# Social Security Disability Insurance (SSDI) Reform: An Overview of Proposals to Manage the Growth in the SSDI Rolls

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URL: https://www.frixlaw.com/law-library/documents/crs%3AR43054

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** January 9, 2015
- **Citation:** R43054

## Text

Social Security Disability Insurance (SSDI)
Reform: An Overview of Proposals to Manage
the Growth in the SSDI Rolls
(name redacted)
Analyst in Income Security
January 9, 2015

Congressional Research Service
7-....
www.crs.gov
R43054

SSDI Reform: An Overview of Proposals to Manage the Growth in the SSDI Rolls

Summary
Social Security Disability Insurance (SSDI) provides benefits to nonelderly workers with certain
disabilities and their eligible dependents. As in Old-Age and Survivors Insurance (OASI)—Social
Security’s retirement program—SSDI benefits are based on a worker’s past earnings. To qualify,
individuals must have worked and paid Social Security taxes for a certain number of years and be
unable to engage in substantial gainful activity (SGA) due to a severe mental or physical
impairment that is expected to last for at least one year or result in death. In 2015, the monthly
SGA earnings limit for most individuals is $1,090. In general, disabled workers must be unable to
do any kind of substantial work that exists in the national economy, taking into account age,
education, and work experience.
Recently, some Members of Congress and the public have expressed concern over the growth in
the SSDI program. Between 1980 and 2013, the number of disabled workers and their dependents
more than doubled, rising from 4.7 million to 11.0 million. This increase has placed pressure on
the Disability Insurance (DI) trust fund, from which SSDI benefits are paid. Over the same
period, spending on benefits increased by more than 50%, from 0.54% of gross domestic product
(GDP) in 1980 to 0.84% of GDP in 2013. Without legislative action, the DI trust fund is projected
to be depleted by the end of 2016. After that, ongoing tax revenues would be sufficient to pay
about 80% of scheduled benefits.
Most researchers agree that changes in the demographic characteristics of the working-age
population account for a large share of the growth in the number of individuals on SSDI.
Demographic changes consist of (1) the aging of the baby boomers, (2) the influx of women into
the labor force, and (3) the overall growth in the working-age population. However, there is
considerable disagreement among researchers over how much non-demographic factors
contributed to the growth. Non-demographic factors include (1) changes in opportunities for work
and compensation (e.g., slow wage growth for low-skilled workers and high unemployment), (2)
changes in federal policy that made it easier for some people to qualify as disabled, and (3) the
rise in the full retirement age for unreduced Social Security retirement benefits. In general, people
who support higher spending on SSDI focus on changes in the demographic characteristics of
workers. In contrast, individuals who want to limit program spending typically focus on the effect
of changes in the economic incentives to apply for SSDI and legislative changes to the program’s
eligibility criteria.
To assist lawmakers in addressing the sustainability of the program, this report provides an
overview of proposals to manage the long-term growth in the SSDI rolls. Most of the proposals
focus on reducing the inflow (enrollment) of new beneficiaries into the program. These proposals
involve (1) tightening eligibility criteria, (2) improving the administration of the program, and (3)
providing incentives for employers to help keep employees working when they become disabled.
On the other hand, some of the proposals seek to increase the outflow (termination) of
beneficiaries from the program. These proposals entail (1) providing stronger incentives for
beneficiaries who can work to return to the labor force, and (2) increasing the number of periodic
continuing disability reviews, which stop benefits for people found to be no longer disabled. This
report does not examine options to reduce benefit levels or increase program revenues.
Although many of the options discussed in this report have the potential to slow or even reverse
the growth of SSDI receipt and thus generate savings to the program over the longer term, such
proposals are highly unlikely to significantly forestall the projected exhaustion of the DI trust
fund. To avoid a 20% cut in benefits in late 2016, lawmakers would almost certainly have to use
cash infusions to bolster the assets of the DI trust fund. For example, Congress could reallocate
the Social Security payroll tax rate to give the DI trust fund a larger share (as was done in 1994),

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SSDI Reform: An Overview of Proposals to Manage the Growth in the SSDI Rolls

or it could authorize interfund borrowing from the OASI trust fund or Medicare’s Hospital
Insurance (HI) trust fund. These short-term financing options would give lawmakers more time to
develop and implement some of the longer-term proposals mentioned in the report if they wished
to slow the growth in the disability rolls.

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SSDI Reform: An Overview of Proposals to Manage the Growth in the SSDI Rolls

Contents
Introduction .................................................................................... Error! Bookmark not defined.
Background on SSDI ....................................................................................................................... 2
Eligibility .................................................................................................................................. 2
Benefits ..................................................................................................................................... 3
Determination and Adjudication Process .................................................................................. 3
Trends in the SSDI Program Since 1980 ......................................................................................... 4
Enrollment ................................................................................................................................. 4
Termination ............................................................................................................................... 5
Program Size ............................................................................................................................. 8
Prevalence Rates ................................................................................................................. 9
Causes of the Growth in the SSDI Rolls ....................................................................................... 10
Changes in the Demographic Characteristics of Insured Workers ........................................... 11
Growth in the Working-Age Population ............................................................................ 11
The Influx of Women into the Labor Force ...................................................................... 12
The Aging of the Workforce ............................................................................................. 13
Changes in Opportunities for Work and Compensation .......................................................... 15
High Unemployment ......................................................................................................... 15
The Value of Cash Benefits............................................................................................... 16
The Value of Health Coverage .......................................................................................... 18
Changes in Federal Policy ....................................................................................................... 19
The Social Security Amendments of 1983........................................................................ 20
The Social Security Disability Benefits Reform Act of 1984 ........................................... 21
Other Potential Factors ............................................................................................................ 26
Changes in the Health of the Working-Age Population .................................................... 26
Variation in the Disability Determination and Appeals Process ....................................... 27
Reform Proposals .......................................................................................................................... 28
Tighten Eligibility Criteria ...................................................................................................... 29
Eliminate Eligibility for SSDI Benefits at Age 62 or Later .............................................. 29
Increase the Recency-of-Work Requirement .................................................................... 30
Adjust the Age Categories for Vocational Factors ............................................................ 31
Improved Administration of the Program ............................................................................... 32
Permit SSA to Be Represented at the Hearing Level of the Appeals Process ................... 32
Update SSA’s Listing of Impairments............................................................................... 36
Update SSA’s Occupational Information System ............................................................. 38
Increase the Number of Full Medical CDRs Conducted by SSA ..................................... 39
Return-to-Work Incentives ...................................................................................................... 43
Increase Awareness of Return-to-Work Services .............................................................. 44
Benefit Offset .................................................................................................................... 45
Promote Supported-Work Policies .......................................................................................... 47
Experience Rate the Employer’s Portion of the Payroll Tax Rate .................................... 48
Employer-Sponsored Private Disability Insurance ........................................................... 49

Figures
Figure 1. SSDI Applications, Awards, and Incidence (Enrollment) Rates, 1980-2013 ................... 5

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SSDI Reform: An Overview of Proposals to Manage the Growth in the SSDI Rolls

Figure 2. Disabled-Worker Beneficiary Termination Rates, 1980-2013 ......................................... 6
Figure 3. Number of Full Medical CDRs Conducted by SSA, FY1990-FY2014 ........................... 8
Figure 4. SSDI Beneficiaries, by Type, 1980-2013 ......................................................................... 9
Figure 5. Gross and Age-Sex-Adjusted Prevalence Rates, 1980-2013 ......................................... 10
Figure 6. Growth in the Population Aged 20-64, 1980-2013 ......................................................... 11
Figure 7. Percentage of the Population Ages 15-64 Insured for Disability, by Sex, 19802014 ............................................................................................................................................ 12
Figure 8. Age-Adjusted Incidence (Enrollment) Rates by Sex, 1980-2013 .................................. 13
Figure 9. Percentage Distribution of SSDI Awards, by Age, 1980-2013 ...................................... 14
Figure 10. SSDI Applications and Awards During Economic Downturns, 1980-2013 ................. 16
Figure 11. Percentage Distribution of SSDI Awards, by Diagnostic Group, 1981-2013 .............. 24
Figure 12. SSDI Incidence Rates, by Diagnostic Group, 1981-2013 ............................................ 25
Figure 13. Basis for Decision of Initial SSDI Allowances, FY1980-FY2010............................... 37
Figure 14. Full Medical CDR Backlog, FY2002-FY2013 ............................................................ 41

Tables
Table 1. Hypothetical Disabled-Worker Replacement Rates at Age 55 ........................................ 17
Table 2. DDS Staffing, FY2008-FY2013 ...................................................................................... 41

Appendixes
Appendix. Acronyms ..................................................................................................................... 53

Contacts
Author Contact Information ........................................................... Error! Bookmark not defined.

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Introduction
Concern among some Members of Congress and the public over the financial sustainability of the
Social Security Disability Insurance (SSDI) program has grown.1 Under current law, the Federal
Disability Insurance (DI) Trust Fund—which finances the benefits and administrative costs of the
SSDI program—is projected to be exhausted by the fourth quarter of calendar year 2016.2 If
depleted, the DI trust fund would be able to pay about 80% of scheduled SSDI benefits.
The declining solvency of the DI trust fund is the result of an increasing imbalance between
SSDI’s income and outlays. Between 1980 and 2013, non-interest income to the DI trust fund
(adjusted for inflation) increased 181%, while spending on benefits grew 219%.3 The increase in
spending is due largely to the growth in the number of beneficiaries on SSDI. Over the same
period, the number of disabled workers and their dependents more than doubled, rising from 4.7
million in 1980 to 11 million in 2013. Because benefit payments account for nearly all program
spending, the growth in the SSDI rolls has contributed heavily to the financial difficulties of the
DI trust fund.4
To assist lawmakers in addressing the sustainability of the program, this report provides an
overview of reform proposals to manage the long-term growth in the SSDI rolls. The report is
divided into four sections. The first section provides a brief background on SSDI, including
program eligibility criteria, benefits, and the initial determination and adjudication process. The
second section discusses the growth in the SSDI rolls since 1980 by examining historical entry
and exit trends in the program. The third section investigates some of the causes of growth in
SSDI, including changes in the demographic characteristics of the working-age population,
changes in opportunities for work and compensation, and changes in federal policy. The fourth
section examines various options to manage the growth in the SSDI rolls, namely, (1) stricter
eligibility criteria, (2) improved administration of the program, (3) stronger return-to-work
incentives, and (4) policies to encourage employers to help disabled workers continue to work.
Many of the options discussed in this report could reduce spending by slowing or even reducing
the growth of SSDI over the long term; however, such options are unlikely to produce savings in
time to prevent the projected exhaustion of the DI trust fund in 2016.5 For information on
1

See, for example, U.S. Congress, House Committee on Ways and Means, Subcommittee on Social Security, First in a
Hearing Series on Securing the Future of the Social Security Disability Insurance Program, 112th Cong., 1st sess.,
December 2, 2011 (Washington: GPO, 2012), pp. 4-5, http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg76319/pdf/
CHRG-112hhrg76319.pdf. See also U.S. Congress, Senate Committee on Finance, Social Security: A Fresh Look at
Workers’ Disability Insurance, 113th Cong., 2nd sess., July 24, 2014, http://www.finance.senate.gov/imo/media/doc/
07242014%20Wyden%20Hearing%20Statement%20on%20Keeping%20the%20Promise%20of%20Social%20Security
1.pdf.
2
U.S. Congress, House Committee on Ways and Means, The 2014 Annual Report of the Board of Trustees of the
Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, prepared by Board of
Trustees, Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, 113th Cong., 2nd sess., July
28, 2014, 113-139 (Washington: GPO, 2014), http://www.ssa.gov/oact/tr/2014/index.html (hereinafter cited as “2014
Trustees Report”). See also U.S. Congressional Budget Office (CBO), Old-Age, Survivors, and Disability Insurance
Trust Funds—CBO’s April 2014 Baseline, April 2014, http://www.cbo.gov/publication/43890. The Social Security
trustees project that the DI trust fund will be exhausted in the fourth quarter of 2016 under their intermediate
assumptions. Meanwhile, CBO estimates that the DI trust fund will be exhausted in early FY2017, which overlaps with
the fourth quarter of calendar year 2016.
3
See Social Security Administration (SSA), “DI Trust Fund, A Social Security Fund,” http://www.ssa.gov/oact/
STATS/table4a2.html. Figures are in 2013 dollars.
4
Ibid. In 2013, benefit payments accounted for 98% of total outlays from the DI trust fund.
5
For actuarial memoranda on Social Security reform proposals that affect the solvency of the Old-Age and Survivors
(continued...)

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financing options to extend the solvency of the DI trust fund in the short term, see CRS Report
R43318, Social Security Disability Insurance (DI) Trust Fund: Background and Solvency Issues,
by (name redacted) .

