The 2019 Social Security Trustees Report indicates that the Disability Insurance Trust Fund will be insolvent by 2052. Long-term solutions to this insolvency problem require major program reforms. While the primary mission of the Social Security Administration (SSA) is to administer national retirement, disability, and survivors benefits programs as required by law, SSA also has legislative authority to conduct research and demonstration projects to test potential changes to its disability programs.
SSA has already conducted several large demonstrations designed to help improve the labor force participation of Social Security Disability Insurance (SSDI) beneficiaries, and plans to continue to do so. In the 2019 President’s Budget, SSA included a proposal to expand the scope and time period of its current demonstration authorities to facilitate conducting additional demonstrations to test substantive changes to SSDI program rules that would support beneficiaries’ return-to-work efforts. Further, SSA has convened Technical Expert Panels to provide recommendations for these new demonstrations.
One of the upcoming demonstrations, referred to as “the ultimate demonstration,” will test removing all perceived financial disincentives to encourage beneficiaries to work.
To learn how SSDI beneficiaries would likely respond to decoupling their benefit from their earnings, Westat researchers modeled beneficiaries’ work behavior by comparing them to a propensity score-matched group of participants on the Veterans Affairs (VA) disability program, which, except for a few special exceptions, does not tie benefits to earnings. Then, controlling for differences in population characteristics, we estimated the employment rate and earnings expected if SSDI beneficiaries operated under the VA disability program rules of continued cash benefits.
We found that with removal of the earnings caps from SSDI, employment would rise by about 16 percent and average annual earnings would increase between $15,600 and $22,500 among those working.
Authors: Laurie May, Ph.D., and Kevin Baier, Ph.D., with Jarnee Riley; Jeffrey Taylor, Ph.D.; and Joseph Gasper, Ph.D.
Several experts have written papers regarding potential SSDI policy changes that explore making fundamental changes to the program, such as providing disability benefits on a time-limited basis. Would awarding time-limited benefits to SSDI applicants whose impairments are expected to improve accelerate their return to employment? We think they would if paired with empirically based interventions that would help them achieve employment goals and lessen biopsychosocial risk factors that may undermine their efforts.
In our findings, we describe a model for applying transitional benefits and an employability/eligibility service system for these SSDI applicants. We think using such a system can help many beneficiaries return to work by providing them with supports that reduce the emotional, social, economic, and other harmful consequences of long-term disability.
Authors: William Frey, Ph.D.; Robert Drake, M.D., Ph.D.; Gary Bond, Ph.D.; Howard Goldman, M.D., Ph.D.; Jarnee Riley; and Frank Bennici, Ph.D.
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