In another sign of tough economic times, older Americans are fleeing the job market and applying for Social Security retirement benefits sooner than they had intended, and record numbers of people with physical problems are applying for federal disability insurance to try to make ends meet.
With the unemployment rate still hovering near 10 percent nationally, Social Security Administration officials say they have seen an extraordinary jump in applications for federal benefits. Over the past two years, officials have seen an 11 percent increase in applications for Social Security retirement benefits and a 27 percent increase in disability insurance applications – a surge officials say they have never seen before, even in previous deep recessions. Of course, not everyone qualifies for disability.
Last year, applications totaled 2.6 million for retirement benefits and over 3 million for disability benefits — both representing modest increases over the previous year. The Social Security Trust Fund provides both retirement benefits and payments to disabled Americans. Each month, about 7.8 million disabled people receive a total of $8.3 million in disability benefits, with the average individual collecting $1,064. Just over $39.4 million is distributed each month to 33 million retirees, an average of $1,167. Some recipients collect both, with one benefit typically reduced.
Layoffs and Disability Payments
“What we are seeing are people in the margins who have conditions that may be disabling now but were working,” said, Mark Lassiter, spokesperson for the Social Security Administration. “Something comes along and they look to Social Security for disability benefits. There are a number of people who apply because they are seeking public assistance programs if they lost their job.”
“The economy has this effect,” said Lowell Kepke, deputy communication director of the San Francisco Social Security Department. “People who have lost their jobs and have a disabling condition may consider their condition the reason they cannot work.”
One of those who turned to Social Security as a safe financial harbor is Elke, a 65-year-old nurse from New Hampshire who requested anonymity. In May 2008, Elke took a temporary one-month leave from work because of arthritis pain in her hands. When her condition didn’t improve, she decided to apply for long-term Social Security disability benefits, which she was granted.
“I liked my job,” said Elke, who lives in Greenfield, N.H. “I wasn’t prepared to go on Social Security.”
Thomas Foley, deputy director of the World Institute on Disability in California, described the crisis facing many disabled people as “a perfect storm of the baby boom bubble, the economic downturn and the housing market collapse. Foley said he can’t recall another time when those three economic forces came together to force many disabled people to seek federal assistance.
“Generally, whenever there is an economic downturn there is an uptake for disability benefits,” said Andy Imparto, president of the American Association of People with Disabilities. “If they lose a job, disability is a way to replace income."
Last year was the first year baby boomers became eligible for the retirement rolls. While there is a record influx of applications, that doesn’t mean most of these people will receive a government check. “Social Security has very stringent standards,” said Ethel Zelenske, spokesperson for the National Organization of Social Security Claimants' Representatives. The agency says no more than 37 percent of applicants are initially accepted — with the rest having to file appeals that could take years to be resolved. After a handful of applicants appeal their claim, upwards of 54 percent could be approved, according to Lassiter.
To be considered for disability benefits, an individual must have a condition lasting a minimum of 12 months or a terminal disability expected to result in death.
Michael Glancy is a veteran lawyer who has represented Social Security disability claimants for 34 years. Over the past year, his small firm out of Wilmington, N.C. has seen a change. “We are seeing more middle income, well educated, younger people who lost everything,” Glancy said. “The more experience you have and higher education, the harder it is to get disability [payments].”