Disability News Blog

Disability insurance covers more folks than you’d think – and the causes are surprising.This article covers reasons to purchase disability insurance that are equally applicable when considering the importance of Social Security disability coverage.

Fact 1: Leading cause of disability often mistaken.

The overwhelming majority of respondents (97 percent) failed to correctly identify arthritis as the leading cause of disability. The largest group of respondents, 30 percent, misidentified “accidents” as the leading cause. In reality, work-related accidents account for less than 5 percent of disabilities. The remaining 95 percent are caused by chronic illnesses, according to the Council for Disability Awareness.

Fact 2: Women’s higher incidence of disability unacknowledged

The Centers for Disease Control and Prevention have found higher rates of disability reported by females across all age groups when compared to males. Arthritis disproportionally impacts women, leaving them particularly vulnerable to financial hardship stemming from a loss or reduction of income. More women (18 percent) also express greater concern about the impact a disability could have on their financial situation versus men (12 percent), according to The American College survey.

Fact 3: Financial consequences of disability can be severe

Most people are unaware of the earning power that is lost over a lifetime if a disability occurs. For example, someone with an annual income of $50,000, who works for 40 years, is projected to make more than $2 million in future earnings. A loss of these earnings can be detrimental for an individual or family’s livelihood and future.

These financial consequences may be even more alarming for women. Women (22 percent) are almost twice as likely as men (12 percent) to think their cash reserves would last less than one month if faced with a disability. Unmarried women have an even bleaker outlook.

Fact 4: Most lack financial plans to deal with disability

Dealing with a disability could halt savings for retirement, a child’s college education, funds for medical care and even basic living expenses. In fact, most survey respondents plan to rely on savings to replace their income (71 percent), although most admit their cash reserves would run out in less than six months.

Fact 5: Most people are uninformed about disability insurance coverage

Sixty-one percent of women and almost half of men (46 percent) have never researched disability insurance and less than 10 percent of people have purchased individual disability insurance plans. Almost half of employed individuals obtain disability policies through their employers, but most don’t feel knowledgeable about their policies.

Only four in ten Americans are aware that disability insurance payments last for a specified period of time – not for as long as a person is disabled or unable to work – and just 27 percent of people know that employer-provided benefits are typically taxed.
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From The Philadelphia Inquirer:

“Listen up, boys and girls, moms and … dads grandmas and grandpas: It’s time for yet another installment of ”Why Social Security is Not Going Bankrupt.”

“This restatement of basic facts is necessary because so much of the media once again have misinterpreted last week’s annual report by the Social Security Trust Fund, complete with scary headlines about how the system is going broke and won’t be there when today’s young people retire.

“It’s happened again even though, as one reporter from Reuters recounted, Social Security Commissioner Michael Astrue seemed “ready to get down on his hands and knees” to “publicly beg” reporters to not repeat their usual mistakes. See full story here

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Michael J. Astrue, Commissioner of Social Security, today announced 52 new Compassionate Allowances conditions, primarily involving neurological disorders, cancers and rare diseases. The Compassionate Allowances program fast-tracks disability decisions to ensure that Americans with the most serious disabilities receive their benefit decisions within days instead of months or years. Commissioner Astrue made the announcement during his remarks at the World Orphan Drug Congress near Washington, D.C.

“Social Security will continue to work with the medical community and patient organizations to add more conditions,” Commissioner Astrue said. “With our Compassionate Allowances program, we quickly approved disability benefits for nearly 61,000 people with severe disabilities in the past fiscal year, and nearly 173,000 applications since the program began.”

The Compassionate Allowances initiative identifies claims where the nature of the applicant’s disease or condition clearly meets the statutory standard for disability. With the help of sophisticated new information technology, the agency can quickly identify potential Compassionate Allowances and then quickly make decisions.

