taking all this into account, it is tough to see how the “fastest growing program” is the program that has become more restrictive to applicants over the last couple of years. Of course, this is because SSDI is in fact, NOT the fastest growing program administered by the Social Security Administration.

 

It’s Not Just Our Take on This…

The LA Times dug into this issue – comparing in precise numbers the rise in awards for SSDI (in absolute terms) vs. the increase in awards for SSI. While SSI enrollment has grown by 10 million in the last eight years, SSDI enrollment has increased by only 1.2 million in the same amount of time, and in fact, decreasing since 2014.

 

Social Security Disability is a “Very Wasteful Program?”

Sadly, the President’s budget director only let out this tiny soundbite. However, when you are already telling a fib, why not tell another. Again, we covered this in our series on Social Security Myths. In particular, Myth #2: People Are Denied Benefits Because of Fraud in Social Security Claims.

To concede a point, we will call something a waste whether the intent to receive improper benefits was purposeful or merely a happy accident.  We will be very loose in our definition to give the absolute best interpretation of the Budget guru’s words.  So how do they bear out?

Between 2005-2014, Social Security found that 0.7% of those receiving benefits knowingly or unknowingly received some level of benefits they should not have.  That’s $11 Billion over 10 years.  A pretty big number!  So, how does this rate of fraud, waste, and abuse compare to other government programs? Or even, the private sector?

In 2011, it was estimated that ~7% (10x SSDI by %) of Medicare spending was lost to fraud and abuse. In real terms that is $11billion lost in 10 years for Social Security disability and $177billion lost in 1 year for Medicare. That is not a typo – it’s the Economist.

Private Sector: In 2014, a study by the National Retail Foundation and the University of Florida found that shrink (lost product to theft) averaged, 1.38% (2x SSDI by %). In total numbers, that is $44 billion lost in 1 year to private sector retail theft, vs. $11 billion over ten years for SSDI.

 

Consequences and Why We Should Care

It is honestly a head scratcher how Social Security Disability is the “most wasteful program.” For that matter, how it is the “fastest growing program.” By all analytical accounts, it is neither. However, it is the easiest program to bash, and that has genuine consequences.

When truly legitimate applicants seek disability benefits, they already face an uphill battle. Social Security is already more likely than not to deny a claim on the first go-round. This barrier is on top of the terrible realization that their injuries are in-fact obstacles to employment. Shaming remarks towards the benefit itself or those who need it very likely will make people avoid pursuing it or avoid letting their support network know they are seeking it.

If you are reading this, and think you might need Social Security Disability benefits, please reach out to Lilac City Law. We will help you figure this out, without spin.

 

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5 Questions to Ask your Social Security Disability Attorney

5 Questions to ask your Social Security Disability Attorney

 

The process of obtaining Social Security can be time consuming, stressful, and confusing. 

Whether you’re filing your initial disability claim or working with a Social Security Disability Attorney on an appeal to a denial of your claim, you may still not have much personal knowledge of where you are in the process. 

For this reason, we put together this list of 5 questions you should ask your Social Security Disability Attorney about your claim. 


A Primer on Social Security Disability

Before we cover the five questions you should ask your Social Security Disability Attorney, let’s get a brief overview of what a social security disability insurance is and why it is so important to hire an attorney for it.

Social Security Disability Insurance (SSDI) is a program that works in favor for people who are severely ill or physically impaired to provide them with monthly support in the form of financial compensation.   A Social Security disability attorney helps you in planning out your appeal and represents you in any administrative law hearings related to it.  The amount of work a Social Security attorney may end up doing on your behalf could vary widely depending on the particulars of your claim and/or appeal.  So, as you’re considering who you want to work with, you may also want to consider these five questions to ask your (potential) Social Security disability attorney as well.

 

What Other Benefits Do I Qualify For? 

The primary benefit you’re seeking with Social Security disability is compensation.  Monthly income.  In some cases, you may qualify for additional benefits or even compensation through other benefits programs, in addition to SSDI.

These could include some retirement benefits, long term disability benefits through a private insurer (or your previous employer), VA service-connected disability compensation, and more.  You should also look at state and local benefits that may be available.  This is yet another great reason to work with a local disability attorney.  They will have a better understanding of what might be available locally, as well as a firm grasp on how Social Security disability interacts with other federal and commercial financial benefits.

