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OK, everybody…one last roundup of “Things to Know.”

From a Sept. 26 piece entitled “Government Benefits for Special-Needs Individuals,” a good look benefits’ programs and a great idea for helping special-needs individuals–set up a trust for them:

Planning is paramount

[Although it is crucial] to ensure that you have adequate planning in place to preserve your child’s eligibility for government assistance, it is important for individuals to know what government benefits are available to a special-needs child and when these benefits are available. Because government programs can be confusing and . . . they change often, anyone seeking to learn more about receiving government benefits for a special-needs child should consult an attorney or review current documentation on eligibility from each individual government program.

Four programs for special-needs families: two not means-based

There are four relevant government benefit programs available to special-needs families. These are Supplemental Security Income (“SSI”), Medicaid, Medicare and Social Security Disability Insurance (“SSDI”). [Neither] SSDI [nor] Medicare are… means-based programs. In other words, there is no investigation into your finances to determine if you qualify for the program based on your income or your resources. Medicare is a form of sponsored health insurance available for the elderly and the disabled and SSDI is available to individuals and minors or special needs children of an individual who has died, retired or become disabled.A special-needs child who is under age 22 and who is not working can obtain SSDI benefits based on his or her parents’ prior earnings.

SSI, Medicaid are means-based

SSI and Medicaid are both means-based programs. Eligibility for those programs is based on financial need and strict requirements must be met prior to receiving benefits. Medicaid can provide in-home care, cost of hospitalization and nursing-home care as well as some housing benefits to recipients. A special-needs child can receive SSI, SSDI, Medicaid and Medicare all at the same time.

Creating a supplemental-needs trust

The distinction between means- and nonmeans-based programs is important to understand. [Because] these benefits add greatly to a disabled person’s ability to receive care, and given the expensive cost of long-term medical and nursing care, anyone seeking to give a special-needs child assets may disqualify him or her from receiving means-based program benefits. However, setting up a supplemental-needs trust for your special-needs individual can help provide for their care without disqualifying him or her from SSI or Medicaid benefits.

Medicaid, SSI linked

Although the requirements should be reviewed periodically for changes, currently, to qualify for SSI benefits, a disabled adult cannot own more than $2,000 of assets. There is a link between eligibility for Medicaid and eligibility for SSI. Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services. Given the very low poverty threshold, setting up a supplemental-needs trust can help provide for extra care over and above that which the government may provide.

All in all, a thoughtful piece and well worth reading the entire article. Even though slanted toward New Jersey residents, the info is relevant to all special-needs families in the U.S.

The following is slanted toward Texas residents, but, again, good information for those in states with similar systems. From a Sept. 29 press release at Digital Journal:

DDS plays pivotal role in SSI/SSDI claims

Whether a Texan wants to make a claim for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), the application process begins and ends with the Social Security Administration (SSA). However, after a Texan applies for benefits, their claim is forwarded to an intermediate governmental body.

The Division for Disability Determination Services (DDS), part of the Texas Department of Assistive and Rehabilitative Services (DARS), makes disability determinations for all SSDI or SSI applicants in Texas. SSDI and SSI Benefits When Texans have physical or mental disabilities severe enough to hinder regular work activities, they can apply for federal SSA benefits to help restore a portion of lost income. The SSDI program covers disabled workers, and sometimes their family members, who have earned benefits by paying Social Security taxes during their employment.

DDS acts as SSA’s agent

The SSI program considers an applicant’s means and resources when determining coverage. Lower income adults and children typically qualify, but some people may be eligible for both programs. Application Process The application process, and how a person is determined as disabled, is the same in all U.S. states. Applicants fill out forms, either in person at a local Social Security office or online, providing information about their medical conditions, treatment and why working is difficult. They must also explain their work duties before the injury or disability and agree to release their medical records to the SSA and DDS. Once the Texas DDS receives the completed application, it can act as the SSA’s agent to determine whether the applicant is disabled.

Again, lots of good info here, and well worth the time to study it and make notes so you can ask good questions when consulting with your disability attorney.

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We’ve addressed this before, but with the debt-ceiling debate, US credit downgrade and endless political posturing, it’s probably a good time to once again discuss the financial health of Social Security overall and the SSDI and SSI programs in particular.

Experts warn of shortfalls in retirement and disability benefits

As we’ve written before, Social Security itself has been declared to be OK until about 2036; in other words, if nothing changes between now and then, the fund will be able to pay out only about 75 per cent of scheduled payments. Medicare is in slightly worse shape, but SSDI (Social Security Disability Insurance) will be busted sometime between 2015 to 2018.

SSDI could run dry as early as 2015

According to long Wall Street Journal piece on SSDI payments increasing in Puerto Rico (but also instructive for its good info on the SSDI national status), “The SSDI is set to soon become the first big federal benefit program to run out of cash—and one of the main reasons is U.S. states and territories have a large say in who qualifies for the federally funded program. Without changes, the Social Security retirement fund can survive intact through about 2040 and Medicare through 2029. The disability fund, however, will run dry in four to seven years without federal intervention, government auditors say.”

Applications have risen along with increased unemployment

According to an Aug. 22 account at Politico.com:

The Social Security disability fund is fast running out of money and may not be able to make payments starting in 2017, thanks in part to the bad economy driving claims up over the past decade, The Associated Press reported.

Applications for benefit claims have risen almost 50 percent in the past 10 years, as many people with disabilities are laid off and cannot find new jobs in the difficult job market. And, the AP added, the rush for benefits is causing a major backup for applicants currently waiting to get their cases decided.

