CBO report: Demographic trends fueling SSDI expansion

In a response to a request from Sen. Jeff Sessions (R-Ala.) amid concerns on Capital Hill regarding the recent influx in the number of people applying for federal disability benefits, the nonpartisan Congressional Budget Office released a new report July 16 that highlighted demographic changes as the largest factor in the expansion.

Growth  bar chart with colored bars going short to tall with arrow pointing upward
SSDI claims up – aging baby boomers a cause

The number of people on SSDI has swelled during the recession, increasing from 7.4 million recipients in 2008 to 8.6 million in 2011. In July, more people went on SSDI than entered the workforce.

The paper cited the aging of the Baby Boomers as the largest factor in describing the program’s growth. Between 2006 and 2009, the share of workers ages 45 and older rose form 67 to percent and 76 percent. When people turn 65, or in some case 62, they enrolled in Social Security’s regular retirement program.

The paper also highlighted the increased number of women in the workforce, and corresponding increase in the number of people likely to injure themselves on the job, as a key factor in growth as well.

Another factor that has contributed to the long-term increase was the changed eligibility requirements in the 1980s, which allowed a significant increase in the number of people with mental and musculosketal disabilities.

The increased difficulty of finding employment is also a large incentive to encourage people with disabilities to apply for SSDI. During the recession, the percentage of people with disabilities in the workforce has collapsed by about 10 percent, compared to about two percent in the general population.

To quality for SSDI, people must have worked for five of the previous 10 years and be unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment that can be expected to last for more than a year.

The average monthly benefit for a person on SSDI is $1,111. About 61 percent of people who apply for benefits are denied on the first attempt.