Ask your social security disability attorney what you qualify for and what benefits may be provided to you along with the social security disability benefits.

 

What Can I Do To Help My Own claim?

The first thing you need to understand is that most applicants are denied on their first attempt. So the first thing to do is not to panic. However, if you and your Social Security disability attorney stick with your claim, it is likely you’ll eventually find success in your claim.  To help your attorney they’ll probably ask you for all your recent medical records and all paperwork that can help you in your case.  These represent objective facts, and are hard to argue against – that’s why your attorney wants to have them available.

However, there are truths about your claim that may not be represented on paper.  You may know things that your attorney doesn’t know about your claim.  An astute attorney will know what kind of information you might still have, that they need.  But it requires two-way communication.  The best way to start that is to ask how you can help in the first place.

 

How Will We Plan to Prepare for a Hearing?

The Social Security hearing is a stressful event for most claimants.  Planning ahead will help everyone involved.  However, do a quick google search and read a few reviews of Social Security attorneys.  The low reviews almost always state something to the effect of, “attorney met with me two hours before hearing,” or, “attorney met me the day before hearing, that’s the only time we talked.  Didn’t know my claim at all!”

This happens often enough that it’s almost the norm… Though, it shouldn’t be.  You can pre-empt this nightmare scenario by asking your Social Security disability attorney, “how will we plan to prepare for a hearing?”  If they can’t lay out a process that makes sense, they may be putting you in front of a judge at some point, unprepared.  Be aware of attorneys without plans.

 

How Do You Prefer We Stay in Contact?

Communication is vital in dealing with a Social Security disability denial and all the events, and coordination an appeal to it requires. That is why you and your Social Security disability attorney should decide the best possible form of contact.

Whether the communication plan is face to face meetings, emails, traditional mail, fax, text message, or smoke signals, you need to lay out a system that enables effectiveness.  And it needs to work for both of you.

 

Do You Have All My Doctors’ Contact Information?

It is very important to give all the healthcare information you have to your Social Security disability attorney. This means all your medical records, related documents plus all your doctors’ contact details. This should also include their contact number, office address and in some cases, home address for emergency situations.

Make a personal copy of all this information too, to keep for your own records, and to provide as a source for future copies needed by another attorney (if need be), other benefits providers, and/or for other reasons not yet realized, such as a will or estate plan.

 

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Is Social Security the Same As Disability? 

Do you Know the Difference Between Social Security & Disability?

 

Social Security, disability, SSI, & SSDI get confused a lot.  Unless you spend your time working with these terms, it is hard to make sense of which program is for which need.  Here’s a short description of Social Security and Disability benefits.  And an infographic to help you in understanding the differences.  


 

Social Security & SSI

Supplemental Security Income (SSI) is a program through the Social Security Administration (SSA) designed to provide a monetary benefit to Americans who are older than 65, blind, or disabled.  SSI is needs-based, meaning that the beneficiaries must be below a certain asset threshold.  And they must have limited income, and/or income earning potential.

SSI is often paired with Medicaid, administered by individual states.  Recipients of SSI often also qualify for food stamps.

 

Social Security & SSDI 

Social Security Disability Insurance (SSDI) is similar to an insurance program you might buy into for the contingency that you might become unable to work due to an injury in the future.  In actual fact, it is essentially that – an insurance program.  Though, it’s not really opt-in if you’re employed; you pay (or paid) into it through payroll taxes.

The payout for SSDI is typically higher than SSI, but it requires that you have a relatively recent work history, to base the amount of your benefits on.  Beneficiaries become eligible for Medicare after two years of being on SSDI.

 

Is Social Security the Same As Disability? 

Side by Side Comparison Between SSI & SSDI

 

The confusing issue here is that the term, “disability,” could refer to both SSI & SSDI.  When in fact the two benefits, SSI & SSDI, are for people with different experiences, backgrounds, &  current challenges.  And, in addition, the two programs have different requirements, awards, goals, and funding streams.

So, from a basic terminology perspective, Social Security is Disability, though it can refer to more than just that.  Likewise, disability can refer to either SSI or SSDI, or even some VA & states’ benefits.

Regardless of how mixed up this conversation has gotten you, feel free to reach out for help in understanding the difference in the programs.  You can also browse the rest of our blog for answers to questions like this and others regarding disability.

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