Background on SSDI
Enacted in 1956 under Title II of the Social Security Act, SSDI is part of the Old-Age, Survivors,
and Disability Insurance (OASDI) program administered by the Social Security Administration
(SSA).6 OASDI is commonly called Social Security. Like Old-Age and Survivors Insurance
(OASI), SSDI is a form of social insurance that replaces a portion of a worker’s earnings based
on the individual’s career-average earnings in jobs covered by Social Security.7 Specifically,
SSDI provides benefits to insured workers under the full retirement age (FRA) who meet the
statutory test of disability and to their eligible dependents.8 FRA is the age at which unreduced
Social Security retirement benefits are first payable (currently 66).9 In November 2014, 10.9
million individuals received SSDI benefits, including 9 million disabled workers, 150,000
spouses of disabled workers, and 1.8 million children of disabled workers.10

Eligibility
To qualify for SSDI, workers must be (1) insured in the event of disability, and (2) statutorily
disabled. To achieve insured status, individuals must have worked in covered employment (i.e.,
jobs covered by Social Security) for about a quarter of their adult lives before they became
disabled and for at least five of the past 10 years immediately before the onset of disability.11
However, younger workers may qualify with less work experience based on their age. In 2014,
SSDI provided disability insurance to an estimated 151 million workers.12
To meet the statutory test of disability, insured workers must be unable to engage in any
substantial gainful activity (SGA) because of a medically determinable physical or mental
impairment that can be expected to result in death or has lasted or can be expected to last for at
least one year.13 In 2015, the monthly SGA earnings limit is $1,090 for most workers and $1,820
for statutorily blind individuals. In general, workers must have a severe condition that prevents

(...continued)
Insurance (OASI) and DI trust funds, see SSA, Office of the Chief Actuary, “Proposals Affecting Trust Fund
Solvency,” http://www.ssa.gov/oact/solvency/index.html.
6
For more information on the OASDI program, see CRS Report R42035, Social Security Primer, by (name redacted).
7
SSA’s Office of the Chief Actuary estimates that 165 million people worked in Social Security–covered employment
in 2014. For more information, see SSA, 2014 Social Security/SSI/Medicare Information, July 28, 2014,
http://www.ssa.gov/legislation/2014factsheet.pdf.
8
For more information on the SSDI program, see CRS Report RL32279, Primer on Disability Benefits: Social Security
Disability Insurance (SSDI) and Supplemental Security Income (SSI), by (name redacted) .
9
The FRA is currently 66; however, the FRA is scheduled to rise to 67 for workers born in 1960 or later. For more
information, see CRS Report R41962, The Social Security Retirement Age: In Brief, by (name redacted)
.
10
SSA, “Monthly Statistical Snapshot, November 2014,” December 2014, Table 2, http://www.ssa.gov/policy/docs/
quickfacts/stat_snapshot/ (hereinafter cited as “Monthly Statistical Snapshot”).
11
For more information, see SSA, “Benefits Planner: Number Of Credits Needed For Disability Benefits,” accessed
October 2014, http://www.socialsecurity.gov/retire2/credits3.htm.
12
SSA, “Disabled Insured Workers,” http://www.ssa.gov/OACT/STATS/table4c2DI.html.
13
42 U.S.C. §423(d)(1) and 20 C.F.R. §404.1505.

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them from doing any kind of substantial work that exists in the national economy, taking into
account age, education, and work experience.

Benefits
Cash benefits begin five full months after a beneficiary’s disability onset date.14 Initial benefits
are based on a worker’s career-average earnings, indexed to reflect changes in national wage
levels (up to five years of the worker’s low earnings are excluded).15 Benefits are subsequently
adjusted to account for inflation through cost-of-living adjustments (COLA), as measured by the
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).16 However,
benefits may be offset if a disabled worker also receives workers’ compensation or other public
disability benefits. In November 2014, the average monthly benefit was $1,146 for disabled
workers, $309 for spouses of disabled workers, and $343 for children of disabled workers.17
In addition to cash benefits, disabled workers and certain dependents are eligible for health
coverage under Medicare after 24 months of entitlement to cash benefits (29 months after the
onset of disability).18 In 2012, Medicare spending per disabled beneficiary averaged about
$9,900.19
Some SSDI beneficiaries may also qualify for Supplemental Security Income (SSI).20 SSI
provides cash payments to aged, blind, or disabled individuals with limited income and assets.
Both programs are administered by SSA and use the same definition of disability; however,
unlike SSDI, SSI has no work or contribution requirements. In most states, SSI recipients are
automatically eligible for Medicaid.21 Over 1 million disabled workers ages 18-64 received both
SSDI and SSI benefits in December 2013.22

Determination and Adjudication Process
To apply for SSDI, an individual must first file an application with a local SSA field office.
Applications that meet the work history and earnings requirements are then forwarded to a state
14

For additional information on the five-month waiting period, see CRS Report RS22220, Social Security Disability
Insurance (SSDI): The Five-Month Waiting Period for Benefits, by (name redacted) .
15
For more information on dropout years, see CRS Report R43370, Social Security Disability Insurance (SSDI):
Becoming Insured, Calculating Benefit Payments, and the Effect of Dropout Year Provisions, by (name redac ted).
16
See CRS Report 94-803, Social Security: Cost-of-Living Adjustments, by (name redacted)
.
17
Monthly Statistical Snapshot, Table 2. Benefits for spouses and children of disabled workers are also subject to
certain maximum family benefit limits.
18
For more information, see SSA, “Medicare Information,” accessed November 2014, http://www.ssa.gov/
disabilityresearch/wi/medicare.htm. See also CRS Report R40425, Medicare Primer, coordinated by (name redacted)
and (name redacted).
19
Centers for Medicare and Medicaid Services (CMS), Medicare & Medicaid Statistical Supplement, 2013 edition,
Table 3.4, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/
MedicareMedicaidStatSupp/index.html. Figure is per enrollee and includes disabled workers, disabled widow(er)s,
disabled adult children, and individuals entitled to Medicare because of end stage renal disease only.
20
See CRS Report RL32279, Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and
Supplemental Security Income (SSI), by (name redacted) .
21
See CRS Report R43357, Medicaid: An Overview, coordinated by (name redacted). Individuals enrolled in both
Medicare and Medicaid are known as dual-eligible beneficiaries.
22
SSA, Annual Statistical Report on the Social Security Disability Insurance Program, 2013, December 2014, Table
66, http://www.ssa.gov/policy/docs/statcomps/di_asr/2013/index.html (hereinafter cited as “SSA, SSDI Annual Report
2013”).

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Disability Determination Services (DDS) office for a medical determination. DDSs—state
agencies that are fully funded by the federal government—decide whether applicants meet
national disability standards established by SSA. State DDS examiners and medical and
psychological consultants typically use medical evidence collected from the claimant’s treating
sources (physicians, psychologists, or other acceptable medical sources) to determine the severity
of the claimant’s impairment(s). If a claimant’s condition is determined to be severe and meets (or
is of equal severity to) the medical criteria in SSA’s Listing of Impairments, the claimant is
considered disabled and therefore eligible for SSDI. Claimants who do not meet the medical
criteria in the listings proceed to a more individualized assessment that examines their residual
functional capacity to perform any past relevant work or other work that exists in the national
economy. If a claimant cannot perform such work, the claimant is awarded benefits.
Claimants whose initial applications are denied may appeal. During the appeals process,
claimants may present additional evidence or arguments to support their case as well as appoint a
representative to act on their behalf. The appeals process is composed of four stages: (1)
reconsideration by a different examiner from the state DDS office, (2) a hearing before an
administrative law judge (ALJ), (3) a review before the Appeals Council, and (4) filing suit
against SSA in U.S. district court.23 Almost all appeals reach the ALJ stage; few proceed to the
Appeals Council or federal court.24

Trends in the SSDI Program Since 1980
Definitions
Insured-Worker Population: The total number of workers who meet the work-history requirements for disability
benefits (includes workers on SSDI).
Prevalence Rate: The ratio of the number of disabled-worker beneficiaries in current-payment status to the
insured-worker population.
Disability-Exposed Population: The total number of workers who are insured but not currently receiving benefits
(equal to insured-worker population minus workers on SSDI).
Incidence Rate: The ratio of the number of new disabled-worker beneficiaries awarded benefits each year to the
disability-exposed population.

Enrollment
Between 1980 and 2013, the number of SSDI applications submitted to SSA’s field offices
doubled, from 1.3 million to 2.6 million.25 As Figure 1 illustrates, most of that growth began
around 2000. The number of awards for SSDI increased 111% over this same period, from
420,000 in 1980 to 888,000 in 2013.26 At the same time, the overall incidence (enrollment) rate
23

In 1999, SSA eliminated the reconsideration step in 10 states as part of the Disability Redesign Prototype (Prototype)
initiative, which included Alaska, Alabama, California (Los Angeles West and North Branches), Colorado, Louisiana,
Michigan, Missouri, New Hampshire, New York, and Pennsylvania. For more information, see SSA, Program
Operations Manual System (POMS), DI 12015.100 Disability Redesign Prototype Model, January 2014,
http://policy.ssa.gov/poms.nsf/lnx/0412015100.
24
Social Security Advisory Board (SSAB), Aspects of Disability Decision Making: Data and Materials, February
2012, Chart 12, p. 17, http://www.ssab.gov/PublicationViewOptions.aspx?ssab_pub=115 (hereinafter cited as “SSAB,
Data and Materials 2012”).
25
SSA, Annual Statistical Supplement, 2014, Table 6.C7, http://www.ssa.gov/policy/docs/statcomps/supplement/2014/
6c.html#table6.c7, (hereinafter cited as “SSA, Annual Statistical Supplement 2014”).
26
Ibid.

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rose from 4.4 awards per 1,000 disability-exposed to 6.3. The incidence rate is the ratio of the
number of new beneficiaries awarded benefits each year to the number of workers who are
insured in the event of disability but not currently receiving benefits (i.e., the disability-exposed
population).
Figure 1. SSDI Applications, Awards, and Incidence (Enrollment) Rates, 1980-2013
(in millions)

(per 1,000 disability-exposed)

3.0

9

Applications

8

(millions)

2.5

7
2.0

6

Incidence Rate

5

(per 1,000)

1.5

4

1.0

3

Awards
(millions)

0.5

2
1

0.0
1980

0
1984

1988

1992

1996

2000

2004

2008

2012

Source: Congressional Research Service (CRS) based on application and award data from SSA, Annual Statistical
Supplement, 2014, Table 6.C7, at http://www.ssa.gov/policy/docs/statcomps/supplement/2014/6c.html#table6.c7
and incidence rate data from Board of Trustees, Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors
Insurance and Federal Disability Insurance Trust Funds, Figure V.C3, http://www.ssa.gov/oact/tr/2014/index.html
(hereinafter cited as “2014 Trustees Report”).
Notes: “Applications” and “Awards” are in millions; the “Incidence Rate” is per 1,000 disability-exposed. The
incidence (enrollment) rate is the ratio of the number of new beneficiaries awarded benefits each year to the
number of workers who are insured in the event of disability but not currently receiving benefits (i.e., the
disability-exposed population).

Termination
Entitlement to benefits ends when a disabled worker no longer meets the eligibility criteria for
SSDI. Although the overall number of disabled-worker terminations increased 77% between 1980
and 2013, from 435,000 to 769,000, the ratio of annual disabled-worker terminations to the
average number of disabled-worker beneficiaries (the termination rate) actually decreased 41%,
from 145 disabled-worker terminations per 1,000 disabled-worker beneficiaries to 86.27
As depicted in Figure 2, three main factors drive the termination rate: death, recovery, and
conversion. The beneficiary death rate decreased 42% between 1980 and 2013, from 48 disabled-

27

Tim Zayatz, Social Security Disability Insurance Program Workers Experience: Actuarial Study No. 114, SSA,
1999, Table 5, http://www.ssa.gov/oact/NOTES/actstud.html. See also SSA, SSDI Annual Report 2013, Table 50.

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worker terminations per 1,000 disabled-worker beneficiaries to 28, reflecting the trend in the U.S.
population of declining mortality rates across all age groups.28
Figure 2. Disabled-Worker Beneficiary Termination Rates, 1980-2013
(ratio of annual terminations to the average number of disabled-worker beneficiaries in a year)
(per 1,000 disabled-worker beneficiaries)

200
180
160
140

All Terminations (Total)

120
100
80

Conversion

60

40
20

Recovery

Other
0
1980
1984

1988

Death

1992

1996

2000

2004

2008

2012

Source: Compiled by CRS. Data for years 1980-2009 are from Tim Zayatz, Social Security Disability Insurance
Program Workers Experience, Actuarial Study No. 114, SSA, June 1999, Table 5, and subsequent editions. Data for
years 2010-2013 are from SSA, Annual Statistical Report on the Social Security Disability Insurance Program, 2010,
November 2010, Table 50, and subsequent editions.
Notes: The category “Other” includes disabled workers who have elected to take early retirement benefits.

