NPR reports that more than three million extra people are now collecting Social Security payments because of disability, than were in 2007. A new report from the Obama administration and others suggests that as people lose unemployment benefits, they’re going after disability benefits. Unemployment claims have been trickling down over the past few months, which most agree is good.

But in tandem with that decrease, another public benefit has been increasing. Since 2007, some 3.4 million Americans have been added to the list of those receiving Social Security Disability Insurance. SSDI, as it’s know, pays out some $1,000 a month and also gives people access to Medicare and Medicaid.

About 10.6 million Americans now receive SSDI benefits, which has raised new fears that the Social Security Trust Fund may go broke as early as 2017. According to two new studies, many of those new claimants ran out of unemployment benefits before they applied for SSDI. Listen to report here:

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The Wall Street Journal this week is running a series on the long delays at Social Security. The backlog of applications for disability benefits is so big the Social Security Administration has a special code—DXDI—for appeals dismissed because the applicant died waiting. Since 2005, the agency has made 15,043 DXDI designations.

One person who died waiting was Dexter E. Penny of District Heights, Md., who applied for disability benefits in February 2009 after being diagnosed with colon cancer. His initial application was denied. Then his first appeal was denied on the grounds that he didn’t provide enough medical records.

Mr. Penny, a mason, approached the Maryland Legal Aid Bureau for help a year after his first application. He couldn’t understand why terminal cancer wouldn’t qualify him for benefits, says his sister, Diane Penny.

Kate Lang, his lawyer, called four hospitals seeking additional records. Mr. Penny’s condition worsened. By September 2010, he was told he had stage-four cancer. Mr. Penny, 50 years old, was nearly broke and dying in the hospital and the agency wanted more accurate documentation to determine whether he was able to work, according to his sister…

Applications for disability benefits are rising sharply because of high unemployment, an aging population and a combination of mismanagement and potential fraud within the system. About 3.3 million people sought benefits in 2011, and at the end of September a record 771,318 were waiting to have their cases heard on appeal by administrative law judges, according to the latest government data.

Both U.S. lawmakers and disability groups have complained about the long waits. The Social Security Administration has set up a program to let some applicants jump to the front of the line. It also has expanded the number of diseases and disorders that merit an immediate review, which include acute leukemia and pancreatic cancer, to 113, from 100.

These moves have reduced the number of applicants dying in line each year, by 20% from its 2009 peak. The backlog, however, has continued to rise.
Full story at this link.

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After practicing in this area for decades we can say it could be transformed and cured if there were a way to get partial disability. Many could work part time. Many more could not and survive, literally, on these benefits which are our safety net. Do families want to support these sick people? Impossible in most cases. Now, one can only work part time after being found totally disabled. Does that make sense?

Today’s Wall Street Journal prints a second article critical of a huge national law firm that has drawan fire for its practices. These huge mega firms have slowly grown and now impact not only the system but many earnest small practitioners all over the US. When a lawyer in aplace like tiny Bend Oregon is put out of business by a cowboy from Manhattan it is a sad day. The local and very personal connection of these small firm practitioners has been frayed by the reach of media. That is just known as progress, but it diminishes the personal connection with clients that is the joy of practicing law, to know we truly made a difference in a person’s life. The first thing we say to our clients is that they shouldn’t need a lawyer. But we win most of our cases because we put them together well and screened out malingerers before I started. And we know the staff in the offices we deal with all the time.

Beyond that, Binder deeply annoys judges and doctors, to a point that it may impact the way their clients are treated. Here is the story:

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Amid all the rhetoric about the Social Security program’s finances, here is a nice simple explanation and graphs from the New York Times showing where we are and how we got there:

“Social Security is a pay-as-you-go program financed by payroll taxes on workers and employers. When its revenues fall short of the benefits it owes in a given year, it covers payments by drawing on a $2.6 trillion fund that is accounted for separately from the federal budget and invested in government bonds. It is estimated that unless changes are made to the system, the fund will be able to pay full benefits until the surplus is exhausted in 2036, and about three quarters of benefits after that….”
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Everyone “knew” that disability applications were going up because of high unemployment rates, but here is a study that confirms the obvious: people need help.

…”Their research found that close to 10% of Americans between the ages of 50 and 65 who didn’t have access to at least $5,000 applied for Social Security disability benefits by the time their unemployment benefits were set to expire. The percent of this group seeking the benefits rose precipitously in the weeks leading up to the exhaustion of benefits, as it was below 1% with 50 weeks left in unemployment benefits.

“Jobless Americans in this age range who had access to at least $5,000 were much less likely to seek SSDI benefits at any point while collecting unemployment benefits.

“There has long been a relationship between unemployment rates and applications for disability benefits, with more Americans seeking entry into the program when it’s harder to find a job.” See full story here:

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Today’s Wall Street Journals says that “The Social Security Administration has commissioned an independent review of the federal disability system amid concerns it awards benefits to those who don’t deserve them and denies benefits to those who do.

“A focus of the study is expected to be the work of roughly 1,500 administrative-law judges, who hear appeals by applicants but whose award rates vary widely.

“Meanwhile, the Social Security Administration next week plans to stop notifying people applying for benefits of which judge they’ve been assigned for their case. This is being done, someone briefed on the plan said, to prevent applicants and their lawyers from trying to shop their appeals to the most lenient judges. ”

Advocates complain that this will prevent them from preparing in the way a particular judge wants to see a case presented. Each judge handles hearings differently, some want briefs, some don’t. Some do all the questioning, some want lawyers to do it. Lawyers say that after waiting several years for a hearing, forum shopping is off the table.

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This article has some fascinating statistics on disability payments, arranged geographically. Some coal mining areas of Kentucky and West Virginia have 25% or more of its working-age population disabled. At the other end of the spectrum, Utah has 2.8% of its population counted as disabled.

The Social Security disability program started in 1957 as a way to help people who can’t work because of health problems. There has been a surge of applicants to the program over the last decade. There were 6.6 million beneficiaries in 2000. By 2009, there were 9.6 million.

The average monthly benefit in 2009 was $1,064.

Currently, the disability fund is kept separate from retirement benefits and has a much smaller cushion of reserves.

Disability payments are concentrated in counties where the jobs require manual labor and where unemployment is traditionally high. Mining and timbering are major industries in many of the counties with the highest percentages of disability beneficiaries. These are also counties with historically high rates of unemployment.

Here is a list of the 50 counties in the country with the highest percentages of working age adults receiving Social Security disability benefits in 2009. Only three of the 50 are urban counties. Five contain small cities. The other 42 of the top 50 are rural. Read on:

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