The Congressional Budget Office estimates the disability trust fund will be exhausted by 2017 unless Congress acts. If the fund’s balance falls to zero, it cannot pay out full benefits unless the law is altered. And it’s not the only benefit fund that’s nearly insolvent: In 2040, the CBO projects, Social Security’s retirement fund will also be out of cash.

So, the exact years are in question, but the timeframes are roughly equivalent.

One concern: the ‘multiplier effect’

And it’s not only the SSDI direct benefits that add to the bill. From the NYT’s piece, which gives a dollar figure of benefits in Puerto Rico as averaging a “modest” $1,064 a month:

But the program opens up access for recipients to other government programs, multiplying the ultimate cost to taxpayers.

Anyone who spends two years on SSDI qualifies for the Medicare health program, which usually is available only for those 65 years old and older. SSDI recipients tend to remain tethered to the program for years, and the government’s lifetime financial commitment averages $300,000 per person, estimates David Autor, an SSDI expert who teaches at the Massachusetts Institute of Technology. “The system has profound problems,” Mr. Autor said.

SSDI’s financial woes pose a major test for the White House and Congress, which have been reluctant to tackle the budget-busting costs of entitlements.

Analysts who track the program say the only short-term way to save it without raising taxes would be to fold it into the fund that pays Social Security. That would likely force retirees to face benefit cuts two or three years sooner than they otherwise would have done, because SSDI costs would diminish retirement funds.

SS & SSDI fundings have been combined before

Various sources agree that Social Security (retirement) and SSDI (disability payments) were, in fact, temporarily combined in 1994, as a stopgap, emergency measure. What I’ve not understood, yet–although I do get it about the “multipliers–is how can payroll-funded benefits be such a problem?

In other words, if unemployment is the prime factor, i.e. joblessness strains the system via reduced payroll-tax contributions, then why doesn’t the system seem to care more about unemployment?

Weeding out beneficiaries who ‘sneak back to work’

SSI is not funded by payroll deductions but by the general revenue fund. In other words, a work history is not required to qualify. However, it is much more restrictive. According to the AP, a chronic problem–which we’ve reported about–is lack of review that would spot beneficiaries who have gotten work but kept taking benefits:

Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.

As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don’t deserve.

Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.

Delays can leave unpaid bills piled high

Another concern, according this piece at credit.com, is the delay and lag-time in receiving benefits. As mentioned, the influx of applicants from the unemployed adds to the delay. So what shape are beneficiaries in when they finally begin receiving payments?

For many recipients, Social Security Disability Income (SSDI) and/or Supplemental Security Income (SSI) are their financial lifeline. Their more immediate concern may not be what happens in Washington to save the program, but what happens today to the money they receive. I couldn’t find any statistics about how many SSDI and SSI recipients have past-due bills, but if our email is any indication, plenty of them are struggling and getting calls from creditors or debt collectors threatening to take the little income they do get each month. And because it takes so long to get approved for disability these days, applicants may find themselves already in the hole by the time they start receiving benefits.

Benefits not shielded from child support, taxes or student loans

However, there’s a bright spot in that few creditors can successfully come after these benefits. Again from credit.com: “For those who rely on these benefits, the good news is that they are generally protected from creditors and debt collectors. However there are exceptions in the case of past-due child support, past-due taxes, and federal student loans. “ ‘They can chase you (for student loans) to the grave,’ warns bankruptcy attorney Cathy Moran.”

Free evaluation available

Just remember, we can help connect you with a compatible, trained attorney who can help you with your case–if nothing else, it’s possible that an experienced attorney might be able to steer your case toward a more reasonable outcome.

Help is available whether you’re fighting denied or delayed benefits or whether creditors are threatening to attach benefits you’ve already received. Consider signing up for your free evaluation today.

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No study about SSA Disability in recent memory deserves more attention than the one recently released (and subsequently pooh-poohed by the SSA) from Syracuse University’s Trans­ac­tional Records Access Clear­ing­house (TRAC), a non-profit research orga­ni­za­tion.

Don’t let the system beat you down

If you (or a family member or friend) are one of the unlucky minions to feel trapped and ignored by the federal government’s program to aid disabled persons, please don’t let the findings of this admittedly bleak report stop you from pressing forward with your claim. If anything, this report should legitimize the idea that disability judges can be arbitrary in their rulings and therefore a trained, experienced disability attorney could be your best ally in this notoriously time-consuming process.

Huge disparity among judges’ approval rates

The following is from a Baltimore news site called Baltimore City Paper Blogs; it begins with a district centered in San Antonio, Texas–but the grim numbers apparently apply across the nation:

In San Anto­nio, Texas, peo­ple hop­ing to get Social Secu­rity dis­abil­ity pay­ments could see their cases assigned to any of 17 judges. The luck of this draw mat­ters a lot. One of the judges grants ben­e­fits in just 14 per­cent of cases. Another judge hands over benefits—which range from about $700 per month to about twice that—92 per­cent of the time.

That 78 per­cent dis­par­ity rate makes San Anto­nio the sec­ond most lottery-like sys­tem in the Social Secu­rity Administration’s arch­i­pel­ago of hear­ing offices, accord­ing to a data analy­sis by the Trans­ac­tional Records Access Clear­ing­house, a non-profit research orga­ni­za­tion housed at Syra­cuse Uni­ver­sity. (Dal­las is num­ber one, with 83 per­cent disparity).

“To a sur­pris­ing extent the records on dis­abil­ity deci­sions show again and again that even within the indi­vid­ual offices there is not a clear con­sen­sus among the judges about which claims should be awarded ver­sus which should be denied,” the authors of the report , David Burn­ham and Sue Long, write. “The prob­lem today is some­what worse than it was four and a half years ago.”