Social Security launched the Compassionate Allowances program in 2008 with a list of 50 diseases and conditions. The announcement of 52 new conditions, effective in August, will increase the total number of Compassionate Allowances conditions to 165. The conditions include certain cancers, adult brain disorders, a number of rare genetic disorders of children, early-onset Alzheimer’s disease, immune system conditions, and other disorders. In his speech that opened the Congress, Commissioner Astrue thanked the National Institutes of Health for research they conducted which helped identify many of the conditions added to the list.

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During the first quarter of 2012, 724,746 people with disabilities applied for Social Security Disability Insurance, up from 660,712 the previous quarter and 720,119 a year earlier.

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Social Security (SSA) evaluates dementia as a mental illness. Anyone who suffers with dementia or early-onset Alzheimer’s who has not reached full retirement age may qualify for Social Security disability and SSI benefits. If dementia has progressed sufficiently, a person may be able to apply under the SSA’s Compassionate Allowances program.

The SSA recognizes its obligation to those with serious disabilities to provide help as quickly as possible. The government can drag out typical Social Security benefits claims over two years. But the Compassionate Allowances list can expedite benefits to those who obviously meet the disability standards, sometimes allowing approvals in months rather than years. Read more here:

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The Social Security Administration recently reported a loss of 4,000 employees in fiscal year 2011, and expects a loss of 3,000 employees this fiscal year and 2,000 employees in FY 2013. This adds up to 9,000 lost employees at SSA and state Disability Determination Services (DDS) offices nationwide. In FY 2012, the federal agency is operating with $400 million less than it did two years ago.

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The Social Security Administration will seek public comment this year on musculoskeletal disorders, as part of its ongoing housekeeping of its Listing of Impairments. This is the regulation that determines whether someone qualifies for Social Security disability benefits.

Musculoskeletal conditions are those affecting bones, muscles and ligaments, joints, nerves and tendons in the body. The conditions may be inflammatory or degenerative. Arthritis and degenerative disc disease fall into this category. When they reach a level of severity that makes it impossible to work any longer, Social Security Disability Insurance benefits may be granted.

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There was a controversy last year when, for budgetary reasons, Social Security suspended mailing statement sof accumulated retirement credits each year.

The agency says it’s working to restore the mailings, which were specifically mandated by Congress in 1989. The money has been requested in the president’s 2012-13 budget, but Social Security Commissioner Michael J. Astrue says he thinks it’s “unlikely” that the agency will get all it asked for. Meanwhile, the agency promises to replace the paper statements with an online version, but that may yet be several months off in any case.

Full storty here

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This Fox Business article covers the maze of regulations that affect spouses of retired or disabled workers, even divorced spouses who meet certain conditions.

“As a concept, Social Security is fairly simple. In practice, the rules and regulations that govern it can turn an otherwise sharp mind to mush. This is especially true when you add in factors such as two incomes, divorce and widowhood.”

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People who are receiving Social Security retirement or disability benefits, unemployment insurance, or workers’ compensation are correct in not viewing these payments as a handout from the government. Rather they are receiving the proceeds of income insurance for which they, or their employer, paid premiums over their lifetime.

The case of Social Security retirement benefits is the clearest. Workers and their employers each contribute 5.3% of wages annually for Old-Age and Survivors Insurance. This insurance pays benefits to the worker’s family if he should die prematurely and retirement benefits if he survives to age 62. On average, for people retiring today, the payroll tax contributions roughly equal the benefits they can expect to receive. (High earners get a slightly worse deal and low earners a better deal.) Similarly, workers and their employers each contribute 0.9% of earnings for Social Security Disability Insurance, which pays benefits when workers become permanently and totally disabled.

The story is essentially the same for unemployment and workers’ compensation. Even though premiums are usually paid entirely by the employer, economists believe the employer’s contributions are part of the worker’s compensation. Essentially, employers decide how much they are willing to pay in total compensation and then divvy up that commitment between wages and fringe benefits. Contributions for unemployment insurance and workers’ compensation are a component of fringe benefits. See article From Smart Money here:

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