Recovery refers to individuals whose benefits were terminated because of medical improvement
or earnings above SGA. From 1980 to 2013, the recovery rate declined 77%, from 29 disabledworker terminations per 1,000 disabled-worker beneficiaries to 6.7. A conversion termination
occurs when SSA automatically converts a disabled-worker benefit to a retired-worker benefit
due to a disabled worker reaching the FRA. Over this same period, the conversion rate fell 25%,
from 68 disabled-worker terminations per 1,000 disabled-worker beneficiaries to 51.
The rise in the recovery rate during the early 1980s stemmed mainly from the enactment of the
Social Security Disability Amendments of 1980 (P.L. 96-265), which expanded the use of
continuing disability reviews (CDR) for all non-permanently disabled beneficiaries.29 CDRs are
periodic medical reevaluations conducted to determine if beneficiaries continue to meet SSA’s
definition of disability. The frequency of CDRs is linked to a beneficiary’s probability of
recovery.30 A major review of the SSDI program after the passage of the 1980 amendments
28

Donna L. Hoyert, 75 Years of Mortality in the United States, 1935–2010, Centers for Disease Control and
Prevention: National Center for Health Statistics, 2012, http://www.cdc.gov/nchs/data/databriefs/db88.htm.
29
For more information on the 1980 amendments, see John R. Kearney, “Social Security and the ‘D’ in OASDI: The
History of a Federal Program Insuring Earners Against Disability,” Social Security Bulletin, vol. 66 no. 3 (August
2006), http://www.ssa.gov/policy/docs/ssb/v66n3/v66n3p1.html.
30
Disabled beneficiaries with a reasonable chance of recovery are scheduled to receive CDRs every three years.
Beneficiaries with a high probability of medical improvement are scheduled to receive CDRs at intervals between six
and 18 months, while beneficiaries with a low probability of medical improvement (permanently disabled) receive
CDRs less frequently (normally every five to seven years). For more information, see SSA, POMS, “DI 13005.010
(continued...)

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resulted in a marked increase in the recovery rate between 1980 and 1982.31 However, the
political backlash over the implementation of the reviews led to a temporary moratorium on
CDRs for most mental impairment cases as well as an increase in the percentage of beneficiaries
designated as “permanently disabled” and therefore subject to less frequent reviews.32 These
actions, coupled with changes to the disability determination and review process stemming from
the Social Security Disability Benefits Reform Act of 1984 (P.L. 98-460), contributed to the
subsequent decrease in the recovery rate.33
The 1997 increase in the recovery rate largely resulted from the passage of the Contract with
America Advancement Act of 1996 (P.L. 104-121), which terminated the benefits of SSDI and
SSI recipients whose drug addiction and alcoholism (DA&A) significantly contributed to their
disability.34 However, because DA&A beneficiaries represented less than 3% of all disabled
adults on SSDI and SSI in 1996 and new applicants could no longer claim disability based on
DA&A, P.L. 104-121’s impact on the overall trend in the SSDI recovery rate was minimal.35
Starting in 2002, the recovery rate contracted again, in part, because of a reduction in the number
of medical CDRs conducted by SSA. The Contract with America Advancement Act of 1996
authorized additional funds for CDRs but only for FY1996 through FY2002.36 In FY2003, the
additional funding for CDRs lapsed and SSA shifted its focus away from CDRs toward
processing the growing number of initial disability claims.37 As a result, the number of medical
CDRs performed by SSA dropped from an all-time high of 877,000 in FY2000 to 208,000 in
FY2007, before climbing back up to 526,000 in FY2014 (Figure 3).

(...continued)
Medical Improvement Diaries,” June 27, 2012, http://policy.ssa.gov/poms.nsf/lnx/0413005010.
31
According to SSA officials, the rise in the termination rate during the early 1980s is not entirely attributable to the
accelerated use of CDRs. An initiative begun in 1981 by SSA aggressively targeted beneficiaries whom the agency
deemed were unlikely to have a qualifying disability. This initiative, coupled with the increased use of CDRs, resulted
in an increase in the recovery rate in the early 1980s. For more information, see U.S. Government Accountability
Office (GAO), Social Security Disability Programs: Clearer Guidance Could Help SSA Apply the Medical
Improvement Standard More Consistently, GAO-07-8, October 3, 2006, p. 6, footnote 9, http://www.gao.gov/products/
GAO-07-8.
32
Kearney 2006, p. 16. See footnote 30.
33
The Disability Benefits Reform Act of 1984 (P.L. 98-460) enshrined some of the 1983 reforms into law. For more
information on how the 1984 amendments affected program participation, see the subsection of this report titled “The
Social Security Disability Benefits Reform Act of 1984.”
34
The act stopped awarding benefits to DA&A claimants on the day of enactment, March 29, 1996. DA&A
beneficiaries who appealed their termination continued to receive benefits while they waited for a decision. For more
information, see Paul Davies, Howard Iams, and Kalman Rupp, “The Effect of Welfare Reform on SSA’s Disability
Programs: Design of Policy Evaluation and Early Evidence,” Social Security Bulletin, vol. 63 no. 1 (July 2000), p. 4,
http://www.ssa.gov/policy/docs/ssb/v63n1/v63n1p3.pdf.
35
Ibid., p. 6.
36
See 42 U.S.C. §401(g)(1)(A).
37
SSA, Performance and Accountability Report for Fiscal Year 2003, November 10, 2003, p. 44, http://www.ssa.gov/
finance/2003/FY03_PAR.pdf.

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Figure 3. Number of Full Medical CDRs Conducted by SSA, FY1990-FY2014
(in thousands)

1,000
900
800
700
600
500
400
300

200
100
0
1990

1994

1998

2002

2006

2010

2014

Fiscal Year

Source: Compiled by CRS. Data for FY1990-FY2005 are from the Social Security Advisory Board (SSAB),
Aspects of Disability Decision Making: Data and Materials, February 2012, Chart 13. Data for FY2006-FY2007 are
from SSA, Performance and Accountability Report for Fiscal Year 2012, p. 80. Data for FY2008-FY2012 are from SSA,
Annual Performance Plan for Fiscal Year 2015 and Revised Performance Plan for Fiscal Year 2014 and Annual
Performance Report for Fiscal Year 2013, p. 119. Data for FY2013-FY2014 are from SSA, Agency Financial Report,
Fiscal Year 2014, p. 202.

Program Size
Between 1980 and 2013, the overall number of SSDI beneficiaries increased 134%, from 4.7
million to 11 million.38 Most of the growth in the program stemmed from disabled workers,
whose ranks tripled, from 2.9 million in 1980 to 9 million in 2013 (Figure 4). In contrast, the
number of spouses of disabled workers on SSDI decreased 66% during this period, from 462,000
in 1980 to 157,000 in 2013. The number of children receiving benefits grew rather modestly
compared with the number of disabled workers on SSDI, from 1.4 million children in 1980 to 1.9
million in 2013.

38

2014 Trustees Report, Table V.C5.

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Figure 4. SSDI Beneficiaries, by Type, 1980-2013
(in millions)

12
10
8
6

Children

Spouses

4
2
0
1980

Disabled Workers

1984

1988

1992

1996

2000

2004

2008

2012

Source: 2014 Trustees Report, Table V.C5, at http://www.ssa.gov/oact/tr/2014/lr5c5.html.
Notes: The category “Children” includes dependent children under age 18, dependent student children between
the ages of 18 and 19, and disabled adult children of disabled workers. Disabled adult children age 18 or older
can receive benefits if they are unmarried and their disability occurred before age 22. To qualify for spousal
benefits, the spouse of a disabled worker must either (1) have a child under age 16 or a disabled child in his or
her care, or (2) be at least age 62. Disabled widow(er)s and disabled adult children of retired and deceased
workers are not included in the graph above because their benefits are paid from the Old-Age and Survivors
Insurance (OASI) trust fund.

Prevalence Rates
The size of the SSDI rolls is largely the function of two factors: the incidence (enrollment) rate of
beneficiaries into the program and the termination rate of beneficiaries from the program. From
1980 to 2013, a marked rise in the incidence rate, coupled with a steady decline in the termination
rate, resulted in an appreciable increase in the number of beneficiaries on SSDI. The prevalence
rate measures the total number of disabled workers relative to the overall insured-worker
population at the end of the year. The insured-worker population is the sum of the disabilityexposed population and the number of individuals who are already receiving SSDI benefits.
Between 1980 and 2013, the gross (unadjusted) prevalence rate grew from 2.8% to 5.9% (Figure
5).39
When one adjusts the prevalence rate to control for the effects of changes in the age-sex
distribution of the insured-worker population, the upward trend is less pronounced. Age-sex
adjusting permits a more meaningful comparison over extended periods, insofar as it “isolates the
changing trend in the true likelihood of receiving benefits for the insured population, without
reflecting changes in the age distribution of the population.”40 From 1980 to 2013, the age-sexadjusted prevalence rate grew from 3.1% to 4.6%.

39
40

Ibid.
Ibid., p.136.

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Figure 5. Gross and Age-Sex-Adjusted Prevalence Rates, 1980-2013
(percentage of insured workers in receipt of SSDI benefits)
7%
6%

Gross (Actual)
Rate

5%

4%

Age-Sex Adjusted
Rate

3%
2%
1%
0%
1980

1984

1988

1992

1996

2000

2004

2008

2012

Source: 2014 Trustees Report, Table V.C5, at http://www.ssa.gov/oact/tr/2014/lr5c5.html.
Notes: The age-sex-adjusted rate is set to the age-sex distribution of the insured-worker population in 2000.
Insured workers are individuals who meet the work-history and contribution requirements for SSDI benefits.
The Social Security trustees denote prevalence rates per thousand insured workers, while the graph above refers
to prevalence rates per hundred insured workers.

Because the baby-boom generation is aging and older workers are more likely to qualify for
SSDI, the gross rate would have increased even if the rate for each age group remained constant.
The growth in the gross rate is due to both population aging (discussed below) and growth in the
age-sex adjusted rate. The gap between the age-sex-adjusted rate and the gross rate is the growth
that is attributable to changes in the age and sex distribution of the insured population.

Causes of the Growth in the SSDI Rolls
Ascribing shares of the growth in the SSDI program to specific factors has engendered
disagreement among researchers, advocates, and some Members of Congress.41 In general, people
who support higher spending on SSDI focus on changes in the demographic characteristics of
insured workers. In contrast, individuals who want to limit program spending typically focus on
41

For a range of views, see David H. Autor and Mark G. Duggan, “The Growth in the Social Security Disability Rolls:
A Fiscal Crisis Unfolding,” Journal of Economic Perspectives, vol. 20, no. 3 (Summer 2006), pp. 71-96,
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.20.3.71; Mary C. Daly, Brian Lucking, and Jonathan A. Schwabish,
“The Future of Social Security Disability Insurance,” FRBSF Economic Letter, June 24, 2013, http://www.frbsf.org/
economic-research/publications/economic-letter/2013/june/future-social-security-disability-insurance-ssdi/; Kathy
Ruffing, How Much of the Growth in Disability Insurance Stems from Demographic Changes?, Center on Budget and
Policy Priorities, January 27, 2014, http://www.cbpp.org/cms/?fa=view&id=4080; and testimony of SSA Chief Actuary
Stephen C. Goss, U.S. Congress, Senate Committee on Finance, Social Security: A Fresh Look at Workers’ Disability
Insurance, 113th Cong., 2nd sess., July 24, 2014, http://www.ssa.gov/legislation/testimony_072414a.html (hereinafter
cited as “Testimony of Stephen C. Goss, 2014”).

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the effect of changes in the economic incentives to apply for SSDI and legislative changes to the
program’s eligibility criteria.
As Figure 5 highlights, some of increase can be explained by demographic factors such as the
aging of the workforce; however, the increase in the age-sex-adjusted rate means the growth in
the SSDI rolls is also attributable to non-demographic factors, some of which are not well
understood. This section examines some of the more salient explanations for the growth in the
program and discusses other potential factors.

Changes in the Demographic Characteristics of Insured Workers
Growth in the Working-Age Population
One factor behind the increase in the total number of beneficiaries on SSDI is the overall growth
in the working-age population (Figure 6).42
Figure 6. Growth in the Population Aged 20-64, 1980-2013
(in millions)

250

200

Working-Age Population

150
Insured Population

100
50

0
1980

1984

1988

1992

1996

2000

2004

2008

2012

Source: Compiled by CRS. Working-age population data are from 2014 Trustees Report, Table V.A2. Insured
population data are from SSA, “Disability Insured Workers,” http://www.ssa.gov/OACT/STATS/index.html.
Note: Data are subject to revision.

From 1980 to 2013, the population ages 20-64 rose from 134 million to 192 million, while the
insured-worker population ages 20-64 grew from 94 million to 146 million.43 The growth in the
42

See David Pattison and Hilary Waldron, “Growth in New Disabled-Worker Entitlements, 1970–2008,” Social
Security Bulletin, vol. 73, no. 4 (November 2013), http://www.ssa.gov/policy/docs/ssb/v73n4/v73n4p25.html.
43
Insured population data are from SSA, “Disability Insured Workers,” accessed November 2014, http://www.ssa.gov/
OACT/STATS/index.html. Working-age population data are based on the Social Security Area Population for
individuals aged 20 to 64 from the 2014 Trustees Report, Table V.A2. The Social Security Area Population includes
(1) residents of the 50 states and the District of Columbia adjusted for net census undercount; (2) civilian residents of
Puerto Rico, the Virgin Islands, Guam, America Samoa, and Northern Mariana Islands; (3) federal civilian employees
and persons in the Armed Forces abroad and their dependents; (4) non-citizens living abroad who are insured for Social
Security benefits; and (5) all other U.S. citizens abroad.