This study is from a group aligned with Syracuse University

In case you missed the in-line link, here it is again, the link to the report summary by TRAC, the research outfit aligned with Syracuse University, which reports studying nearly two million claims filed with the Social Security Administration. The report starts thusly:

A court-by-court analysis of close to two million Social Security Administration (SSA) claims has documented extensive and hard-to-explain disparities in the way the administrative law judges (ALJs) within the agency’s separate hearing offices decide whether individuals will be granted or denied disability benefits.

These findings — discussed in detail below — suggest that in many SSA hearing offices today, the chance a disability claim is granted or denied is often determined more by the particular judge assigned to handle it than by the facts and circumstances presented in the case. The findings further document that the problem is not simply the result of a few judges whose decisions are far out of line with those of other judges on the bench. Rather, the agency’s own case-by-case evidence demonstrates that the problem is systemic. To a surprising extent the records on disability decisions show again and again that even within the individual offices there is not a clear consensus among the judges about which claims should be awarded versus which should be denied.

Systemic.

That doesn’t sound good, as anyone with a systemic disease knows and understands. That means whatever the problem is, it’s not localized but instead spread throughout the entire system.

USA Today reports on ‘disparity’

Following is an excerpt from a recent USA Today report, illustrative of the perception of the status quo in such matters:

Congress and the agency’s inspector general have begun looking at the disparity. Yet both Social Security officials and advocates for the disabled say they are reluctant to interfere with the judges’ independence.

“Congress has been pretty enthusiastic about the idea of ALJ independence,” said Social Security Commissioner Michael Astrue, adding that only “a handful” of judges have approval ratings above or below average.

“They can’t tell an ALJ how to decide cases, but they can make sure they follow the agency’s policies.” said Ethel Zelenske, government affairs director for the National Organization of Social Security Claimants’ Representatives.

The Social Security Administration reports about 8.4 million disabled workers nationwide get an average monthly benefit of $1,069. Another 8.1 million low-income disabled people with little work history get about $500 a month in Supplemental Security Income. More than 2.9 million people applied for disability-worker benefits in fiscal year 2010, up 38% over the past five years, agency figures show.

To cope with the increase, Social Security has added about 200 judges in the past five years and streamlined the process of reviewing claims. The average wait time for a decision has steadily dropped, from a peak of 532 days in August 2008 to 354 days last month, agency data show.

TRAC responds to SSA’s response

To be fair, the SSA did respond to TRAC’s study-report, and TRAC’s response to that can be found here.

Just remember, we can help connect you with a compatible, trained attorney who can help you with your case–if nothing else, it’s possible that an experienced attorney might be able to steer your case toward a more reasonable outcome.

Howard Long is a testament to the possibilities of the SOAR program, so named because it’s an acronym for SSI/SSDI Outreach, Access and Recovery, a program administered with states and various agencies by the Social Security Administration to help reduce homelessness and provide SSI and SSDI benefits for qualified applicants. The homeless community is particularly difficult to enroll, assess and reliably contact, hence the outreach.

According to a Feb. 22 story at StarNewsOnline, “One year ago Howard Long, 50, was homeless, had no income, and was living outdoors. He had been to the emergency room at least twice and had been arrested for sleeping in public.

“Today Long rents an apartment, pays for groceries and utilities and has health insurance from Medicare.

“What changed Long’s life is an innovative program called SOAR, which last year helped get 31 chronically homeless people in New Hanover County into housing.”

Chronic homelessness

The story says it’s all part of a 10-year effort mounted in concert with United Way to reduce “chronic homelessness” in the Cape Fear region of North Carolina.

According to the local program director, Dan Ferrell, the benefits accrue way beyond the individuals who get help:

” ‘Communities like those in the Cape Fear region have become increasingly aware of the high costs of homelessness in terms of law enforcement, emergency room care and social services,’ Ferrell said. ‘SOAR is one of our major initiatives to reduce the costs of homelessness.’

“SOAR-acquired benefits bring taxes back to state and local communities.”

Local authorities say benefits outweigh the costs

The story says the 31 recipients will split nearly $270,000 this year and indirectly quotes Ferrell as indicating the benefits back to the community will “significantly exceed” the costs.

A specific benefit cited is that the beneficiaries’ lives improve enough to get out of the emergency-room cycle of using hospitals for health care. The thrust of the story is that addressing the essential cause of homelessness pays off better than the fragmented approach of an endless repetition of street sweeps, lockups, and a life of bouncing between temporary shelters and blowing in the wind.

Applying for benefits ‘very complicated, difficult and somewhat adversarial’

But without a concerted effort involving inter-agency cooperation–from federal to local communities–local authorities have few choices besides traditional responses. “Applying for the benefits is ‘very complicated, difficult and somewhat adversarial,’ [Michael] Hosick said. ‘Homeless people in particular can quickly get frustrated and give up.’ ”

Hosick is the local executive director for Triangle/Coastal Disability Advocates.

The case that Jack built–over 30 years

More insight–and another success story–comes from a program in Florida, the Bridgeway Center: “SOAR (SSI/SSDI Outreach, Access and Recovery) is a highly effective process that works within the system to assist disabled individuals in obtaining Social Security benefits.  SOAR has proven to be a successful addition to the array of strategies in the prevention and alleviation of homelessness.”

The example case that Bridgeway has on its site concerns the story of  Jack, “who had exhibited emotional and behavioral problems since childhood; anger, mood swings, inability to hold a job, and difficulties completing tasks of daily living.  Growing up, his mother would get so frustrated with him she threw him out of the home many times.”

