Academic journal article Social Security Bulletin

Disability Beneficiaries Who Work and Their Experience under Program Work Incentives

Academic journal article Social Security Bulletin

Disability Beneficiaries Who Work and Their Experience under Program Work Incentives

Article excerpt

This research examines the return to work by Disability Insurance beneficiaries who were first entitled to benefits in 1980-81 and who were originally selected to be interviewed in the New Beneficiary Survey. To facilitate an examination of actual labor-force participation by beneficiaries, information on work and participation in program work incentives was collected from their claims folders. The analysis shows that approximately 10 percent of disability beneficiaries work during their initial period of benefit entitlement. About 80 percent are granted a trial work period, and over 70 percent of those granted trial work successfully complete it. More than half of them, however, were not successful in leaving the rolls through their work effort. In fact, benefit terminations due to work occurred for fewer than 3 percent of all beneficiaries in the cohort; approximately one-third of them had returned to the rolls by the end of the period under study. Beneficiaries most likely to make a work attempt were young and had a high level of education. Those with a high Social Security benefit amount were less likely to make a work attempt.

In 1990, the Social Security program paid Disability Insurance (DI) benefits totaling $28.8 billion to disabled workers (3.0 million) and their dependents (1.3 million). In 1989(1) Medicare benefits of more than $10 billion were provided to disability beneficiaries who had been on the rolls for more than 24 months. Although 462,000 individuals became entitled to benefits in 1990, 344,000 left the rolls. Death or attainment of age 65 accounted for 318,000 of those terminations. Only 26,000 individuals left the rolls because of a medical recovery or a return to work. The number of beneficiaries returning to work has remained small despite improvements in program work incentives over the history of the DI program.

This research examines post-entitlement work efforts among a cohort of beneficiaries becoming entitled to disability benefits for the first time during the period beginning July 1980 and ending June 1981, and who were interviewed as part of the 1982 New Beneficiary Survey (NBS). Using data from the NBS as a baseline, information on post-entitlement work while in beneficiary status was collected from beneficiary claims folders. This article focuses on who works while in beneficiary status and their participation in DI program work incentive provisions such as the trial work period (TWP) and extended period of eligibility (EPE), and examines the programmatic outcomes associated with the work attempt. The description of work patterns under the TWP and EPE provides some insight into why some individuals who have successful outcomes under the work incentive provisions eventually return to the DI rolls.

Prior studies on work and benefit terminations have been relatively limited. Past research on work by Disability Insurance beneficiaries have focused on Social Security posted earnings as an indicator of work,(2) yet there is evidence that half the beneficiaries with posted earnings in a given year report not having worked that year.(3) Examination of claims folders in this project show that some of the discrepancy can be accounted for by commissions from prior year's work, back pay, sick pay, profit sharing, pension income, and, to some extent, misposted earnings. This research extends the prior studies by establishing that, for program purposes, actual labor-force activity occurred. Past studies on benefit terminations(4) focused on terminations in general, due to the inability to separate the reason for termination: medical recovery or earnings above the substantial gainful activity (SGA) level. That research melded the outcomes of two potentially divergent processes.

This article extends the previous analysis by separating return to work from medical recoveries and focusing solely on the return to work process. It examines work as the first event occurring after an individual becomes a beneficiary. …

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