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working-age population accounts for largest the share of the increase in the total number of
beneficiaries on SSDI.44

The Influx of Women into the Labor Force
The latter half of the 20th century witnessed a marked expansion of women in the workforce,
which has contributed to the growth in SSDI. Between 1950 and 1999, the annual labor force
participation rate for women age 16 and older nearly doubled, from 34% to an all-time high of
60%.45 As a result, the share of women ages 15-64 who were insured for disability increased from
51% in 1980 to 67% in 2014.46 The portion of men who were insured declined slightly over this
period, from 77% to 71% (Figure 7).
Figure 7. Percentage of the Population Ages 15-64 Insured for Disability, by Sex,
1980-2014
90%

Men

80%
70%
60%

Women

50%
40%
30%
20%
10%
0%
1980

1984

1988

1992

1996

2000

2004

2008

2012

Source: Compiled by CRS. Data for 1980-2010 are from SSAB, Aspects of Disability Decision Making: Data and
Materials, February 2012, Chart 2b. Data for 2011-2014 are from SSA, “Statistical Tables,” http://www.ssa.gov/
OACT/STATS/index.html.
Note: Data are subject to revision.

The growth in the share of women insured for disability coincided with an increase in the rate at
which insured women were awarded benefits. As Figure 8 shows, both male and female ageadjusted incidence rates increased markedly between the late 1980s and early 1990s. However,
male age-adjusted incidence rates declined following the 1990-1991 recession while female rates
held steady. Researchers refer to this trend as women’s “catch-up.”47 Since the late 1990s, ageadjusted incidence rates for women have been more or less at parity with men’s rates. Although
the reason for the gap between incidence rates during the 1980s is not entirely clear, researchers
44

See Testimony of Stephen C. Goss, 2014.
U.S. Bureau of Labor Statistics (BLS), Labor Force Statistics from the Current Population Survey,
http://data.bls.gov/timeseries/LNS11300002. In 2013, the annual labor force participation rate for women was 57%.
46
Figures reflect the working population aged 15-64. 1980 figure is from SSAB, Data and Materials 2012, Chart 2b.
2014 figure was computed using data from SSA, “Statistical Tables,” accessed December 2014, at http://www.ssa.gov/
OACT/STATS/index.html.
47
Daly, Lucking, and Schwabish, “The Future of Social Security Disability Insurance.”
45

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have speculated that past generations of women may have been less likely to know about SSDI
and more likely to turn to family members or means-tested programs, such as Aid to Families
with Dependent Children (AFDC), when affected by work-limiting impairments.48
Figure 8. Age-Adjusted Incidence (Enrollment) Rates by Sex, 1980-2013
(per 1,000 disability-exposed)

8
7

Men

6
5
4

Women

3

2
1
0
1980

1984

1988

1992

1996

2000

2004

2008

2012

Source: Compiled by CRS. Data for years 1980-2009 are from Tim Zayatz, Social Security Disability Insurance
Program Workers Experience, Actuarial Study No. 118, SSA, June 2005, and subsequent editions. Data for years
2010-2013 were calculated by CRS using data from SSA, Annual Statistical Supplement, 2011, 2012, and subsequent
editions.
Notes: Incidences rates are adjusted to the age distribution of the male and female disability-exposed
populations in 2000. The disability-exposed population is the total number of workers who are insured but not
currently receiving benefits.

The Aging of the Workforce
The aging of the large baby-boom generation—individuals born between 1946 and 1964—played
a marked roll in increasing the number of individuals on SSDI.49 Beginning in 1996, working-age
baby boomers increasingly aged and became more prone to disability, resulting in a shift in the
age distribution of the insured-worker population from younger workers to older workers.50 This
48

Ruffing, footnote 6. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193)
replaced the AFDC program with the Temporary Assistance for Needy Families block grant. For more information, see
CRS Report R40946, The Temporary Assistance for Needy Families Block Grant: An Overview, by (name redacted).
49
2014 Trustees Report, p. 135. See also Xuguang (Steve) Guo and John F. Burton, Jr., “The Growth in Applications
for Social Security Disability Insurance: A Spillover Effect from Workers’ Compensation,” Social Security Bulletin,
vol. 72 no. 3 (August 2012), http://www.ssa.gov/policy/docs/ssb/v72n3/v72n3p69.html (hereinafter cited as “Guo and
Burton 2012”).
50
See CBO, Policy Options for the Social Security Disability Insurance Program, July 2012, p. 7, http://www.cbo.gov/
publication/43421 (hereinafter cited as “CBO, Policy Options 2012”). See also Mark Duggan and Scott A. Imberman,
“Why Are the Disability Rolls Skyrocketing? The Contribution of Population Characteristics, Economic Conditions,
and Program Generosity,” in Health at Older Ages: The Causes and Consequences of Declining Disability Among the
Elderly, ed. David M. Cutler and David A. Wise, National Bureau of Economic Research (University of Chicago Press,
2009), pp. 342-345, http://www.nber.org/chapters/c11119.

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shift helped to increase the gross incidence and prevalence rates, inasmuch as older workers have
a higher likelihood of benefit receipt relative to younger workers.51 Between 1996 and 2013, the
portion of SSDI awards to disabled workers ages 50 to FRA increased from 54% to 66% (Figure
9).52 One reason for this is that older workers report suffering from work-limiting disabilities at
higher rates relative to younger workers.53
Figure 9. Percentage Distribution of SSDI Awards, by Age, 1980-2013
100%

60 to FRA

90%
80%

70%

50-59

60%
50%
40%

40-49

30%

20%

30-39

10%
0%
1980

Under 30
1984

1988

1992

1996

2000

2004

2008

2012

Source: SSA, Annual Statistical Report on the Social Security Disability Insurance Program, 2013, 2014, Table 39,
http://www.ssa.gov/policy/docs/statcomps/di_asr/2013/sect03c.html#table39.
Note: The full retirement age (FRA) was 65 for people born before 1938 and increased to 66 for those born
from 1943 through 1954.

Another factor is that the definition of disability is effectively less strict at higher ages. In making
a disability determination, DDS examiners take into account the claimant’s medical condition as
well as vocational factors such as age, education, residual functional capacity, and work
experience. Under its regulations, SSA considers advancing age to be a limiting factor in a
claimant’s ability to adjust to other work.54 Therefore, older workers are more likely to receive
benefits than are younger workers, even if they have the same disability. The trustees expect the
gross prevalence rates to grow at a slower pace in the future as baby boomers increasingly
become eligible for full Social Security retirement benefits.55

51

2014 Trustees Report, p. 136. See also CBO, Policy Options 2012, p. 7.
SSA, SSDI Annual Report 2013, Table 39.
53
“Prevalence and Most Common Causes of Disability Among Adults—United States, 2005,” Morbidity and Mortality
Weekly Report (MMWR), vol. 58, no. 16 (May 1, 2009), pp. 421-426, Table 1, http://www.cdc.gov/mmwr/preview/
mmwrhtml/mm5816a2.htm.
54
See 20 C.F.R. §404.1563.
55
2014 Trustees Report, p. 127.
52

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Changes in Opportunities for Work and Compensation
Changes in financial incentives also contributed to the growth in the program.56 In deciding
whether to apply, workers compare the value of SSDI benefits (cash payments and health
coverage) with their opportunities for work and compensation. When the economy is strong,
more individuals who could qualify for SSDI might decide to seek or continue employment. On
the other hand, when labor market conditions are adverse, more individuals may find SSDI
benefits preferable to the jobs and compensation available to them in the economy. Although the
initial determination process screens out most non-meritorious claimants, SSA may grant awards
to some claimants on the margin of program entry who could potentially work but choose not to
due to economic circumstances. This subsection outlines how changes in the financial incentives
to apply for SSDI likely increased the incidence of benefit receipt.

High Unemployment
During periods of economic weakness, individuals who might otherwise choose to work may be
more likely to apply for SSDI benefits as a form of unemployment assistance. There is a positive
relationship between the unemployment rate and the SSDI application rate.57 With the exception
of the period between 1980 and 1984, instances of high unemployment are associated with an
increase in SSDI applications. As shown in Figure 10, the recent recession (December 2007 to
June 2009) contributed to a conspicuous spike in the number of SSDI applications submitted to
SSA; between 2007 and 2010, applications for SSDI increased 32%, from 2.2 million to 2.9
million.58
The relationship between the unemployment rate and the approval rate is somewhat more
ambiguous, inasmuch as the award year may not coincide with the application year due to a
prolonged determination and appeals process.59 Several studies have found an inverse relationship
between the approval rate and the unemployment rate.60 In other words, a claimant’s likelihood of
receiving an award at the initial determination level decreases as the unemployment rate rises.
This is thought to occur because adverse labor market conditions induce more marginally

56

See Till von Wachter, Jae Song, and Joyce Manchester, “Trends in Employment and Earnings of Allowed and
Rejected Applicants to the Social Security Disability Insurance Program,” American Economic Review, vol. 101, no. 7
(December 2011), pp. 3308-3329.
57
See Kalman Rupp and David Stapleton, “Determinants of the Growth in the Social Security Administration’s
Disability Programs—An Overview,” Social Security Bulletin, vol. 58, no. 4 (October 1995), http://www.ssa.gov/
policy/docs/ssb/v58n4/v58n4p43.pdf; David H. Autor and Mark G. Duggan, “The Rise in the Disability Rolls and the
Decline in Unemployment,” The Quarterly Journal of Economics, February 2003, pp. 158-205; Duggan and Imberman,
“Why Are the Disability Rolls Skyrocketing?,” p. 356; and Guo and Burton 2012, p. 80.
58
SSA, Annual Statistical Supplement 2014, Table 6.C7.
59
Duggan and Imberman, “Why Are the Disability Rolls Skyrocketing?,” p. 355
60
Kalman Rupp, “Factors Affecting Initial Disability Allowance Rates for the Disability Insurance and Supplemental
Security Income Programs: The Role of the Demographic and Diagnostic Composition of Applicants and Local Labor
Market Conditions,” Social Security Bulletin, vol. 72 no. 4 (November 2012), p. 32, http://www.ssa.gov/policy/docs/
ssb/v72n4/v72n4p11.html. Rupp found that an increase in the state unemployment rate is associated with a decrease in
the initial allowance rate. The allowance rate is the number of medical allowances divided by the number of medical
decisions. Unlike the award rate (awards divided by applications minus pending claims), the allowance rate does not
include technical denials at the initial determination level. Technical denials are issued when a claimant fails to meet
the non-medical eligibility requirements for SSDI. See also Stephen C. Goss et al., Disabled Worker Allowance Rates:
Variation Under Changing Economic Conditions, SSA, Office of the Chief Actuary, Actuarial Note No. 153, August
2013, http://www.ssa.gov/oact/NOTES/pdf_notes/note153.pdf.

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disabled individuals to apply for benefits.61 Nevertheless, the overall number of SSDI awards
issued by SSA appears to increase during economic downturns.62 One possible reason for this is
that some individuals who could qualify for SSDI but choose instead to work when the economy
is strong are often less likely to find reemployment opportunities following a job loss when the
unemployment rate is high.63 Between 2007 and 2010, the number of SSDI awards granted by
SSA increased 22%, from 819,000 to 1 million.64
Figure 10. SSDI Applications and Awards During Economic Downturns, 1980-2013
(in millions)

3.5

12%

3.0

10%

2.5

Unemployment
Rate

2.0

8%
6%

1.5

4%

1.0

Applications

Awards

0.5

0.0
1980

2%

0%
1984

1988

1992

1996

2000

2004

2008

2012

Source: Application and Award data compiled from SSA, Annual Statistical Supplement, 2014, Table 6.C7,
http://www.ssa.gov/policy/docs/statcomps/supplement/2014/6c.html#table6.c7. Unemployment data are from the
Bureau of Labor Statistics (BLS). Recession data are from the National Bureau of Economic Research (NBER).
Notes: The unemployment rate is the number of all unemployed individuals ages 16 and older as a percentage of
the civilian non-institutionalized labor force. BLS considers individuals to be unemployed if they (1) do not have
jobs, (2) have actively looked for work in the past four weeks, and (3) are currently available for work. Shaded
areas indicate a recession. NBER defines recession as a “significant decline in economic activity spread across the
economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income,
employment, industrial production, and wholesale-retail sales.”