The cycle would be repeated many times, for decades.

On one of these occasions he was introduced to alcohol and realized that it made the voices in his head go away.  Jack did not like being on the street so he would beg his mother to let him come back home.  When Jack was found wandering the streets extremely drunk at age 16 he was taken to a hospital and admitted under a Baker Act.  Jack stayed in the hospital until he was 18, then he was released to his mother, stabilized on medication.

This living arrangement lasted for around 6 months before again he was on the streets.  This pattern continued for six years, in and out of hospital, staying with his mother, becoming homeless and back to hospital, until his mother passed away.  Then Jack had no place to go; he truly was homeless.  He stopped taking his medication and began to use street drugs. At 25 he was arrested for possession of drugs, and then hospitalized again.

When he was released and admitted to a group home, his Bridgeway Center Case Manager, Donna Morgan took him to apply for Social Security Insurance. He was denied.  Ms. Morgan attempted to assist him in the appeal process but by that time Jack had left the group home. Ms. Morgan then had difficulty maintaining contact with Jack to complete the process. The Social Security Office would not provide her with information on Jack’s appointments schedule, doctor’s visits or paperwork requirements since she was not Jack’s representative. Jack was denied Social Security benefits three times in one year, without proper documentation, and with no one to stand up for him they would not consider his application.

For Jack? SOAR came through

Finally, Jack crossed paths with the system again, when Morgan ran across him, according to the Web site–and by that time, he was 30. However, this time “This time she used the SOAR strategies. Ms. Morgan became Jacks representative, completed the narrative and obtained reports from the many doctors Jack had seen over the years. After compiling all of the evidence as directed in the SOAR training, she submitted the documentation to the Social Security Office. Jack received full benefits within 3 months following application including benefits retroactive for the previous one and a half years.”

It takes a village, they say. In this case, the “village” is federal-state-city-local agency co-operation.

By Mike Hinshaw

Despite increased awareness and efforts of many organizations, including the federal government, the number of homeless people in the U.S. is increasing.  Some are returning military, some are newly jobless. Others have lost homes through foreclosure.

To be sure, some homeless folk tell social workers and other interviewers that they prefer their “unencumbered” lifestyle and are resistant to efforts to change their minds. How true that is, and how heavily influenced by extenuating circumstances such as substance abuse or mental health issues, we may never know. Regardless, it’s safe to say that most people want a safe, clean place to live–with access to decent food and medical care.

No home? No problem–Social Security benefits still obtain

What many people don’t realize is that being homeless does not preclude anyone from receiving any Social Security benefits for which they are otherwise eligible. However, a homeless person could inadvertently screw up and accept certain forms of aid that would hurt them when applying for benefits. Read closely.

The best news is that the Social Security Administration (SSA) has a program to help the homeless; following are their two main Web pages:

1. Social Security Online: Service to the Homeless
2. Social Security Online/Supplemental Security Income: SSI Spotlight on Homelessness.

One of the first things to know is that no one is required to have a dwelling place in order to receive correspondence or benefit checks from the SSA.

From the #2 Web page:

If you are homeless, some of the ways you can receive your SSI benefits. You may:
have your benefits deposited directly into your personal bank account;
have your benefits mailed to a third party; or
have a relative or other third party be assigned as your representative payee;
have your benefits directed to a Direct Express debit bank card.

However, some aid can deny SSA benefits

The next important thing–and this is crucial–is that living in some forms of public housing can lower the amount of benefits one may receive, or even disqualify one from receiving any benefits.

Again, from the same Web page:

Living in a shelter, medical treatment facility, or a correctional facility may affect your SSI benefits. Living in a public institution may make you ineligible for benefits.

However, some safe haven facilities provide very low cost supportive housing to homeless persons who are unwilling or unable to participate in mental health treatment programs or to receive other supportive services.  A person living in a safe haven will not have his or her SSI payments reduced for the support and maintenance provided by the safe haven.  Also, some publicly operated community residences are not considered public institutions for SSI purposes.

Dig deep, for help

Notice the wording: terms such as shelter, medical treatment facility and correctional facility mean something different from safe haven. Accordingly, the SSA recommends using resources they have on their Web pages as a starting place to help determine which types of shelters can be utilized without affecting one’s benefits.

Furthermore, the SSA “is an active participant in the United States Interagency Council on Homelessness (USICH).  The mission of the USICH is to ‘coordinate the Federal response to homelessness and to create a national partnership at every level of government and with the private sector to reduce and end homelessness in the nation while maximizing the effectiveness of the Federal Government in contributing to the end of homelessness.’ ” The USICH site has a link to what it labels (or shouts out, as it were) the “FIRST-EVER COMPREHENSIVE FEDERAL STRATEGIC PLAN TO PREVENT AND END HOMELESSNESS,” a pdf. of a report entitled “Opening Doors: Federal Strategic Plan to Prevent and End Homelessness.”

Helpful links

If you, or a person you are trying to help, is not familiar with a qualified local agency to answer questions, another place to start is the nearest HUD office. Through its Community Planning and Development division, HUD has several programs that can help, including  preventive programs.

Another way to go may be contacting the appropriate state agency or nonprofit organization. For example, in addition to the HUD presence in Texas, there’s also the Texas Homeless Network. Try a Google search on “state name” + “homeless help” or “homeless resources.” A news search might turn up something useful, too.

For example, here’s a good, recent story (Jan. 15) about a helpful center in California. Some places tend to specialize: this Jan. 17 piece in Huffington Post is about a center in Denver called The Gathering Place, which is geared toward women and children and provides crucially necessary daytime services–one particularly touching story involves a woman whose big break was a seemingly small accomplishment that led to greater things. By being able to get a nice haircut, she changed her self image, which led to a job, which led to her getting a home she regards as permanent.

