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Why has SSDI grown so much?

On Behalf of | Oct 12, 2012 | Social Security Disability

Social Security Disability Insurance (SSDI) is an important program for many residents in Ohio, but unfortunately, the program is approaching a crisis over funding and cost control. The Congressional Budget Office (CBO) calculates the system could run out of money by 2016. Critics have pointed to the recent growth in the number of recipients of SSDI benefits.

The recent recession and its lingering economic effects appear to have coincided with an increase in applications to the program. Some suggest that people who ran out of unemployment benefits have turned to SSDI for income.

The reality is most of the growth has been caused by demographic shifts in the workforce and by structural changes to the program over the years.

A portion of the growth has been caused the aging of the baby boom generation. The CBO study reports that between 1996 and 2009 benefit awards to older workers rose from 67 to 76 percent, mirroring the aging of the baby boomers.

Older workers tend to be more likely to be in need of benefits, as they have worked longer and developed more compensable ailments. They also are more likely to have difficulty recovering from injuries as they age.

While the cost of the system has risen, no one should be fooled into believing that an award of benefits from SSDI is akin to winning the lottery. The CBO noted that in 2006, half of disability insurance recipients had income below the federal poverty line, a rate five times greater than the general population.

Source: “Policy Options for the Social Security Disability Insurance Program,” Congressional Budget Office, July 20, 2012.