The Value of Cash Benefits
Over the past few decades, SSDI appears to have become more attractive to lower-skilled
workers because their potential SSDI benefits replace a larger portion of their earnings than
before. The share of a worker’s pre-disability earnings replaced by cash benefits is known as the
replacement rate.65 Although the replacement rate depends on a worker’s past earnings, the Social
61

Rupp 2012.
See Rupp and Stapleton, “Determinants of the Growth in the Social Security Administration’s Disability Programs,”
p. 56.
63
Goss et al., Disabled Worker Allowance Rates, p. 1, footnote 1.
64
SSA, Annual Statistical Supplement 2014, Table 6.C7.
65
The computed replacement rate depends on the measure of pre-disability earnings. For more information, see
Andrew G. Biggs and Glenn R. Springstead, “Alternate Measures of Replacement Rates for Social Security Benefits
(continued...)
62

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Security benefit formula also reflects changes in the average earnings of all workers in the
national economy, as measured by the Average Wage Index (AWI).66 Due to the progressive
nature of the benefit formula, replacement rates are greater for workers with low lifetime wages
than for high-wage workers (Table 1).67
Table 1. Hypothetical Disabled-Worker Replacement Rates at Age 55
(by lifetime earnings level)
Lifetime Average Earningsa

Annual SSDI Benefitb

Earnings Replaced

$10,000

$8,856

89%

$20,000

$12,048

60%

$30,000

$15,240

51%

$40,000

$18,432

46%

$50,000

$21,624

43%

$60,000

$24,672

41%

Maximumc

$32,040

28%

Source: Michael Clingman, Kyle Burkhalter, and Chris Chaplain, Illustrative Benefits for Retired Workers, Disabled
Workers, and Survivors Scheduled Under Current Law, SSA, Office of the Chief Actuary, Actuarial Note No. 2014.4,
October 2014, Table 2, at http://www.ssa.gov/oact/NOTES/ran4/index.html.
Notes: Scaled earnings patterns reflect the actual work experience of insured workers during 1991-2010.
a. “Lifetime Average Earnings” reflect the average of the highest 35 years of earnings (wage-indexed to 2013
levels) expected for a hypothetical worker who survives to age 65 without having a period of disability.
b. Entitlement to benefit in 2014.
c. Refers to workers with earnings equal to the taxable maximum for each year through 2013. The taxable
maximum in 2013 was $113,700.

Some part of the growth in SSDI is driven by rising replacements rates for low-skilled workers,
which have made SSDI benefits more desirable than work for an increasing share of workers.68
The increase in the relative attractiveness of SSDI benefits was likely strongest for low-wage
workers, because they experienced slower real earnings growth over the last three decades than
medium and high-wage workers.69 This increase in wage inequality has interacted with the
structure of the benefits formula to increase replacement rates for lower-skilled workers.70 That
means that SSDI is more attractive to those workers than it had been in the past.

(...continued)
and Retirement Income,” Social Security Bulletin, vol. 68, no. 2 (October 2008), http://www.ssa.gov/policy/docs/ssb/
v68n2/v68n2p1.html.
66
See SSA, “National Average Wage Index,” http://www.ssa.gov/oact/cola/AWI.html.
67
For more information on how benefits are calculated, see CRS Report R43542, How Social Security Benefits Are
Computed: In Brief, by Noah P. Meyerson.
68
Autor and Duggan, “The Growth in the Social Security Disability Rolls.” See also Daly, Lucking, and Schwabish,
“The Future of Social Security Disability Insurance.”
69
See Autor and Duggan, “The Rise in the Disability Rolls and the Decline in Unemployment.” Between 1979 and
2009, the real weekly earnings of low-wage workers (20th percentile) grew 6.6%, whereas the real weekly earnings of
medium (60th percentile) and high-wage workers (95th percentile) increased 16% and 29%, respectively. For more
information, see CRS Report RL33835, Real Earnings, Health Insurance and Pension Coverage, and the Distribution
of Earnings, 1979-2009, by (name redacted)
. Estimates are for full-time, year-round workers.
70
Autor and Duggan, “The Growth in the Social Security Disability Rolls,” Table 2. See L. Scott Muller, “The Effects
(continued...)

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While researchers generally agree that replacement rates “are rising due to the widening
distribution of income,” there is some disagreement over the extent to which this increase induced
low-wage workers to apply for SSDI benefits.71

The Value of Health Coverage
Access to affordable health coverage also affects an individual’s decision to apply for SSDI, but
the net effect of changes in health policies on SSDI is unclear.72 As noted earlier, disabled
workers and certain dependents are eligible for coverage under Medicare after 24 months of
entitlement to cash benefits (29 months after disability onset). Congress extended Medicare to
SSDI beneficiaries under the Social Security Amendments of 1972 (P.L.92-603) because the “use
of health services by people who are severely disabled is substantially higher than that by the
nondisabled ... yet the disabled have limited incomes in comparison to those who are not
disabled, and most disabled persons are unable financially to purchase adequate private health
insurance protection.”73
Health care is generally more expensive for individuals with disabilities. One study found that
health care expenditures per capita were over four times greater for workers with disabilities than
those without disabilities.74 Persons with disabilities have higher health care expenditures because
they typically use more health services and have secondary conditions that further impair overall
health.75 These higher costs can make health care coverage prohibitively expensive for some
individuals with disabilities.76 In 2013, 39% of individuals with disabilities had private health
insurance coverage, compared with 71% of individuals without disabilities.77 The lower coverage
rate for individuals with disabilities under private health insurance is due, in part, to the
availability of government-sponsored health care coverage under Medicare and Medicaid.
Some research suggests that the desire to gain access to Medicare induced some individuals with
disabilities to apply for SSDI.78 However, it is difficult to know exactly how many individuals
(...continued)
of Wage Indexing on Social Security Disability Benefits,” Social Security Bulletin, vol. 68 no. 3 (December 2008),
http://www.ssa.gov/policy/docs/ssb/v68n3/v68n3p1.html.
71
Muller, “The Effects of Wage Indexing on Social Security Disability Benefits,” p. 25. See also Autor and Duggan,
“The Growth in the Social Security Disability Rolls,” pp. 82-83. Muller contends that “the magnitude of the increases
in replacement rates, on average, does not seem to offer large incentives to leave work for disability benefits.” Autor
and Duggan argue that the high-wage replacement of SSDI benefits relative to available compensation makes SSDI
enrollment particularly attractive to low-income workers.
72
See Jae Kennedy and Elizabeth Blodgett, Health Insurance–Motivated Disability Enrollment and the ACA, The New
England Journal of Medicine, September 20, 2012, http://www.nejm.org/doi/full/10.1056/NEJMp1208212.
73
U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1971, report to accompany
H.R. 1, 92nd Cong., 1st sess., May 26, 1971, H.Rept. 92-231 (Washington: GPO, 1971), p. 67.
74
David Stapleton and Su Liu, “Will Health Care Reform Increase the Employment of People with Disabilities?,”
Mathematica Policy Research, Inc, Center for Studying Disability Policy, November 2009, http://www.mathematicampr.com/~/media/publications/PDFs/disability/healthcarereform.pdf.
75
Wayne L. Anderson et al., “Estimates of National Health Care Expenditures Associated with Disability,” Journal of
Disability Policy Studies, vol. 21, no. 4 (March 2011), pp. 230-240.
76
See Jody Schimmel Hyde and Gina A. Livermore, “Gaps in Timely Access to Care Among Workers by Disability
Status: Will the Patient Protection and Affordable Care Act Reforms Change the Landscape?,” Journal of Disability
Policy Studies, August 28, 2014.
77
U.S. Census Bureau, Type of Health Insurance Coverage for Working-Age Adults: 2013, Table 3,
http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2013/tables.html.
78
Autor and Duggan, “The Rise in the Disability Rolls and the Decline in Unemployment,” Table 1, p. 165. See also
(continued...)

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awarded SSDI were motivated to apply in order to gain access to Medicare. One study found that
22% of SSDI beneficiaries ages 18-64 lacked health insurance coverage prior to their entitlement
to SSDI.79
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) is likely to
influence SSDI application rates in the future, though the law’s net effect on the SSDI prevalence
rate is difficult to determine.80 On the one hand, the ACA may reduce SSDI applications by
increasing access to affordable health coverage, making access to Medicare less valuable. On the
other hand, the ACA may increase SSDI applications by making it easier for individuals who get
health coverage through their work to apply, because they could obtain Medicaid coverage or
subsidized coverage in the exchange during the 24-month waiting period for Medicare.81 Recent
research indicates that the health care law’s effect on SSDI application rates is likely to vary by
locality due to factors such as (1) the availability of Medicaid in a state, (2) local health insurance
coverage rates,82 and (3) the availability and type of state Medicaid buy-in programs.83

Changes in Federal Policy
In addition to demographic and economic changes, various amendments to the Social Security
program played a role in increasing the number of people on SSDI. While some of the changes to
Social Security were designed to address specific issues with SSDI, modifications to other parts
of the program indirectly affected the incentives for individuals to apply for disability benefits.
The following subsection examines how changes in the full retirement age for Social Security
retired-worker benefits and in the evaluative criteria used to determine disability contributed to
the growth in the SSDI rolls.

(...continued)
Autor and Duggan, “The Growth in the Social Security Disability Rolls,” p. 81. The authors contend that the rising
value of Medicare benefits increased total replacement rates (cash benefits and health coverage), which, in turn,
induced some individuals to leave the labor force and apply for SSDI benefits.
79
Gina Livermore, David Stapleton, and Henry Claypool, Health Insurance and Health Care Access Before and After
SSDI Entry, The Commonwealth Fund, May 2009, p. 17, http://www.commonwealthfund.org/~/media/Files/
Publications/Fund%20Report/2009/May/
Livermore%20Health%20Insurance%20and%20Health%20Care%20Access%20Before%20and%20After/
1255_Livermore_hlt_ins_hlt_care_access_before_after_SSDI_entry.pdf.
80
CBO, Policy Options 2012, p. 5. For more information on the ACA, see CRS Report R43048, 2013 Overview of
Private Health Insurance Provisions in the Patient Protection and Affordable Care Act (ACA), by (name redacted)and
CRS Report R43564, The ACA Medicaid Expansion, by (name redacted).
81
CBO, Policy Options 2012, p. 6.
82
Nicole Maestas, Kathleen J. Mullen, and Alexander Strand, “Disability Insurance and Health Insurance Reform:
Evidence from Massachusetts,” American Economic Review, vol. 104, no. 5 (May 2014), pp. 329-335. See also RAND
Corporation, Effects of Health Care Reform on Disability Insurance Claiming, 2014, http://www.rand.org/content/dam/
rand/pubs/research_briefs/RB9700/RB9769/RAND_RB9769.pdf.
83
Melissa McInerney, The Medicaid Buy-In and Social Security Disability Insurance (DI) Beneficiaries: Lessons for
the 2014 Medicaid Expansion and Proposals to Reform DI, Center for Retirement Research, December 2013, p. 18,
footnote 25, http://crr.bc.edu/wp-content/uploads/2013/10/wp_2013-20.pdf. Medicaid buy-in programs allow certain
employed individuals with disabilities to obtain health care coverage through Medicaid when employer-sponsored
health insurance is not available. For more information on Medicaid buy-in programs, see Matthew Kehn, Enrollment,
Employment, and Earnings in the Medicaid Buy-In Program, 2011, Mathematica Policy Research, May 20, 2013,
http://www.mathematica-mpr.com/~/media/publications/PDFs/health/medicaid_buyin_enrollment.pdf.