Immediate help

Although the main thrust here is to help inform about Social Security benefits that may be available, we also recognize that some readers may need to find survival help right now, either for themselves, a friend or a loved one. Toward that end, here’s some links for possible shelters right now, today, tonight:

• Main link for this list, a .pdf file (which is not the only link at that site);
• Homeless Shelters by State from DoSomething.org;
• This list from a sorta’ goofy looking site that apparently means well, all about shelters and soup kitchens, apparently compiled by a guy who has lived the life and is trying to pay it forward. More power…

If I were homeless? I’d have a dog

Now, to show the diversity of available programs–and the lashback that can occur–I’ll close with this after-Christmas story, about a homeless guy who benefits from a program that helps tide him over when he needs help feeding…not himself…but his dog.

This strikes me right upside the head because last fall I was one eviction notice from joining the ranks of the homeless. Thank, God–the Justice of the Peace who heard the case knew the law well enough to deny the claim from my lender, who was pretending to be my “landlord.” That being said, let me tell you–as I was contemplating my possible future without a home, one thing I seized upon was this: IF I have to be homeless, I can guarantee you I shall have at least one dog with me. At all times…

So, no, I don’t think it’s “irresponsible” for the guy in that story to keep a dog. I think it’s a matter of survival. And it’s time more folks realize how many other good folks are trying  merely to survive.

Joint report: Keep disabled workers, help SSDI system

According to a Nov. 27 article in The Washington Post, a joint report from the Brookings Institution’s Hamilton Project and the Center for American Progress has concluded that “The government should create incentives for employers to retain disabled workers on their payrolls as a way of slowing unsustainable increases in the number of people receiving Social Security disability benefits.”

According to this blog, the report will be released in a few days and will call for upfront action: “The report by the Brookings Institute’s Hamilton Project and the Center for American Progress, to be released on Dec. 3, urges adding a ‘front end’ of benefits to keep the disabled in their jobs and slow down the rapidly growing expense of the federal disability program, also known as Social Security Disability Insurance (SSDI).

“Before workers could receive SSDI benefits, they would have to be approved for benefits from the private policy — benefits that would go toward rehabilitation services, partial income support and other related services.”

Troubling figures, revisited

We have reported on the increase in SSDI applicants, particularly the spike from 2008 to 2009, when demand jumped 21 per cent. The Post cites the new report as providing more troubling figures: “Between 1989 and 2009, the share of working-age adults receiving SSDI has doubled to 4.6 percent, and the cost of the program has more than tripled from $40 billion to $121 billion in the same time period, the report said.

“Strikingly, the enrollment increases have not coincided with an increase in disabilities; roughly 10 percent of adults have reported disabilities in both 1989 and 2009. Instead, the enrollment increases reflect ‘a rising rate of dependency and a declining rate of labor force participation among adults with disabilities,’ the report stated.”

As soon as we can get a copy of the report, we’ll discuss it and provide links.

Congressional Research Service report: SSDI versus Veterans Disability Compensation

A Nov. 23 post at a site for what its “About” page says is a global publishing and subscription provider for “research, compliance and management tools for attorneys, consultants, corporations and government agencies,” has a nice primer on June 2010 report from the Congressional Research Service that “sought to clarify why one group of individuals with disabilities may be eligible for benefits under the Veterans Disability Compensation program (VDC), but ineligible for benefits under the Social Security Disability Insurance program under the Title II of the Social Security Act (SSDI).”

Here’s a link to the report itself: “Disability Benefits Available Under the Social Security Disability Insurance (SSDI) and Veterans Disability Compensation (VDC) Programs.”

Two of ‘largest programs’ have important differences

According to the report summary, SSDI, administered by the Social Security Administration, and VDC, administered by the Department of Veterans Affairs, “are two of the largest federal disability programs, but strongly differ along several dimensions, including the populations served, how each program defines a ‘disability,’ as well as varying eligibility requirements.”

The report summarizes three crucial differences:

First, SSDI is an insurance program that replaces a portion of earnings for an eligible worker whose illness or injury—while not necessarily caused by a work-related incident—results in an inability to work. SSDI is one of several federal programs funded through the Federal Insurance Contributions Act (FICA) payroll tax and the Self-Employment Contributions Act (SECA) tax to which all workers and employers in covered occupations (including military personnel) and self-employed individuals make contributions. On the other hand, VDC is not insurance, but is a compensation program in that payments are made to veterans who develop medical conditions that are related to their service in the military. VDC is non-contributory and neither veterans nor active military personnel pay into the program, which is funded through a mandatory appropriation as part of the VA annual budget.

Second, while the purpose of both SSDI and VDC is to provide income security, SSDI provides a financial “safety-net” to eligible civilian and military workers due to their inability to work as a result of long-term or terminal injury or illness. Conversely, VDC provides veterans with tax-free, cash benefits specifically for service-connected illnesses or injuries. The ability to work is not factored into VDC disability determinations, although additional compensation is available for veterans who are unemployable as the result of a service-connected condition(s).

Third, SSDI only compensates workers that are fully disabled, whereas VDC compensates veterans for both partial and fully disabling injuries and illnesses. The VA is further guided by a principle that views disability compensation as an obligation, owed to veterans, for injuries impacting employment that were incurred or aggravated by their service to the country. SSDI benefits are granted solely on medical and economic grounds and other noneconomic factors are not considered. Eligibility requirements generally tend to be more stringent for SSDI than [for] VDC, and most veterans will not likely meet the criteria for both programs.

