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Social Security Disability Insurance
Social Security Disability Insurance (SSD or SSDI) is a payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide monthly benefits to people who have a medically determinable disability (physical or mental) that restricts their ability to be employed. SSDI does not provide partial or temporary benefits but rather pays only full benefits and only pays benefits in cases in which the disability is "expected to last at least one year or result in death". Relative to disability programs in other countries in the Organisation for Economic Co-operation and Development (OECD), the SSDI program in the United States has strict requirements regarding eligibility.
SSDI is distinct from Supplemental Security Income (SSI). Unlike SSDI (as well as Social Security retirement benefits) where payment is based on contribution credits earned through previous work and therefore treated as an insurance benefit without reference to other income or assets, SSI is a means-tested program in the United States for disabled children, disabled adults, and the elderly who have income and resources below administratively mandated thresholds. A person of any income level found disabled by the SSA (a finding based on legal and medical justification) can receive SSDI. ('Disability' under SSDI is measured by a different standard than under the Americans with Disabilities Act.)
Informal names for SSDI include Disability Insurance Benefits (DIB) and Title II disability benefits. These names come from the chapter title of the governing section of the Social Security Act. The original Social Security Act of 1935 did not include disability insurance. After two decades of policy discussion, disability benefits were introduced through the Social Security Amendments of 1956, which was signed into law by President Dwight D. Eisenhower on August 1, 1956. These amendments authorized monthly payments for permanently and totally disabled workers over 50 years old beginning in July 1957. Beginning in 1960, eligibility for disabled workers was extended to individuals of any age.
At the end of 2020, there were 9.7 million Americans receiving benefits from the SSDI program. This included 8.2 million disabled workers, 1.4 million children of disabled workers, and 0.1 million spouses of disabled workers. Children and spouses are sometimes referred to as auxiliary beneficiaries because they receive benefits based on their relationship to a disabled worker, not because they are necessarily disabled.
The number of beneficiaries grew rapidly between 1990 and 2010 before leveling off and then declining in recent years. Two schools of thought developed to explain the rapid growth in the program during the 1990s and early 2000s. According to David Autor and Mark Duggan, policy changes and earnings patterns were responsible for the growth. With regard to policy, Autor and Duggan argue an SSDI reform act loosened the disability screening process, leading to more SSDI awards and shifting their composition towards claimants with low-mortality disorders such as mental illness and back pain. With regard to earnings patterns, Autor and Duggan argue SSDI benefits rose in value relative to what recipients would have earned from employment, prompting greater numbers of individuals to seek benefits. The second school of thought on program growth in the 1990s and early 2000s emphasized demographic factors such as population growth, aging of the baby boom generation into their disability-prone years, growth in women's labor force participation, and the increase in Social Security's full retirement age from 65 to 66.
The number of disabled workers peaked in 2014 at 9.0 million and has declined in each year since, reaching 8.2 million individuals in 2020.
Concerns about the Disability Insurance (DI) Trust Fund's solvency arose from rapid program growth in the 1990s and early 2000s. In response, Congress temporarily reallocated a portion of payroll taxes from the Old-Age and Survivors Insurance (OASI) Trust Fund to the DI Trust Fund. A 2020 report projected depletion in 2065, followed by a 2021 analysis projecting depletion in 2057. However, the 2024 analysis projects the DI Trust Fund will be able to pay full benefits through the end of the 75-year projection period (2098).
In addition to disabled workers, the Social Security program also pays benefits to disabled widow(er)s and disabled adult children. These beneficiaries are often analyzed along with disabled workers because the same definition of disability is used in the eligibility process. However, disabled widow(er) benefits are paid out of the Old-Age and Survivors Insurance (OASI) Trust Fund and disabled adult children may be paid out of the OASI or DI Trust Fund depending on whether the adult child qualifies because a parent is deceased or retired or whether a parent is disabled. In 2019, there were 1.14 million disabled adult children and 0.25 million disabled widow(er)s receiving benefits.