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The Social Security Amendments of 1983
The Social Security retirement program faced serious financial challenges in the early 1980s.
High inflation and low wage growth starting in the 1970s had eroded the balance of the OASI
trust fund, which finances the benefits and administrative costs of the OASI program. 84 In 1982,
the Social Security trustees projected that the OASI trust fund would exhaust by the middle of
1983.85
To improve the financial condition of the OASI trust fund, Congress enacted the comprehensive
Social Security Amendments of 1983 (P.L. 98-21). Among the 1983 amendments’ many
substantial changes was an increase in the FRA from 65 to 67.86 Between 2002 and 2009, the
FRA gradually increased until it reached 66 for workers born between 1943 and 1954. The FRA
is scheduled to rise again, reaching 67 for workers born in 1960 and later.
Raising the FRA reduced OASI spending but increased DI spending in several ways.87 First, it
increased the number of workers who are eligible for SSDI. From 2003 to 2014, the number of
insured workers ages 65-FRA rose from over 200,000 to more than 2.4 million.88 Because
workers aged 65-FRA are more likely to have a qualifying disability, the increase in the number
of insured workers led to an increase in the number of workers awarded benefits. In 2013, over
7,400 workers aged 65-FRA were awarded benefits.89
Second, the increase in the FRA lengthened the duration of benefit receipt for SSDI recipients
near retirement age.90 Disabled workers move from SSDI to OASI when they reach the FRA. As
the FRA increased above 65, beneficiaries remained on SSDI longer. In December 2013, over
455,000 disabled workers ages 65-FRA received benefits.91
Third, the rise in the FRA increased the value of SSDI cash benefits relative to early retirement
benefits.92 Insured workers who choose to retire between the ages of 62 and FRA are subject to a
permanent reduction in their monthly cash benefits.93 Prior to the 1983 amendments, the
reduction for claiming retirement benefits at age 62 was 20%; with the increase in the FRA to 66,
the reduction at age 62 rose to 25%.94 That reduction will rise to 30% for workers whose FRA is
84

Legislative changes to the program that increased benefit amounts also contributed to the OASI trust fund’s
imbalance. For more information, see Patricia P. Martin and David A. Weaver, “Social Security: A Program and Policy
History,” Social Security Bulletin, vol. 66, no. 1 (2005), http://www.ssa.gov/policy/docs/ssb/v66n1/v66n1p1.html.
85
U.S. Congress, House Committee on Ways and Means, 1982 Annual Report, Federal Old-Age and Survivors
Insurance and Disability Insurance Trust Funds, prepared by Board of Trustees, Federal Old-Age and Survivors
Insurance and Disability Insurance Trust Funds, 97th Cong., 2nd sess., April 1, 1982, http://www.ssa.gov/history/reports/
trust/1982/1982.pdf.
86
See John A. Svahn and Mary Ross, “Social Security Amendments of 1983: Legislative History and Summary of
Provisions,” vol. 46, no. 7 (July 1983), http://www.ssa.gov/policy/docs/ssb/v46n7/v46n7p3.pdf. The FRA is the age at
which unreduced retirement benefits are first payable.
87
Although it may have reduced the overall balance of the DI trust fund, the increase in the FRA also raised payroll tax
revenues to the DI trust fund due to some people working longer before applying for full retirement benefits. For more
information, see CBO, Policy Options 2012, p. 9.
88
SSA, “Disability Insured Workers,” http://www.ssa.gov/oact/STATS/table4c2DI.html.
89
SSA, SSDI Annual Report 2013, Table 36.
90
CBO, Policy Options 2012, p. 9.
91
SSA, SSDI Annual Report 2013, Table 2.
92
Svahn and Ross, “Social Security Amendments of 1983.”
93
See SSA, “Early or Late Retirement?,” November 25, 2008, http://www.ssa.gov/OACT/quickcalc/early_late.html.
94
For additional information on the reduction in benefits at age 62, see SSA, “Retirement Planner: Benefits by Year of
Birth,” http://www.socialsecurity.gov/retire2/agereduction.htm.

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67. Because SSDI benefits are approximately the same as full retirement benefits, the increase in
the FRA likely impelled some additional workers to apply for SSDI benefits in order to maximize
their total cash benefits. Although recent studies suggest that an increase in the value of disability
benefits relative to early retirement benefits induces individuals to apply for SSDI benefits,
researchers are divided over whether such individuals are actually awarded benefits.95

The Social Security Disability Benefits Reform Act of 1984
As noted earlier, the Social Security Disability Amendments of 1980 (P.L. 96-265) markedly
expanded the use of continuing disability reviews (CDRs) as a means of reducing the growth in
program costs. CDRs are periodic medical reevaluations conducted to determine if beneficiaries
are still disabled. Between January 1982 and fall 1984, SSA issued benefit termination notices to
490,000 of the 1.2 million SSDI beneficiaries subjected to a CDR.96 However, the rise in
beneficiary terminations due to CDRs sparked a degree of public outcry and had “a very
damaging effect on the public perception of SSA’s administration of the disability program.”97
News stories at the time often depicted the financial and emotional difficulties faced by recently
terminated beneficiaries and their dependents.98 Ultimately, of the 490,000 beneficiaries who
received termination notices, approximately 200,000 had their benefits reinstated on appeal.99
In response to the contention over the increased use of CDRs, Congress unanimously enacted the
Social Security Disability Benefits Reform Act of 1984 (DBRA; P.L. 98-460). DBRA changed
the statutory standards for evaluating disability in a variety of ways.100 First, it revised the
medical eligibility criteria for CDRs so that SSA could terminate the benefits of a recipient due to
medical improvement only if the agency found substantial evidence of medical improvement
related to the recipient’s ability to work since the most recent favorable determination.101 Under
95

See Norma B. Coe and Kelly Haverstick, Measuring the Spillover to Disability Insurance Due to the Rise in the Full
Retirement Age, Center for Retirement Research at Boston College, December 2010, pp. 9-14, http://crr.bc.edu/
working-papers/measuring-the-spillover-to-disability-insurance-due-to-the-rise-in-the-full-retirement-age/. In addition,
see Mark Duggan, Perry Singleton, and Jae Song, Aching to Retire? The Rise in the Full Retirement Age and its Impact
on the Disability Rolls, National Bureau of Economic Research, Working Paper 11811, December 2005,
http://www.nber.org/papers/w11811. Using aggregate data, Duggan, Singleton, and Song found that the 1983
amendments increased SSDI enrollment by 0.58 percentage points for men (ages 45-64) and 0.89 percentage points for
women (ages 45-64) between 1983 and 2005. Using disaggregate data, Coe and Haverstick found that a one percentage
point decrease in the ratio of retirement to disability benefits resulted in a 0.28 percentage point increase in the twoyear SSDI application rate for individuals born between 1938 and 1943. However, the researchers found no evidence
that the increase in the FRA resulted in a rise in the incidence of SSDI receipt among individuals ages 55-FRA born
between 1938 and 1941. (The 1942 and 1943 cohorts had not reached FRA.)
96
Kearney 2006, p. 14.
97
Ibid., p. 15.
98
“Cutoffs for Mentally Ill Bring Moratorium Plea,” The New York Times, April 9, 1983, http://www.nytimes.com/
1983/04/10/us/cutoffs-for-mentally-ill-bring-moratorium-plea.html?n=
Top%2fReference%2fTimes%20Topics%2fSubjects%2fF%2fFinances. See also Edward D. Berkowitz, Disabled
Policy: America’s Programs for the Handicapped (New York City: Cambridge University Press, 1987), pp. 128-130
(hereinafter cited as “Berkowitz 1987”).
99
Berkowitz 1987, p.127.
100
See Katharine P. Collins and Anne Erfle, “Social Security Disability Benefits Reform Act of 1984: Legislative
History and Summary of Provisions,” Social Security Bulletin, vol. 48, no. 4 (April 1985), p. 5, http://www.ssa.gov/
policy/docs/ssb/v48n4/v48n4p5.pdf.
101
Department of Health and Human Services (HHS), SSA, “Supplemental Security Income; Disability and Blindness
Determinations,” 50 Federal Register 35038, December 6, 1985. The legal standard for determining if disability
continues is known as the Medical Improvement Review Standard (MIRS). For more information , see SSA, POMS,
“DI 28005.001 Legal Standard for Determining If Disability Continues ,” July 31, 2014, http://policy.ssa.gov/poms.nsf/
(continued...)

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the 1980 amendments, SSA had treated medical CDRs as a new determination and could revoke
benefits even if a beneficiary’s health had not changed.
Second, it required the Secretary of Health and Human Services to revise the criteria under the
“mental disorders” category in the Listing of Impairments.102 Before the reforms, disability
determinations relied primarily on medical factors, which tended to disadvantage claimants with
mental impairments from benefit receipt. The revised listings for mental impairments—first
published in 1985103—“reduced the weight given to medical factors and put a greater weight on
functional capacities, such as the applicant’s ability to perform activities of daily living.”104
Third, it required SSA to consider the combined effect of multiple non-severe impairments on the
claimant’s ability to engage in SGA.105 Prior to DBRA, a disability determination could not
proceed unless the claimant had one or more independently severe impairments.106 Lastly, DBRA
provided a temporary statutory standard (through the end of 1986) for evaluating pain. Before the
reforms, there was no “specific statement in the law” as to how pain should be evaluated.107 SSA
issued new pain regulations in 1991.108
In enacting DBRA, Congress sought to protect the rights of “those correctly and properly allowed
on the rolls” while continuing to remove non-meritorious beneficiaries from the program.109 To
accomplish this, Congress established a national, uniform process for determining disability,
which complemented objective medical criteria with more subjective criteria such as pain and
functional capacity. Congress, though, explicitly stated that the intent of DBRA was not to change
the basic standard of eligibility for SSDI.110
Nevertheless, a number of researchers argue that despite Congress’s intention, the establishment
of new evaluative criteria contributed to the growth in the disability rolls by making it easier for
claimants with “difficult-to-verify” impairments to qualify for SSDI, such as mental and
musculoskeletal disorders.111 For example, the revision to the “mental disorders” category in the
(...continued)
lnx/0428005001.
102
For information on the Listing of Impairments, please see the SSA publication Disability Evaluation Under Social
Security, available at http://www.ssa.gov/disability/professionals/bluebook/. This publication is commonly referred to
as the Blue Book. Prior to March 31, 1995, SSA was under the auspices of HHS (previously the Department of Health,
Education and Welfare). For more information on SSA’s organizational history, see SSA, “Organizational History,”
http://www.ssa.gov/history/orghist.html.
103
HHS, SSA, “Federal Old-Age, Survivors, and Disability Insurance; Listing of Impairments—Mental Disorders,” 50
Federal Register 35038, August 28, 1985.
104
Kearney, “Social Security and the ‘D’ in OASDI,” p. 17.
105
HHS, SSA, “Disability Insurance and Supplemental Security Income; Determining Disability and Blindness;
Multiple Impairments,” 56 Federal Register 8726, March 5, 1985.
106
SSA, A History of the Social Security Disability Programs, January 1986, http://www.ssa.gov/history/
1986dibhistory.html. For more information on the distinction between severe and non-severe impairments, please see
SSA, POMS, “DI 22001.015 Severe/Non-Severe Impairment(s),” March 12, 2013, http://policy.ssa.gov/poms.nsf/lnx/
0422001015.
107
U.S. Congress, Senate Committee on Finance, Social Security Disability Amendments of 1984, report to accompany
S. 467, 98th Cong., 2nd sess., May 18, 1984, S.Rept. 98-466, p. 23, http://www.finance.senate.gov/library/reports/
committee/ (hereinafter cited as “1984 Senate Committee on Finance Report”).
108
HHS, SSA, “Evaluation of Symptoms, Including Pain,” 56 Federal Register 57928, November 14, 1991.
109
1984 Senate Committee on Finance Report, pp. 6-7.
110
Ibid. See also U.S. Congress, House Committee on Ways and Means, Social Security Disability Benefits Reform Act
of 1984, report to accompany H.R. 3755, 98th Cong., 2nd sess., March 14, 1984, H.Rept. 98-618, p. 6.
111
David H. Autor, The Unsustainable Rise of the Disability Rolls in the United States: Causes, Consequences, and
(continued...)

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Listing of Impairments, which gave greater weight to functional capacities, may have permitted
more claimants with mental impairments to qualify for SSDI. Similarly, the allowance of the
combined effect of multiple non-severe impairments and the evaluation of pain may have made it
easier for claimants suffering from musculoskeletal disorders (impairments involving bones,
muscles, tendons, or ligaments) to enroll in the program.
As Figure 11 illustrates, the percentage of awards due to mental and musculoskeletal
impairments increased markedly following the passage of DBRA. Between 1985 and 2001, the
share of newly awarded beneficiaries with mental impairments increased from 18% to 26%
before declining to 17% in 2013.112 According to one researcher at SSA, the increase in awards
resulting from mental disorders in 1986 “is directly attributable to changes in the decision making
process due to the 1984 Social Security Disability Benefits Reform Act.”113 From 1986 to 2012,
the share of all beneficiaries with mental impairments increased from 24% to 31%.114

(...continued)
Policy Options, MIT and NBER, November 2011, p. 5, http://economics.mit.edu/files/6880. See also Autor and
Duggan, “The Growth in the Social Security Disability Rolls,” p. 11; Duggan and Imberman, “Why Are the Disability
Rolls Skyrocketing?”; and U.S. Congress, House Committee on Ways and Means, Subcommittee on Social Security,
Fifth in a Hearing Series on Securing the Future of the Social Security Disability Insurance Program, Testimony of
Richard Burkhauser, Ph.D., 112th Cong., 2nd sess., September 14, 2012, http://waysandmeans.house.gov/uploadedfiles/
burkhauser_testimony_ss914.pdf (hereinafter cited as “Testimony of Richard Burkhauser, 2012”).
112
SSA, SSDI Annual Report 2013, Table 40.
113
L. Scott Muller et al., Trends in the Social Security and Supplemental Security Income Disability Programs, SSA,
August 2006, p. 44, http://www.ssa.gov/policy/docs/chartbooks/disability_trends/index.html.
114
HHS, SSA, Annual Statistical Supplement, 1987, December 1987, Table 103, (hereinafter cited as “SSA, Annual
Statistical Supplement 1987”) and SSA, SSDI Annual Report 2013, Table 21.

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Figure 11. Percentage Distribution of SSDI Awards, by Diagnostic Group, 1981-2013
100%

Musculoskeletal

90%
80%
70%

Mental Disorders

60%

Circulatory

50%
40%

Cancer
Respiratory

30%

Nervous System
20%
10%
0%
1981

Other

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

Source: SSA, Annual Statistical Report on the Social Security Disability Insurance Program, 2013, 2014, Table 40,
http://www.ssa.gov/policy/docs/statcomps/di_asr/2013/sect03c.html#table40.
Notes: For information on the diagnostic categories, see the Listing of Impairments in the SSA publication
Disability Evaluation Under Social Security, available at http://www.SSA.gov/disability/professionals/bluebook/. This
publication is commonly referred to as the Blue Book.

