Is Growth in Social Security Disability Due to Aging Baby Boomers or Scam?

Is Growth in Social Security Disability Due to Aging Baby Boomers or Scam?

The Social Security Disability Trust Fund (SSDI) is rapidly closing in on becoming the first of the two Social Security Trust Funds to become fully insolvent.  The disability trust fund, which is separate from the one that pays retirement and survivors benefits, is due to have funding problems by 2016.

This program provides benefits, based on earnings and work history, to workers with disabilities who are under full retirement age.  Between 1990 and 2013, enrollment increased 112.5%.  Of people receiving Social Security benefits, the number of disabled individuals has grown from 3.2 to 6.7 beneficiaries per 100 covered workers, according to the Congressional Research Service.

A major study by two economists at the Social Security Administration found that the growth is mainly due to Baby Boomers moving into disability-prone ages, growth in the number of women covered for disability benefits, and ordinary population growth.  But the researchers were unable to account for 10 percent of the growth that they attributed to what they dubbed the disability "incidence rate" — meaning the growth not attributable to something else.  Some members of Congress and the public are beginning to question whether overly vague eligibility criteria, and too many applicants receiving benefits that they aren't entitled to, might be to blame.

Last fall, the Government Accountability Office uncovered $1.3 billion in improper payments from December 2010 to January 2013 made to people who had jobs when they were supposed to be unable to work.  To be eligible for Social Security disability, beneficiaries must be unable to work due to a medical condition that's expected to last at least one year, or result in death.  The list, however, includes murky afflictions like back pain, depression and other un-measurable afflictions, opening the system to fraud and abuse.

Senate investigators recently explored one such astonishing case.  They took a closer look at a disability attorney and retired Social Security judge who practiced along the border area of Kentucky and West Virginia.   Some 10 to 15 percent of the entire population of the area — about three times the national average — is on disability.

According to the committee report, a (now retired) Social Security judge, David B. Daugherty, schemed with a disability attorney Eric C. Conn, improperly awarding benefits to "virtually all" of Conn’s 1,823 clients.  The decisions were based on recommendations by an unusually loyal group of doctors who "often examined Conn’s clients right in his law offices" according to a CBS News "60 Minutes" program.

Conn received more than $4.5 million in attorney’s fees from the Social Security Administration, making him the third highest paid disability lawyer in the country.  Reviews of Dougherty's bank accounts found $96,000 in unexplained deposits.  Senator Tom Coburn (OK) told 60 Minutes, "If all these people are disabled…I want them all to get it and then we need to figure out how we're going to fund it.  But my investigation tells me and my common sense tells me that we got a system that’s being gamed pretty big now."

Without changes, SSDI will only take in enough revenues to pay 80% of scheduled benefits by 2016.  TSCL believes that suspected fraud is compounding the crisis in the disability program, and that Congress should cut fraud — not benefits of those who are truly in need.  TSCL supports measures that would provide stiffer penalties for disability fraud, make eligibility criteria more objective and measurable, and step up reviews to determine whether people currently on the rolls remain entitled to benefits.

 

Sources:  Social Security Disability Insurance (DI) Trust Fund: Background and Solvency Issues, Morton, Congressional Research Service, November 20, 2013, R43318.  "Social Security Made $1.3 Billion in Improper Disability Payments," Stephen Ohlemacher, Associated Press, September 14, 2013.  "60 Minutes:  Disability USA," Steve Kroft, CBS News, October 6, 2013.  To view this story visit:  http://www.cbsnews.com/8301-18560_162-57606233/disability-usa .

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