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Social Security Disability Insurance
Social Security Disability Insurance (SSD or SSDI) is a payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide monthly benefits to people who have a medically determinable disability (physical or mental) that restricts their ability to be employed. SSDI does not provide partial or temporary benefits but rather pays only full benefits and only pays benefits in cases in which the disability is "expected to last at least one year or result in death". Relative to disability programs in other countries in the Organisation for Economic Co-operation and Development (OECD), the SSDI program in the United States has strict requirements regarding eligibility.
SSDI is distinct from Supplemental Security Income (SSI). Unlike SSDI (as well as Social Security retirement benefits) where payment is based on contribution credits earned through previous work and therefore treated as an insurance benefit without reference to other income or assets, SSI is a means-tested program in the United States for disabled children, disabled adults, and the elderly who have income and resources below administratively mandated thresholds. A person of any income level found disabled by the SSA (a finding based on legal and medical justification) can receive SSDI. ('Disability' under SSDI is measured by a different standard than under the Americans with Disabilities Act.)
Informal names for SSDI include Disability Insurance Benefits (DIB) and Title II disability benefits. These names come from the chapter title of the governing section of the Social Security Act. The original Social Security Act of 1935 did not include disability insurance. After two decades of policy discussion, disability benefits were introduced through the Social Security Amendments of 1956, which was signed into law by President Dwight D. Eisenhower on August 1, 1956. These amendments authorized monthly payments for permanently and totally disabled workers over 50 years old beginning in July 1957. Beginning in 1960, eligibility for disabled workers was extended to individuals of any age.
At the end of 2020, there were 9.7 million Americans receiving benefits from the SSDI program. This included 8.2 million disabled workers, 1.4 million children of disabled workers, and 0.1 million spouses of disabled workers. Children and spouses are sometimes referred to as auxiliary beneficiaries because they receive benefits based on their relationship to a disabled worker, not because they are necessarily disabled.
The number of beneficiaries grew rapidly between 1990 and 2010 before leveling off and then declining in recent years. Two schools of thought developed to explain the rapid growth in the program during the 1990s and early 2000s. According to David Autor and Mark Duggan, policy changes and earnings patterns were responsible for the growth. With regard to policy, Autor and Duggan argue an SSDI reform act loosened the disability screening process, leading to more SSDI awards and shifting their composition towards claimants with low-mortality disorders such as mental illness and back pain. With regard to earnings patterns, Autor and Duggan argue SSDI benefits rose in value relative to what recipients would have earned from employment, prompting greater numbers of individuals to seek benefits. The second school of thought on program growth in the 1990s and early 2000s emphasized demographic factors such as population growth, aging of the baby boom generation into their disability-prone years, growth in women's labor force participation, and the increase in Social Security's full retirement age from 65 to 66.
The number of disabled workers peaked in 2014 at 9.0 million and has declined in each year since, reaching 8.2 million individuals in 2020.
Concerns about the Disability Insurance (DI) Trust Fund's solvency arose from rapid program growth in the 1990s and early 2000s. In response, Congress temporarily reallocated a portion of payroll taxes from the Old-Age and Survivors Insurance (OASI) Trust Fund to the DI Trust Fund. A 2020 report projected depletion in 2065, followed by a 2021 analysis projecting depletion in 2057. However, the 2024 analysis projects the DI Trust Fund will be able to pay full benefits through the end of the 75-year projection period (2098).
In addition to disabled workers, the Social Security program also pays benefits to disabled widow(er)s and disabled adult children. These beneficiaries are often analyzed along with disabled workers because the same definition of disability is used in the eligibility process. However, disabled widow(er) benefits are paid out of the Old-Age and Survivors Insurance (OASI) Trust Fund and disabled adult children may be paid out of the OASI or DI Trust Fund depending on whether the adult child qualifies because a parent is deceased or retired or whether a parent is disabled. In 2019, there were 1.14 million disabled adult children and 0.25 million disabled widow(er)s receiving benefits.