In 1945, Congress designated the first week of October as “National Employ the Physically Handicapped Week.”

The title changed through the years, until in 1988, according to an Oct. 25 post at StarTribune.com, “Congress extended the recognition to all of October and renamed it National Disability Employment Awareness Month. This year’s theme, “Talent Has No Boundaries: Workforce Diversity Includes Workers with Disabilities,” was played out in numerous local events, including workshops on résumé writing and interviewing, job-seeking skills and self-advocacy.”

Ticket to Work

Also embraced are SSDI recipients, which may surprise readers who think of those who receive Social Security Disability Insurance payments as totally or permanently disabled. Some are, of course. But others do recover enough to work again and for these folks SSA has a specific program called “The Ticket to Work.”

Describing advances regarding the disabled in general, Robin L. Shaffert, Senior Director of Corporate Social Responsibility of the American Association of People with Disabilities (AAPD), writes in an Oct. 29 HuffingtonPost: “As we look back on October’s celebrations of National Work and Family Month and National Disability Employment Awareness Month, advocates for increasing workforce flexibility and advocates for improving employment outcomes for people with disabilities should recognize the progress we have made. To a far greater extent than a year ago, it is generally agreed today that creating a flexible workplace benefits all employees, but it especially benefits employees with disabilities.”

High motivation, low absenteeism

The feature piece at StarTribune.com echoes that sentiment but ups the ante. It quotes Maxine Pegors, an HR consultant and disability-employment advocate: ” ‘One of the things that’s really true about people with disabilities is that when they have a job, they are so highly motivated and have very low absenteeism and turnover,’ said Pegors, citing studies that track attendance records comparing disabled employees to the general workforce.

” ‘They increase people’s morale and instill a sense of positivity among all the employees. They are so excited to have the job and they have this big smile, so everybody around them gets this smile, too.’ ”

I can personally attest to that–and even more. One of my earliest college journalism instructors careered not only about the UTA campus in a wheelchair but also through life, as though sloughing off his significantly limited use of one hand, barely acknowledging the less-than-full-range of the other. Despite physicalities, he became a hero to 20 or 30 years’ worth of students, administrators and professors alike–including plenty who went on to become professional journalists throughout the world.

Perhaps more important, he remains mentor and friend to untold thousands, both within and without the so-called disabled  community. My life without this man would not have been near as rich nor as fulfilling. The truth is, many times I struggled to keep up with John, and I don’t know whether he’s better off  for that–but I certainly am.

OK, enough personal reflection.

The point remains that employers are missing a bet–perhaps a huge bet–by overlooking the disabled as employees.

An untapped workforce

Pegors, who also co-chairs Bloomington’s Committee on Disability Employment and Awareness, said, “We try to make employers aware that they might be missing some very good candidates if they aren’t attracting people with disabilities,” Pegors said. “It’s an untapped part of the workforce that people need to know about.”

The Government Accountability Office (GAO) released a disturbing report in late June that contends the Social Security Administration (SSA) may have made fraudulent or improper disability payments to thousands of individuals, including more than a thousand federal employees.

As reported Aug.4 in The Washington Post, the SSA disputes the audit:

“Almost 1,500 federal workers might have received improper or fraudulent Social Security payments in the past several years, according to a government audit disputed by the Social Security Administration.

Payroll records vs. benefits data link nearly 70,000 others

“Government Accountability Office investigators matched civilian federal payroll records with benefit data from the Social Security Disability Insurance program and the Supplemental Security Income program to yield their estimates.”

Beyond the 1,500 federal employees, the GAO audit (see the summary here) finds questions about “62,000 individuals [who] received or had renewed commercial driver’s licenses after SSA determined that the individuals met the federal requirements for full disability benefits” and another “7,900 individuals with registered transportation businesses who were receiving SSA disability benefits.”

A tiny fraction?

WP columnist Joe Davidson, writing a day later, at first tries to downplay the significance of the numbers, saying that 1,500 of the millions of federal employees represents a tiny fraction. That’s not “many out of a current federal workforce of 2 million” Davidson writes. “And even that comparison overstates the problem.

“Sen. Carl Levin (D-Mich.), chairman of the investigations panel under the Homeland Security and Governmental Affairs Committee, put the numbers in a more precise context.

” ‘GAO matched a database of Social Security disability recipients against federal payroll databases covering about 4.5 million persons who worked for government agencies for varying periods of time from October 2006 to December 2008,’ he said as he opened the hearing.

“Fifteen hundred out of 4.5 million ‘represents a very small percentage,’ he accurately noted, ‘only three-hundredths of 1 percent.’ ”

“If only all rates of fraud or improper activities were so low.”

Larger questions for endangered SSDI program

We catch his drift, but can’t co-sign for such a forgiving attitude. In the first place, it overlooks the nearly 70,000 other folks who may have received improper payments. More important, such forbearance downplays the threat to a disability program that is running out of funding.

Davidson does recover a sense of accountability, though, when he says, “Yet any improper activity is too much, particularly by federal workers who are trusted to safeguard tax dollars, not abuse them. And every penny of the $1.7 million that the GAO found in improper monthly payments to federal workers is too much.”

Let’s see– $1.7 million x 26 months … on my calculator, that comes to $44.2 million in possible overpayments. And, remember, that’s only for the 1,500 federal folks, for the period Oct. ’06 to Dec. ’08.

