A Bloomberg report released in early May shows an increase in the number of Americans receiving Social Security Disability (SSD) benefits: 7.1 million Americans collected disability in 2007 while 8.7 million collected benefits in April of this year.
Many people are pointing fingers at the recession, stating that a large number of unemployed people applied for SSDI once their unemployment benefits expired. While this is certainly true, the underlying notion that those individuals did not deserve those benefits is far from the truth.
Recipients of Social Security Disability benefits have large hurdles to jump over before they receive benefits. The SSD requirements are strict and do not only prevent fraud but also prevent some legitimately disabled people from receiving benefits.
Why, then, has there been an increase in benefits during the economic downturn? Some people who are legitimately able to receive Social Security disability but have been working despite serious disabilities lost their jobs. Unable to find other jobs that accommodated their disabilities, they applied for and rightfully received SSDI.
The increase in disability benefit applications can also be attributed, in part, to the increasing population age. It is a fact of life that the older you are, the greater your chance for disability. As our population has aged, so has the number of disability benefit recipients. Experts expect that this increase is nearing its peak as the baby boomers reach retirement age.
One interesting impact of the recession's increase in Social Security Disability benefits is that those new recipients who lost their jobs during the recession are not necessarily included in the number of people out of the labor force (or, in other words, those looking for work) because of the recession.
Source: Huffington Post Business, "Rise in Disability Rolls Helps Explain an Unemployment Mystery," Mark Congloff, May 3, 2012.