Completing the Picture: Key Features of the Social Security Disability Insurance Program. Some SSDI Beneficiaries Return to Work, and a Few Even Earn Enough to Leave the Rolls, but Work Disincentives and Other Barriers Make it Difficult

03/01/2014

Some SSDI Beneficiaries Return to Work, and a Few Even Earn Enough to Leave the Rolls, but Work Disincentives and Other Barriers Make it Difficult

Only a few SSDI beneficiaries return to work and earn enough to leave SSDI, but a substantial minority work temporarily, part-time, or at low-wage jobs, earning so little that they can still receive benefits. In any one year, about 15 percent of beneficiaries work, and the percentage is even greater over a ten-year period. Liu and Stapleton (2011) followed a 1996 cohort of new SSDI beneficiaries and found that after ten years, 3.7 percent lost their benefits at some point because they were working. However, about 27 percent of those who lost their benefits (that is, 1 percent of the cohort) eventually returned to the SSDI rolls. They also reported that younger awardees are much more likely than older awardees to have earnings from work and to give up their benefits as a result, at least temporarily.

Although the loss or suspension of benefits due to work can be measured directly, it is more difficult to measure how many SSDI beneficiaries could--but do not necessarily--return to work. It is reasonable to expect that only a few beneficiaries can eventually work enough to leave the benefit rolls; after all, one of the main eligibility criteria for SSDI is being unable to perform substantial work for at least 12 months. In 2007, 14 percent of SSDI beneficiaries had earnings of at least $1,000 (Mamun et al. 2011). Based on survey data, almost 23 percent of beneficiaries see themselves working in the next five years, and almost 13 percent see themselves working enough to leave the benefit rolls (Livermore et al. 2009).

Since the 1970s, work incentives have been built into the SSDI program to encourage beneficiaries to find jobs. Today, these incentives include a nine-month trial work period, during which beneficiaries can test their ability to work without losing their benefits; extension of Medicare benefits for almost nine years; and deduction of certain work expenses, such as the costs of specialized transportation or equipment, from earnings before benefits are reduced. A beneficiary may also earn up to the SGA level in any month without losing SSDI benefits.10 The Ticket to Work and Work Incentives Improvement Act (Ticket Act) of 1999 provides financing for employment services in a manner that encourages providers to help beneficiaries earn enough to leave the rolls and offers beneficiaries a choice of providers. Beneficiaries give their chosen provider a Ticket in exchange for services, and SSA pays the provider when the beneficiary reaches certain earnings milestones or outcomes. Counselors paid for by the Work Incentives Planning and Assistance program, established through the Ticket Act, inform interested beneficiaries about these incentives.11

There is some evidence that these incentives help SSDI beneficiaries return to work, but few people use them. Only about 8 percent used any employment-support services in the prior year, and less than 3 percent have given their Ticket to a provider (Livermore et al. 2009). One reason may be the complexity of the incentives; beneficiaries have difficulty using them appropriately, and SSA has difficulty administering them in a timely manner. Some authors have suggested simplifying these work incentives to reduce benefit costs, although the effect on benefit costs could go either way, depending on how the incentives are simplified.12

Given the barriers and work disincentives built into the SSDI and other programs, numerous authors recommend providing employment supports to people before they begin receiving SSDI benefits (GAO 2012; Mann & Stapleton 2012; Stapleton & Wittenburg 2011; Stapleton et al. 2006). Indeed, some programs providing early intervention and rehabilitation have helped people stay in their jobs rather than apply for SSDI benefits. Among the most successful programs have been employer-sponsored return-to-work and employment services--also known as disability management--delivered to workers who are on sick leave or are about to leave their jobs (Carroll et al. 2010; Franche et al. 2005). These programs have worked particularly well for employees with musculoskeletal disorders, which represent 32 percent of new SSDI-only applicants and 23 percent of new concurrent SSDI/SSI applicants (Rupp 2012). Another program, evidence-based supported employment,13 has also had more success than traditional vocational programs in helping people with psychiatric conditions obtain competitive employment, although earnings for most beneficiaries who receive supported employment services remain well below the SGA level (Bond et al. 2004). It is possible for these types of services to be cost-neutral through benefit reductions, but they must be narrowly targeted to people who will actually benefit from them and who would not return to work without them. However, such narrow targeting of services is both difficult and controversial.

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