SSDI: A Bedrock of Security for American Workers

July 2nd, 2015 · No Comments · Blog, Featured Home Page Post

Imagine that tomorrow, while cleaning out your gutters, you fall off a ladder. You suffer a traumatic brain injury and spinal cord damage, leaving you paralyzed, unable to speak, and with significantly impaired short- and long-term memory. Unable to work for the foreseeable future, you have no idea how you are going to support your family. Now imagine your relief when you realize an insurance policy you have been paying into all your working life will help keep you and your family afloat by replacing a portion of your lost wages. Fortunately, there is no need to conjure up the source of your relief: it is our Social Security system.


Social Security Disability Insurance has been a core pillar of our nation’s Social Security system for nearly six decades, offering critical protection when Americans need it most. Today, it protects more than 9 out of 10 American workers and their families in the event of a life-changing disability or illness that prevents substantial work. While it may not be easy to think about, a young worker starting a career today has a one-in-three chance of either dying or needing to turn to Disability Insurance before reaching his or her full Social Security retirement age of 67. In other words, Social Security Disability Insurance provides basic but essential protection.

While benefits are modest, averaging just $1,165 per month, Social Security Disability Insurance plays a significant role in boosting economic security for beneficiaries, and for 8 out of 10 beneficiaries it is their main or only source of income. According to the Organisation for Economic Co-operation and Development, or OECD, the program’s eligibility criteria are among the strictest in the world, and only individuals with the most significant disabilities and severe illnesses qualify. Fewer than 4 in 10 applicants are approved, even after all levels of appeal. Many beneficiaries have multiple impairments, and many are terminally ill: Nearly one in five die within five years of receiving benefits.

As expected, the program has grown in recent years, mostly due to well-understood demographic and labor-market changes: Baby Boomers aging into their high-disability years, the increase in women’s labor-force participation, and population growth. The growth of the program has leveled off and is projected to decline further in the coming years as Baby Boomers retire. While the Disability Insurance trust fund currently faces a financing shortfall, rebalancing the two Social Security trust funds will put the entire Social Security system on sound footing until 2033. Rebalancing has served as routine housekeeping to keep both trust funds on sound footing amid demographic shifts and has occurred repeatedly whenever needed in the program’s history, about equally in both directions. Several policy options exist to ensure the long-term solvency of the overall Social Security system thereafter. However, if Congress fails to act to prevent depletion of the Disability Insurance trust fund reserves, many beneficiaries will be needlessly pushed into or deeper into poverty.

Social Security Disability Insurance provides vital protection to nearly all American workers and their families

Social Security was established 80 years ago to ensure “the security of the men, women and children of the nation against the hazards and vicissitudes of life.” In 1956, the program was expanded to include Disability Insurance in recognition that the private market for long-term disability insurance was failing to provide adequate or affordable protection to workers.

Today, nearly all Americans – 90% of workers ages 21 to 64 – are protected by Social Security Disability Insurance. In all, more than 160 million American workers and their families are protected. About 8.9 million disabled workers – including more than 1 million veterans – receive Disability Insurance benefits, as well as about 146,000 spouses and 1.8 million dependent children of disabled workers. [...]

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This excerpt rebulished with permission from the Center for American Progress. The post, by Rebecca Vallas and Shawn Fremstad, originally appeared June 16, 2015.




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