Social Security Disability Insurance is at a crossroads
Modernization of the claims process will have winners and losers
Many older Americans have a simple plan for paying for retirement: keep working longer, or never stop working at all. But for a large share of workers, that plan falls apart. About 40% of people who are employed end up leaving their jobs earlier than expected, often because of an unexpected disability.
When that happens, the consequences for retirement security can be severe. Lost wages can force disabled workers to burn through their savings and claim Social Security as early as age 62, locking in permanently lower benefits instead of the higher payments that come with waiting.
There is, however, an important alternative. Older workers who become disabled can apply for Social Security Disability Insurance, which replaces a substantial share of the retirement benefit they would otherwise receive later.
While retirees make up the largest group of Social Security beneficiaries, SSDI serves a significant population—about 8.2 million people with physical impairments or conditions such as intellectual or mental disorders. Roughly three-quarters of those beneficiaries are age 50 or older, and many have low incomes. For them, disability benefits often act as a bridge to retirement, keeping a large share out of poverty.
But the program is at a turning point. Applicants have long faced extremely long waits for decisions, and policymakers have been debating how best to modernize the process Social Security uses to determine eligibility.
That debate moved into public view recently, with reports that the Social Security Administration had paused work on a plan to overhaul the disability application system. The proposal would have updated an outdated database the agency uses to determine whether jobs exist that an applicant could perform. At the same time, it would have made it harder for people over age 50 to qualify.
Some experts expect the agency to return to the project eventually, particularly the long-overdue update to the jobs database.
But one part of the proposal raised serious concerns: it would have increased the age at which age is considered in disability decisions from 50 to 60. Disability experts warn that such a change would lead to more denials for older, vulnerable workers who have few realistic options left in the labor market.
My latest “Retiring” column for The New York Times explores the policy debate on SSDI - and the potential winners and losers.
Social Security plans to cut field office visits by 50%
The Social Security Administration is planning to cut visits to its field offices in half next year, according to internal agency documents. The agency has been nudging people for years to do more business online. But a reduction this large would leave many Americans with few good options for dealing with Social Security.
The people most likely to feel the impact are those with complicated cases—especially anyone applying for Social Security Disability Insurance or Supplemental Security Income. These are situations where online forms and portals often fall short, and where in-person help really matters.
The plan also seems to run in the opposite direction of an announcement the agency made in March. At that time, Social Security said that new and existing beneficiaries who couldn’t use its online system would need to visit a field office to verify their identity. It’s hard to see how that requirement squares with cutting office visits by 50%.
It’s not yet clear how Social Security would pull this off. The agency could close offices, cut back hours, or make it harder to get an appointment. But the bottom line is simple: when it becomes harder to access benefits, fewer people end up receiving them. In real terms, that functions as a benefit cut.
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