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Applications for SSDI decline in 2012

We have discussed the growth of the Social Security Disability Insurance (SSDI) program and the pressures that places on the supporting resources. Last week, the Wall Street Journal reported that 2,820,812 people applied for SSDI last year. The good news is that is a good number, as it is the lowest number of applicants since 2009.

The Wall Street Journal interpreted this as a good sign for the job market, as some of the growth in the SSDI program has been seen as driven by the faltering job market during the recession. In addition to suggesting the job market is improving, it helps improve SSDI's economic situation by potentially reducing the eventual benefit payout by the program.

While the exact connection between a recession and growth in the number of applicants to SSDI is not clear, there is a correlation between recessions and increases in SSDI applications. Of course, an application is not the same as an award of benefits. Out of the 2.8 million applications, the Social Security Administration (SSA) only approved 980,000 individuals.

The WSJ sees the numbers as suggesting that the job market is improving, with the decline in applications hinting that people may be having more luck in finding work.

Nonetheless, the significant gap between applications and approvals for SSDI benefits points to the need for having your "homework" done before you apply for SSDI. You need a through and detailed set of medical records that pertain to your disability. Your work history and education is also necessary for your application, as SSA must review both how you are disabled and if you would be able to perform any other type of work.

Source: Wall Street Journal, "Number of the Week: Why Disability Figures Are Good for Job Market," Phil Izzo, January 26, 2013

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