The change in musculoskeletal impairments was even more pronounced. Between 1985 and 1994,
awards based on musculoskeletal disorders remained roughly constant, rising from 13% to
13.4%. However, due to a change in the reporting method for awards, the percentage of awardees
with musculoskeletal impairments jumped to 22% in 1995, later increasing to 36% in 2013.115
From 1986 to 2013, the share of all beneficiaries with musculoskeletal impairments grew from
18% to 31%.116
For an alternative perspective, Figure 12 shows the change in the incidence of various diagnostic
groups over time. Although the incidence of other diagnostic groups, such as circulatory-related
disabilities, stayed roughly constant over the past 30 years, the growth in musculoskeletal and
115

Tim Zayatz, Social Security Disability Insurance Program Workers Experience: Actuarial Study No. 122, SSA,
May 2011, p. 8. Prior to 1995, SSA reported the diagnosis of awards based on the distribution of allowances at the
initial level assuming that the diagnostic data for awards at the appeals level had the same groupings as those at the
initial level. Starting in 1995, SSA included diagnostic information from the reconsideration level of the appeals
process in its determination of the annual number of awards. In 2003, SSA developed a new way of incorporating
diagnostic information from all levels of the appeals process to report award data. Because claimants with
musculoskeletal impairments tend to have higher-than-average final allowance rates, the reporting changes resulted in
an increase in the annual number of newly awarded beneficiaries with musculoskeletal impairments. For more
information on outcome variation by diagnostic group, see Javier Meseguer, “Outcome Variation in the Social Security
Disability Insurance Program: The Role of Primary Diagnoses,” Social Security Bulletin, vol. 73, no. 2 (May 2013),
Chart 3, http://www.ssa.gov/policy/docs/ssb/v73n2/v73n2p39.html.
116
SSA, Annual Statistical Supplement 1987, Table 103, and SSA, SSDI Annual Report 2013, Table 21.

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mental awards was such that the share of awards based on other disabilities declined (Figure 11).
In other words, as mental and musculoskeletal awards increased in absolute terms, other
impairments remained generally steady. However, because the overall rate of mental and
musculoskeletal awards increased, the share of other impairments decreased.
Figure 12. SSDI Incidence Rates, by Diagnostic Group, 1981-2013
(per 1,000 disability exposed)

8

Total Incidence Rate
7

6

Musculoskeletal

5

4

Mental Disorders
3

Cancer

Circulatory

2

Respiratory
Nervous
1

Other
0
1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

Source: Calculated by CRS based on data from SSA, Annual Statistical Report on the Social Security Disability
Insurance Program, 2013, Tables 1and 40, and SSA, “Disability Insured Workers.”

The growth in the share of beneficiaries with mental and musculoskeletal impairments may have
also increased the disability rolls by increasing the average length of time that beneficiaries stay
on SSDI.117 Mortality rates for beneficiaries with mental or musculoskeletal impairments are
lower than average, while their conversion rates are higher than average.118 As a result, they
experience a longer-than-average duration of benefit receipt.119 Furthermore, because

117

Kalman Rupp and Charles G. Scott, “Trends in the Characteristics of DI and SSI Disability Awardees and Duration
of Program Participation,” Social Security Bulletin, vol. 59, no. 1 (January 1996), pp. 6-7, http://www.ssa.gov/policy/
docs/ssb/v59n1/index.html. See also Autor and Duggan, “The Growth in the Social Security Disability Rolls,” p. 79.
118
Rupp and Scott, “Trends in the Characteristics of DI and SSI Disability Awardees and Duration of Program
Participation,” Table 1, p. 6. See also John C. Hennessey and Janice M. Dykacz, “A Comparison of the Recovery
Termination Rates of Disabled-Worker Beneficiaries Entitled in 1972 and 1985,” Social Security Bulletin, vol. 56, no.
2 (Summer 1993), pp. 60-61, http://www.ssa.gov/policy/docs/ssb/v56n2/v56n2p58.pdf.
119
Rupp and Scott, “Trends in the Characteristics of DI and SSI Disability Awardees and Duration of Program
Participation,” Table 2, p. 7.

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beneficiaries with mental impairments enter the program at younger-than-average ages, their time
on SSDI could last decades.120

Other Potential Factors
Changes in the Health of the Working-Age Population
It is unclear whether overall changes in population health have affected the size of the SSDI
program. Although mortality rates at all ages have fallen markedly over the last half-century,
indicating generally improved health, the rise in conditions such as obesity and diabetes—which
may increase the risk for certain diseases and other health problems—might have increased the
share of the population with severe disabilities.121
Thus far, researchers have failed to reach a consensus on whether working-age adults are
healthier or unhealthier.122 Some research indicates that reported rates of disability have grown,
especially among the younger working-age population.123 On the other hand, some researchers
have found that the likelihood of near-elderly individuals (ages 50-64) to report a work-limiting
disability has declined, while the health of younger workers has stayed roughly the same.124
Part of the problem in determining trends in the prevalence of disability in the working-age
population stems from the fact that there is no single, universally accepted definition or measure
of disability.125 Although many of the large surveys used by researchers specifically ask questions
pertaining to disability, the wording and complexity of the questions often differs. Because many
surveys are self-reporting, the definition of what constitutes a work-limiting disability often rests
entirely on the subjectivity of the respondent. As a result, trends in the prevalence of disability
vary by survey and by the definition of disability.126
Given the inconclusive literature, it seems unlikely that changes in the prevalence of disability in
the working-age population can adequately explain the growth in the SSDI rolls.

120

Ibid. Of a cohort of beneficiaries awarded benefits in 1972, the estimated average length of disability spells for
beneficiaries ages 18 to 34 with mental disorders was 25.5 years.
121
For a discussion of the relationship between obesity, health, and non-employment, see Kristin F. Butcher and Kyung
H. Park, “Obesity, Disability, and the Labor Force,” Economic Perspectives, vol. 32, no.1 (February 2008), Federal
Reserve Bank of Chicago, https://www.chicagofed.org/publications/economic-perspectives/2008/1qtr2008-part1butcher-park.
122
See H. Stephen Kaye, “Disability Rates for Working-Age Adults and for the Elderly Have Stabilized, but Trends for
Each Mean Different Results for Costs,” Health Affairs, vol. 32, no. 1 (January 2013), pp. 127-134. See also Linda G.
Martin et al., “Trends in Disability and related Chronic Conditions Among People Ages Fifty to Sixty-Four,” Health
Affairs, vol. 29, no. 4 (April 2010), pp. 725-731.
123
See Darius N. Lakdawalla, Jayanta Bhattacharya, and Dana P. Goldman, “Are the Young Becoming More
Disabled?,” Health Affairs, vol. 23, no. 1 (January 2004), pp. 168-176. See also John Bound and Timothy Waidmann,
“Employment Rates among Working-Aged Men and Women with Disabilities,” Journal of Human Resources, vol. 37,
no. 2 (Spring 2002), pp. 231-250.
124
See Duggan and Imberman, “Why Are the Disability Rolls Skyrocketing?,” p. 354. The authors found that the
improved health of individuals ages 50-64 might have slowed the growth in the SSDI rolls between 1984 and 2002.
125
Disability Statistics, “Frequently Asked Questions: What is the definition of disability?,” Maintained by Cornell
University, http://www.disabilitystatistics.org/faq.cfm#Q3.
126
See Andrew J. Houtenville et al., “Disability Prevalence and Demographics,” in Counting Working-Age People with
Disabilities: What Current Data Tell Us and Options for Improvement, ed. Andrew J. Houtenville et al. (Kalamazoo,
MI: W. E. Upjohn Institute for Employment Research, 2009), pp. 69-99.

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Variation in the Disability Determination and Appeals Process
Some researchers have suggested that inconsistency in the disability determination and appeals
process contributed to the growth in the program, but the evidence on the issue is inconclusive.
Depending on the case, variation can both increase and decrease the overall allowance rate.
Disability examiners and ALJs with high allowance rates may be offset by examiners and judges
with low allowance rates.
As earlier noted, DDS examiners use a combination of medical and functional evidence to
determine whether an impairment precludes a claimant from engaging in SGA. Although DDS
examiners base their initial determinations on uniform guidelines established by the SSA,
regional differences in demographic, health, and employment characteristics may produce
variation in initial allowance rates among DDS offices.127 However, one study found an
appreciable degree of variation in determination outcomes across examiners within the same DDS
office.128 The study estimated that up to 60% of applicants “could have received a different initial
determination from at least one other examiner in the DDS office.”129 Even though the appeals
process mitigated some of this variation, the study concluded that up to 23% of claimants could
have ultimately received different outcomes had other examiners in the DDS office performed the
determination.130
Some have speculated that the uncertainty of an outcome at the initial determination level due to
variation across DDS examiners likely encouraged denied claimants to pursue the appeals
process, increasing their likelihood of SSDI receipt.131 The aforementioned study found that
claimants denied by stricter examiners were more likely to appeal their determinations.132
Although most of the awards granted by SSA are made at the initial determination level, the
hearing level has the highest allowance rate of any step in the determination and appeals process.
In FY2013, the allowance rate at the hearing level was 48%, compared with 33% at the initial
level, 11% at the reconsideration level, 1% at the Appeals Council level, and 2% at the federal
court level.133 The study found that 75% of denied claimants who contested their initial
determinations had their denials overturned eventually on appeal.134

127

For additional information, see Alexander Strand, Social Security Disability Programs: Assessing the Variation in
Allowance Rates, SSA, ORES Working Paper no. 98, August 2002, http://www.ssa.gov/policy/docs/workingpapers/
wp98.html. See also Norma B. Coe et al., What Explains Variation in SSDI Application Rates?, Center for Retirement
Research at Boston College, http://crr.bc.edu/working-papers/what-explains-state-variation-in-ssdi-application-rates/.
128
Nicole Maestas, Kathleen J. Mullen, and Alexander Strand, “Does Disability Insurance Receipt Discourage Work?
Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt,” American Economic Review, vol. 103, no. 5
(August 2013), pp. 1797-1829..
129
Testimony of Nicole Maestas, in U.S. Congress, House Ways and Means, Social Security, Third in a Hearing Series
on Securing the Future of the Social Security Disability Insurance Program, 112th Cong., 2nd sess., March 20, 2012,
112-SS14, p. 3, http://waysandmeans.house.gov/uploadedfiles/nicolemaestas_ss_3_20_12s.pdf (hereinafter cited as
“Maestas Testimony, 2012”).
130
Ibid. Although the study found that 23% of applicants could have received different outcomes, there is no guarantee
that the applicants would have received different decisions had their cases been assigned to different DDS examiners.
131
Ibid.
132
Maestas, Mullen, and Strand, “Does Disability Insurance Receipt Discourage Work?,” p. 1821.
133
SSA, Justification of Estimates for Appropriations Committees Fiscal Year 2015, March 2014, p. 144, Table 3.26,
http://www.ssa.gov/budget/. The allowance rate includes SSDI, SSI, and concurrent initial disability determinations
and appeals decisions.
134
Maestas, Mullen, and Strand, “Does Disability Insurance Receipt Discourage Work?,” p. 1806.

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Others contend that variation in the allowance rates at the hearing level of the appeals process
contributed to the number of workers on SSDI. A 2013 report by SSA’s Office of the Inspector
General (OIG) discovered wide variances in the allowance rates among some ALJs within the
same hearing office.135 Additionally, an earlier OIG report found a direct relationship between the
number of cases adjudicated by outlier ALJs (i.e., judges at the extreme ends of the distribution
scale) and allowance rates.136 ALJs with the highest allowance rates adjudicated more dispositions
relative to the office average, while ALJs with the lowest allowance rates adjudicated fewer
dispositions compared with the office average.137 A 2014 OIG report estimated that judges with
700 or more dispositions and allowance rates of 85% or higher improperly allowed benefits in
approximately 24,900 cases over a seven-year period, resulting in “questionable costs” of more
than $2 billion.138
Even in the absence of such variation, those claimants improperly granted awards by outlier
examiners and judges might have eventually been found disabled in the future. One study found
that over 60% of claimants denied at the hearing level of the appeals process were later awarded
benefits within 10 years.139 One possible explanation is that the health of some initially rejected
claimants with marginal disabilities may deteriorate to the point that they meet SSA’s definition
of disability several years later. Therefore, inconsistency in the disability determination and
appeals process may simply accelerate receipt of benefits for some workers.

