Does Cheating Explain a Decline in Applications for Disability Benefits?

The Washington Examiner recently published an article with the headline, “Hurrah, There are fewer disabled and fewer cheats.”  It offered an explanation for the sustained drop in applicants for Social Security disability and SSI benefits and a decline in the total number of people receiving disability benefits (www.nytimes.com/2018/06/19/business/economy/social-security-applications.html).  According to the author, this welcome news reflects a “moral problem,” that many applicants and beneficiaries are frauds.   The reasoning goes that the reduction in applicants and beneficiaries is largely due to a strengthening economy.  And since there should be no connection between the strength of the economy and how many people are disabled, it can be deduced that “the system is rife with abuse by people who can work but would rather defraud the system than get off the sofa.”  I submit that the conclusion is too simplistic.

Yes, there is a statistical correlation between increased disability claims in times of economic recession.  But blaming people for having bad morals and no work ethic is not a thoughtful or sufficient explanation.  The reasoning in the Examiner doesn’t even make sense.  It does not explain why people who are supposedly too lazy to work and defrauding the system decided to forego their “free” benefits and get off the sofa just because there are more job opportunities.

So what other factors explain the decline in disability applicants and beneficiaries?  

When jobs become scarce, workers who are just barely managing to sustain jobs because of their medical problems are most likely to lose their them.  Consider the 60-year-old factory worker who has labored in a physically demanding job for 40 years but now has back or knee problems and now needs help from co-workers to do his job.  Or the nurse’s aide who can’t lift patients any longer.  An employer might accommodate such workers when workers are scarce (in a growing economy).  When the economy shrinks and jobs are scarce, an employer has a larger pool of workers from which to choose.  When the employer is choosing teams, the marginal workers described above won’t be picked.  Many of these workers have very reasonable arguments that they are in fact “disabled.”  

The large “baby boom” generation is reaching retirement age.  People of retirement age receive an age-related rather than disability-related benefit.  As disabled “boomers” reach retirement age, their disability benefits automatically convert to retirement benefits, resulting in a decline in disability beneficiaries but a corresponding increase in retirement beneficiaries.  

Another factor contributing to the current decline in applications and beneficiaries may be the fact the Social Security is closing local offices and has a reduced workforce.  It has become more difficult to obtain application assistance in many locations.  The most disabled individuals need help with the application process and don’t always know where to find it.  Fewer successfully completed applications by disabled people also result in fewer beneficiaries. 

Lastly, Social Security has issued many new rules in recent years.  Many of them make it more difficult to prove disability.  Perhaps the most important is the elimination of long-standing rules that favored opinions from claimants’ treating physicians.  Treating physician’s opinions are no longer entitled to special consideration as compared to opinions from program physicians, who have only reviewed the medical record.  You can guess the impact of this rule change, and it has nothing to do with people being morally bad or the righting of a corrupt system.

The reasons for changes in the numbers of people applying for and receiving disability benefits are multiple.  The unsubstantiated (and mean-spirited) claim by the Examiner’s author, that people are “cheats,” is too simplistic to explain these changes.

August 21, 2018 Thought Leadership Articles
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