Social Security Disability Insurance Rolls in Decline — Could Those in Need Be Suffering?

Denied Social Security disability application stock photo
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You should never put your total faith in trends, but it’s hard to ignore them completely. After decades of reliable increases in the share of the U.S. population receiving Social Security Disability Insurance (DI) benefits, the past few years have seen an equally steady decline in disability insurance rolls.

From 1984 to its peak in 2014, the numbers of new enrollments in the Social Security Disability Insurance (DI) program and of beneficiaries on the rolls increased steadily due mainly to three contributing factors.

First, congressional reforms in 1984 led to DI policy changes and influenced workers to enter the program and stay longer in it. Disability definitions changed, allowing more individuals with certain impairments (i.e. chronic back pain sufferers; those with mental health issues) to enroll. For people enrolled in DI, the disability income they received replaced past labor earnings.

Second, demographic shifts and an aging population allowed baby boomers to age into a demographic characterized by higher incidences of disability rates and definitions after the 1984 reforms.

Lastly, an increase of younger and female workers entering the labor force meant a bigger pool of insured workers and DI participation.

The reasons behind the decrease in rolls since 2014 are a little harder to explain. A DI beneficiary exits the program for one of three reasons: Death, recovery or conversion to retirement benefits at normal or full retirement age. But the causes behind these exits are up for speculation. Why are fewer people receiving DI benefits today than in 2014?

Are You Retirement Ready?

Certainly, many point to the COVID-19 pandemic as an explanation for decreased numbers of DI recipients, at least over the course of the past two years. In this case, common sense claims are backed up by stats. About 80% of the people who died from the virus were 65 or older and U.S. life expectancy plunged by a full year in the first half of 2020. Additionally, more people plan on retiring earlier than expected due to the pandemic.

But other factors have been floated as reasons behind the decline in DI enrollment. In 2009, the Social Security Administration (SSA) made changes to Administrative Law Judge training, with new monitoring placed on judges in charge of allowing or denying disability insurance applications. As a result, the allowance rate has declined from 57% in 2009 to 49% in 2019. It’s not a dramatic decrease in application approvals, but it might be the most problematic. Policy numbers games rarely work out for those truly in need.

Experts in the disability insurance and health industries are looking to other motivating causes to account for the drop in DI numbers like: business cycle analysis, a shift away from more physically demanding work, easier access to health care in the wake of the Affordable Care Act, the closing of SSA field offices causing undue hardship for Social Security claimants, changes to labor and workplace policies and procedures in regard to recovery (i.e.: leaving the program before death or old-age conversion and returning to work that provides a substantial level of earnings; a Disability Determination Service finding that a beneficiary is no longer disabled).

Are You Retirement Ready?

We should be thankful that all those who needed DI got it during the decades of advanced application approvals and enrollment. Hopefully, the decline in DI rolls is due to a significantly healthier population, safer work environments or simple access and application problems rather than issues that leave those who need the program the most without help.

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