Reform Proposals
This section examines options to manage the long-term growth in the SSDI program. These
options have been proposed by numerous sources, including researchers, advocacy organizations,
federal agencies, and the Social Security Advisory Board (SSAB).140 For an overview of options
to reduce benefit levels or to increase program revenues, see CBO’s 2012 report, Policy Options
for the Social Security Disability Insurance Program, available at https://www.cbo.gov/
publication/43421.
As noted previously, while many of the proposals discussed in this report have the potential to
slow or even reverse the prevalence of SSDI receipt and thus generate savings to the program
over the longer term, such proposals are unlikely to produce savings in time to forestall the
135

SSA, Office of the Inspector General (OIG), Identifying and Monitoring Risk Factors at Hearing Offices, Audit
Report A-12-12-11289, January 2013, p. 7, http://oig.ssa.gov/audits-and-investigations/audit-reports/A-12-12-11289.
136
SSA, OIG, Congressional Response Report: Oversight of Administrative Law Judge Workload Trends, A-12-1101138, February 14, 2012, p. 8, http://oig.ssa.gov/audits-and-investigations/audit-reports/A-12-11-01138.
137
Another study found a small but statistically significant correlation between the number of cases adjudicated by
ALJs and their allowance rates. However, the study’s authors noted that this relationship could account for only about
2% of the variance in allowance rates. For more information, see Harold J. Krent and Scott Morris, Achieving Greater
Consistency in Social Security Disability Adjudication: An Empirical Study and Suggested Reforms, Draft Report,
March 3, 2013, p. 24, http://www.acus.gov/sites/default/files/documents/
Achieving_Greater_Consistency_Draft_Report_3-3-2013.pdf. See also Robert Nakosteen and Michael Zimmer,
“Approval of Social Security Disability Appeals: Analysis of Judges’ Decisions,” Applied Economics, vol. 46, no. 23
(May 6, 2014), pp. 2783-2791.
138
SSA, OIG, Congressional Response Report: Administrative Law Judges with Both High Dispositions and High
Allowance Rates, A-12-14-24092, November 14, 2014, http://oig.ssa.gov/audits-and-investigations/audit-reports/A-1214-24092.
139
Eric French and Jae Song, “The Effect of Disability Insurance Receipt on Labor Supply,” American Economic
Journal: Economic Policy, vol. 6, no. 2 (May 2014), pp. 291-337.
140
SSAB is an independent board charged with advising the commissioner of Social Security on issues related to the
OASDI and SSI programs (42 U.S.C. §903). For more information, visit http://ssab.gov/.

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projected exhaustion of the DI trust fund. To avoid a 20% cut in benefits in 2016, lawmakers
would likely need to enact some kind of short-term financing, such as a reallocation of the Social
Security payroll tax rate or interfund borrowing.141

Tighten Eligibility Criteria
One policy option to reduce the growth in the SSDI rolls is to tighten the program’s eligibility
requirements. In general, the aim of tightening eligibility criteria is to mitigate the number of
marginally disabled individuals on the program while continuing to grant awards to the most
severely disabled individuals. Because marginally disabled individuals have some remaining
capacity to work, rejecting their applications would generally cause less harm to them than to
more severely disabled individuals.142 That said, there is no guarantee that all marginally disabled
individuals can work. Although it is difficult to discern which type of claimants would be affected
by more stringent eligibility requirements, a recent study found that marginal program entrants
are more likely to be younger, suffer from mental impairments, and have low earnings
histories.143 Henry Aaron, chair of the Social Security Advisory Board, summarized that “the
challenge for society is to choose a definition that best balances its willingness to award benefits
to some people who do not ‘deserve’ them and to deny benefits to some who do.”144
Enacting stricter eligibility criteria would also affect other federal spending and tax programs.145
On the one hand, tightening standards would not only directly reduce spending through a higher
rejection rate; it would also likely discourage some individuals from applying for SSDI in the first
place.146 Additionally, stricter standards would likely encourage some prospective applicants to
continue to work, which would increase tax receipts.147 On the other hand, some people who
could no longer qualify for SSDI would seek other federal support. For example, individuals with
sufficiently low income and assets could potentially qualify for SSI, increasing federal
spending.148

Eliminate Eligibility for SSDI Benefits at Age 62 or Later
As noted earlier, workers between the ages of 62 and FRA who apply for early Social Security
retirement benefits are subject to a reduction in their monthly benefits. In contrast, workers
between the ages of 62 and FRA who apply for SSDI benefits receive about the same benefit that
they would have received had they applied for retirement benefits at their FRA. Some Members
141

For more information, see CRS Report R43318, Social Security Disability Insurance (DI) Trust Fund: Background
and Solvency Issues, by (name redacted).
142
Maestas, Mullen and Strand, “Does Disability Insurance Receipt Discourage Work?,” p. 1818. The authors found
that the employment of marginal program entrants would have been, on average, 28 percentage points higher two years
after the initial determination had they not received SSDI. This figure dropped to 16 percentage points four years after
the initial determination.
143
Ibid., p. 1801.
144
Henry J. Aaron, “With Disability Benefits Running on Fumes, What to Do?,” Brookings Institution, October 28,
2014, http://www.brookings.edu/research/opinions/2014/10/28-disability-benefits-aaron.
145
CBO, Policy Options 2012, pp. 8-9.
146
Susan E. Chen, “Rejection from the Disability Insurance Program and Dependency on Social Support,” University
of Michigan Retirement Research Center, 2014, http://www.mrrc.isr.umich.edu/publications/papers/pdf/wp305.pdf.
147
Maestas, Mullen and Strand, “Does Disability Insurance Receipt Discourage Work?” See also David H. Autor et al.,
“Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings
of Disability Applicants,” January 2015, http://economics.mit.edu/files/10336.
148
Chen, “Rejection from the Disability Insurance Program and Dependency on Social Support,” p. 18.

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of Congress have expressed concern that the differential between disability and early retirement
may induce workers between the ages of 62 and FRA to apply for SSDI as a means of increasing
their total benefits.149 In 2013, 9% of the nearly 869,000 awards issued by SSA went to
individuals between the ages of 62 and FRA.150
To reduce the growth in the SSDI rolls, policymakers could eliminate eligibility for SSDI benefits
starting at age 62. Instead, workers between the ages of 62 and FRA would be eligible only for
early retirement benefits. Under current law, the penalty for taking early retirement at age 62 is a
25% to 30% monthly reduction in cash benefits, depending on year of birth. CBO recently
estimated that preventing workers from applying for SSDI benefits after their 62nd birthday or
receiving SSDI benefits if they became eligible after that date starting in 2016 would reduce
federal outlays by $10.6 billion between 2015 and 2024, or 0.6% of scheduled outlays for
SSDI.151
One reason to eliminate eligibility starting at age 62 is that it could “encourage individuals that
seek disability benefits as an early retirement program to remain in the work force.”152 However,
opponents point out that this option would adversely affect older workers with little or no
capacity to work in the national economy, especially those workers near or below the poverty
line.153

Increase the Recency-of-Work Requirement
To become insured under the Social Security program, workers must accrue work credits—
known as quarters of coverage—based on their earnings in covered employment.154 In 2015,
workers are credited with one quarter of coverage for each $1,220 in earnings, up to the
maximum of four quarters of coverage per year.155 To qualify for SSDI, workers must have earned
a minimum number of quarters of coverage based on their age and generally must have earned at
least 20 quarters of coverage during a 40-calendar quarter period ending with the quarter in which
their disabilities began.156 In other words, disability claimants must have worked for five of the
past 10 years to be eligible for SSDI. That “recency-of-work” requirement—sometimes known as
the 20/40 rule—restricts the program to individuals who have worked of late and for a reasonable
length of time in covered employment.

149

For an example, see Senator Tom Coburn, “Back in Black: A Deficit Reduction Plan,” July 2011, p. 554,
http://www.coburn.senate.gov/public/?p=deficit-reduction.
150
SSA, SSDI Annual Report 2013, Table 39. Starting in 2007, age is based on date of entitlement and not date of
award.
151
CBO, Options for Reducing the Deficit: 2015 to 2024, November 2014, p. 14, http://www.cbo.gov/budget-options/
2014 (hereinafter cited as “CBO, Options for Reducing the Deficit 2014”). Estimates are relative to CBO’s August
2014 baseline projections and do not include any effects on spending for other federal programs, such as Medicare,
Medicaid, and SSI.
152
Coburn, “Back in Black,” p. 554.
153
Kathy Ruffing, “Disability Insurance Provides Vital Benefits to Vulnerable Workers,” Center on Budget and Policy
Priorities, July 15, 2013, http://www.offthechartsblog.org/disability-insurance-provides-vital-benefits-to-vulnerableworkers/.
154
For more information, see SSA, How You Earn Credits, 2014, http://www.ssa.gov/pubs/EN-05-10072.pdf.
155
The amount of earnings needed for a quarter of coverage is adjusted annually based on the average wage index. For
more information, see SSA, “Quarter of Coverage,” http://www.ssa.gov/oact/cola/QC.html.
156
42 U.S.C. §423(c) and 20 C.F.R. §404.130.Younger workers may meet the recency-of-work requirement with fewer
quarters of coverage based on their age.

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CBO recently estimated the impact of increasing the recency-of-work requirement on beneficiary
enrollment. According to the agency, requiring non-blind disability claimants to have worked four
of the past six years (instead of five of the past 10) starting in 2016 would reduce federal outlays
by $32.4 billion between 2015 and 2024, or 1.8% of scheduled outlays for SSDI.157
The stricter recency-of-work requirement would likely affect individuals with intermittent work
histories, specifically workers with prolonged and sustained bouts of absence from covered
employment due to unemployment or withdrawal from the labor force.158 One study found that
while working-age men (ages 25-54) report leaving the labor force primarily because of
disability, working-age women typically report leaving the labor force to care for someone in
their household.159 Consequently, the more stringent recency-of-work requirement may
disproportionately affect women who drop out of the labor force to act as caregivers.160

Adjust the Age Categories for Vocational Factors
Another option is to raise the age categories for “vocational factors.” In addition to assessing an
applicant’s medical condition, DDS examiners take into account the individual’s ability to
perform any past relevant work or other work that exists in the national economy. Vocational
factors such as age, education, and work experience—in combination with the individual’s
residual functional capacity—help an examiner to determine whether an applicant’s impairment
precludes him or her from engaging in SGA. Since vocational factors such as education and work
experience typically become less stringent with age, SSA is more likely to award benefits to older
insured workers.
Currently, SSA categorizes older workers across four age ranges: 45-49, 50-54, 55-59, and 60 and
older.161 CBO examined the effects of increasing the 45-49 and 50-54 age ranges by two years to
47-51 and 52-56 and making 57 to FRA the new maximum range, thereby eliminating the 45, 46,
and 60 and older categories. According to CBO, if this option had been implemented in 2013, it
would have decreased the number of SSDI beneficiaries by 50,000 or 0.5% in 2022, as well as
reduced program expenditures by $1.0 billion in that year.162

157

CBO, Options for Reducing the Deficit 2014, p. 14. Estimates are relative to CBO’s August 2014 baseline
projections and do not include any effects on spending for other federal programs, such as Medicare, Medicaid, and
SSI.
158
Unemployment refers to all individuals aged 16 and older who (1) do not have a job, (2) have actively looked for
work in the prior four weeks, and (3) are currently available for work. Individuals out of the labor force are currently
not working and not actively looking for a job. For more information, see BLS, “How the Government Measures
Unemployment,” June 12, 2014, http://www.bls.gov/cps/cps_htgm.htm.
159
Julie L. Hotchkiss, M. Melinda Pitts, and Fernando Rios-Avila, A Closer Look at Nonparticipants During and After
the Great Recession, Federal Reserve Bank of Atlanta, Working Paper 2012-10, August 2012, p. 6,
http://www.frbatlanta.org/pubs/wp/12_10.cfm.
160
For an example, see Sarah E. Hoffman, “Falling Through the Cracks: How the 20/40 Rule Discriminates Against
Women Seeking Social Security Disability Insurance Benefits and What Congress Can Do About It,” Penn State Law
Review, vol. 113, no. 2 (2008).
161
20 C.F.R. §404.1563. See also SSA, POMS, “DI 25001.001 Medical-Vocational Quick Reference Guide,” January
17, 2014, http://policy.ssa.gov/poms.nsf/lnx/0425001001. In general, SSA categorizes claimants based on three age
ranges: under age 50, age 50-54, and age 55 or over. However, the agency uses the subcategory “age 45-49” in
assessing a claimant’s capacity to do sedentary work and the subcategory “age 60 or older” in determining a claimant’s
ability to perform medium level work.
162
CBO, Policy Options 2012, p. 18. Adjusting the age ranges of vocational factors would have also decreased outlays
to Medicare.

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SSA explored raising the age categories in the past but ultimately decided against it. In 2005, SSA
issued a Notice of Proposed Rulemaking (NPRM) to increase the age categories for older insured
workers by two years.163 However, after collecting feedback from the public, SSA withdrew the
NPRM in 2009.164

Improved Administration of the Program
One option is to improve the way in which SSA administers the program so that fewer nonmeritorious people receive benefits. Variation in the application of program rules can distort the
disability determination and adjudication process, resulting in SSA granting awards to nonmeritorious claimants or denying benefits to claimants with little or no capacity to work.
Similarly, diminished program integrity—whether through waste, fraud, or abuse—may permit
some beneficiaries to remain on SSDI even after their health improves. This subsection outlines
reforms to

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR43054. Public record. Not legal advice.