After the collapse of the financial markets caused by the reckless use of mortgage-backed securities and the concomitant collapse of the real estate markets, workers every where were severely affected. From the loss of value in their homes to the loss of their jobs, the great recession left many workers in desperate financial positions.
Many, after a job loss, were forced to use unemployment insurance as they looked for new jobs. Against this backdrop, the Social Security Administration saw increases in applications for Social Security Disability Insurance (SSDI) benefits. This increase has been ongoing over the last few decades, but some critics of the SSDI program used these two occurrences as an excuse to attack SSDI.
They claimed the program is full of fraud, and that millions of unemployed workers were flooding the program with applications for SSDI benefits after their unemployment insurance had run out.
A study by a team of university researchers from Columbia and Berkeley has found that there is no significant statistical connection between worker’s expiration of the unemployment benefits and the increase in SSDI applications.
The lead author of the study said, “[T]here is no convincing evidence that workers whose unemployment benefits have expired apply for disability insurance on a large scale.”
We have always thought it highly unlikely that workers who had exhausted their unemployment insurance could successfully apply for SSDI benefits, since a great majority of them would not have the necessary medical impairment that would allow them to qualify for SSDI.
The study found that less than 2 percent of workers who had exhausted their unemployment insurance even applied for SSDI.
Source: Sacramento Bee, “Study Reveals New Insight About Social Security Disability Benefits Amid Agency’s Influx Of Problems,” PRNewswire, February 10, 2014