It gets worse. According to the WP article, nearly $11 billion is stake for a longer period:

“The SSA made $10.7 billion in overpayments to disability beneficiaries from 2004 to 2008, according to Senate aides. [Senator Tom Coburn (R-Okla.)] is especially concerned and familiar with fraudulent payments from his time as a practicing medical doctor and as part of his service on President Obama’s bipartisan debt commission, aides said. The Oklahoma Republican also is a fierce critic of the salaries and benefits earned by federal workers and other spending for government operations.”

Coburn and Senators Thomas R. Carper (D-Del.) and John McCain (R-Ariz.) requested the GAO audit, which was featured at the Aug. 4 subcommittee hearing,  “Social Security Disability Fraud: Case Studies in Federal Employees and Commercial Drivers Licenses.”

Another $3 billion

Other incidents of overpayment have been found, too. For example, this is not the GAO’s first probe of the SSDI or SSI systems. According to the printed version of Coburn’s opening statement for the hearing, a previous GAO investigation found “nearly $3 billion in overpayments from 1999 to 2003 in the DI program alone.”

Regardless the fractional amount overall, this is simply too much money to be wasted, period–and especially for a program in such dire straits, as we wrote here: “The Social Security Disability Insurance (SSDI) fund, however, is in trouble. And fixing it requires way more than Band-Aid legislation in the next few years. In short, the fund is financed mostly by a 1.8 per cent payroll tax and at current rates will be in serious trouble in only five years. And by 2018, a short three years later, it will be broke, according to a recent study by the Congressional Budget Office (CBO), which makes a brief available here.”

Here’s an excerpt from Coburn’s statement:

“We cannot afford to allow healthy people to waste our money. Nor can the Disability Insurance Trust Fund afford it. The Congressional Budget Office recently concluded that the Trust Fund will be exhausted by 2018.

“GAO’s investigation into fraud in the Social Security disability programs is not its first. In 1997, they designated the SSI program as “high risk” due to years of mismanagement and overpayments. GAO also previously identified nearly $3 billion in overpayments from 1999 to 2003 in the DI program alone. In today’s report, GAO found $10.7 billion more in overpayments from fiscal years 2004 to 2008.

“In response to these numbers, SSA’s disappointing reply was that ‘overpayments are unavoidable.’ This is unacceptable. It is also in direct contradiction with the President’s mandate that overpayments in government programs be eliminated.”

SSA Commissioner objects

SSA Commissioner Michael J. Astrue vigorously disagreed with the GAO report, quoted in the WP piece, calling the report ” ‘fatally and hopelessly flawed,’ and said auditors improperly compared payroll data with SSA data.”

In his printed statement for the hearing, Astrue said:

“Of the 20 cases that GAO reviewed, GAO investigated only one problematic CDL case and only one problematic case involving a commercial vehicle company. GAO did not conclusively prove fraud in any of these 20 cases and has referred only 5 of these cases to our Office of the Inspector General (OIG).

“We do not intend to minimize the importance of the issues raised in this investigation, and we take our stewardship responsibilities very seriously. Nevertheless, the results apply to only these 20 non-representative cases, and after reviewing these 20 cases, we found that we had already detected overpayments for half and believe that we would have identified the remaining cases through subsequent enforcement activities if earnings were reported on the W-2 or as self-employment income to the IRS.”

Gregory Kutz, managing director of GAO’s Forensic Audits and Special Investigation division acknowledges the preliminary nature of the findings. From the main report itself:

“Thousands of federal employees, commercial drivers, and owners of commercial vehicle companies received Social Security disability benefits during fiscal year 2008, though we could not determine the extent to which beneficiaries improperly or fraudulently received payments. Because further investigation is required to determine whether these individuals are entitled to receive payments, our analysis provides only an indicator of potentially improper or fraudulent activity.”

Curiously, one of the disputed cases was for an employee who works for the SSA, and SSA officials had no idea until informed by the GAO. According to the WP story, “And in an ironic twist, a Social Security Administration worker from Arizona received $11,000 in overpayments after she was hired by the agency in 2007/ The SSA did not have information about her disability in her files, the GAO said.”

Stay tuned–these questions aren’t going away anytime soon.

Writing for “Your Money” in the July 30 edition of The New York Times, Tara Siegel Barnard says the mounting national debt will exert increasing pressure on lawmakers to reduce and that Social Security may well be one program they will tap for reductions.

“The program,” Barnard writes, “which has its own dedicated stream of income, is projected to pay out more this year than it is taking in, but that is a function of the weak economy. Social Security will, according to the last annual report from its trustees, be able to pay full benefits through 2037. Then, if there are no changes in the program in the meantime, the taxes collected will be enough to pay out only about 75 percent of benefits through 2083.

“So while Social Security’s finances are stable in the short term, most experts agree that the program needs to be bolstered for the long term. Among the proposals circulating is one from Representative John Boehner of Ohio, the House Republican leader, who recently suggested raising the retirement age to 70 for people at least 20 years from retirement.

“Other options include increasing Social Security payroll taxes, subjecting more income to the tax, reducing initial benefit payments or cutting cost-of-living increases (which would affect current retirees).”

In short, Barnard’s assessment comes closer to that of MoveOn.org and its Top 5 Social Security Myths than with the position (from Part 1) of the Poughkeepsie Journal, which says “Social Security could run out of money in about 17 years.”  Barnard quotes the trustees as saying the fund can pay full benefits until 2017; MoveOn says “the next quarter century.” Close enough.

Then, with different perspectives, Barnard and MoveOn basically agree that after that, Social Security can still meet about 75 per cent of its obligations–and that’s with no changes.

From that point, Barnard takes a different tack, postulating various scenarios in which a hypothetical couple is forced to save more and more (that is, cut spending) just to afloat for their retirement years. For the conclusion, Barnard quotes a financial planner consulted for the column:

“One financial planner, who has dual citizenship in the United States and Greece, said he was not taking chances. ‘Having seen what happened in Greece, I feel even more strongly today that I should not count on any Social Security for me and my younger clients,’ said the planner, George Papadopoulos, 43, of Novi, Mich. ‘I will continue to tell clients not to highly rely on Social Security and think of any money coming their way as gravy.’ ”

It’s a good column, peppered with thoughtful points and sobering consideration. But, taken together with MoveON.org’s Top 5 Myths, it doesn’t sound as though we need to panic about the retirement aspect of the Social Security fund.

The Social Security Disability Insurance (SSDI) fund, however, is in trouble. And fixing it requires way more than Band-Aid legislation in the next few years. In short, the fund is financed mostly by a 1.8 per cent payroll tax and at current rates will be in serious trouble in only five years. And by 2018, a short three years later, it will be broke, according to a recent study by the Congressional Budget Office (CBO), which makes a brief available here.

A July 27 report at DOTmedNews says the main reason for the projected shortfall will be increases in the number of recipients, but that the financial crisis also will be a contributing factor. “Between 1970 and 2009, the program increased from 2.7 million to 9.7 million people.

“The reasons for the growth in beneficiaries include aging of the population; changes in laws that reversed previous restrictive policies in obtaining benefits; the growth of women in the workplace; and changes in overall health of the population. The last reason is not clearly defined, but may relate to some conditions no longer having the same mortality rate, such as HIV/AIDS. Another factor for the growth seems to be lack of job opportunities due to the current economic crisis.”

Indeed, from the brief itself, the CBO writes: “Between 1970 and 2009, the number of people receiving
DI benefits more than tripled, from 2.7 million to 9.7 million.  That jump, which significantly outpaced the increase in the working-age population during that period, is attributable to several changes—in characteristics of that population, in federal policy, and in opportunities for employment.”

Of course, the elephant in the room here is the Baby Boomers and attendant rise of women in the workforce. And those numbers aren’t diminishing anytime, soon.

However, one item that seems to get overlooked is administrative costs. The CBO is quick to point out other remedies: reduce outlays (read “cut benefits”); increase the payroll tax allotment; find other sources of federal funds; even one suggestion about modifying the regs on acceptable work limits.

Yet, look at the rise in internal costs that accompanied the more-than-tripling of beneficiaries: “In addition, during those years, the average inflation-adjusted cost per person receiving DI benefits rose from about $6,900 to about $12,800 (in 2010 dollars). As a result, inflation-adjusted expenditures for the DI program, including administrative costs, increased nearly sevenfold between 1970 and 2009, climbing from $18 billion to $124 billion (in 2010 dollars).”

The brief includes a summary that opens the door for discussion about ways to fix the program, and we’ll revisit this topic from time to time in future installments. But the takeaway here is abundantly clear: We have time to ensure that Social Security retirement benefits are properly funded, thereby easing fears of the younger generation that they will be shortchanged.

But the time to address the coming shortfall in SDDI funding is upon us, today,

One thing is certain, though: in the national debate about the soundness of Social Security, confusion reigns.  It’s important to understand the arguments and get accurate information because although each program has separate funding, the general Social Security retirement benefits, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI) are all administered by the Social Security Administration. In fact, some of the confusion over retirement benefits may have come about due to a recent discouraging report about SSDI from the Congressional Budget Office (more in Part 2).

Dividing the debate into two camps, we have on one end of the spectrum the Sky-is-Falling group, who maintain Social Security is doomed without drastic intervention; the other side we might label as the Hogwash group, who maintain not only is the general Social Security fund in good shape but also that Sky Fallers are blowing things out of proportion in an attempt to scare people into accepting fewer benefits.

This is from poughkeepsiejournal.com (July 27), an example of the Falling Sky position:

“A recent congressional report paints a bleak picture, indeed. It says Social Security could run out of money in about 17 years, as the program now pays out more money in benefits than it collects in payroll taxes. It faces a staggering $5.3 trillion shortfall over the next 75 years, unless changes are made. No wonder a recent USA Today/Gallup Poll showed that public confidence in the system is waning.

“The solvency of Social Security affects everyone. The program, the main source of income for millions of retirees, is financed by a 6.2 percent payroll tax on wages below $106,800. The tax is paid by workers and matched by employers. Currently, 53 million Americans get Social Security benefits averaging $1,067 a month.”

The Hogwashers say that’s baloney, designed to get you riled up then despondent enough to accept less–eventually. For instance, here’s an edited version of the  Top Five Social Security Myths from MoveOn.org (read there for the full text, including footnotes and citations):

Myth: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.3 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.¹ After 2037, it’ll still be able to pay out 75% of scheduled benefits–and again, that’s without any changes. The program started preparing for the Baby Boomers retirement decades ago.² Anyone who insists Social Security is broke probably wants to break it themselves.

Myth: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago.³ What’s more, what gains there have been are distributed very unevenly–since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.⁴ But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth: The Social Security Trust Fund has been raided and is full of IOUs.

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.7 The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts.

Myth: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come.⁵ Right now, high earners only pay Social Security taxes on the first $106,000 of their income.⁶

Myth: Social Security adds to the deficit

Reality: It’s not just wrong — it’s impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.¹

Perhaps there is a mid-position, though. A July 30 “Your Money” column in The New York Times takes the stance that even though the long-terms threats will have to be dealt with, Social Security in the near-term is in good shape. The column takes a look at worst-case scenarios for a test-case couple and makes suggestions about increased savings. We’ll examine that and the very real problem facing SSDI in Part 2.