Social Security Slows Disability Payments

When potential clients tell me that they don’t need disability insurance because they will be taken care of by Social Security, I show them statistics about SSDI payments (or lack thereof) and how long they might have to wait for payments if and when they are approved. Consider these statistics from the Council for Disability Awareness (CDA) website:

• 65% of initial SSDI claim applications were denied in 2009.
  Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov

• Can your family live on $1,065 a month? That’s the average monthly benefit paid by Social Security Disability Insurance (SSDI) in June of 2010. 8% of SSDI recipients received less than $500 monthly. 52% received less than $1,000 per month. 97% received less than $2,000 per month.
  Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov

   

   

• The average SSDI monthly benefit payment was $1,190 for males, and $928 for females.
  Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov

• Less than 5% of disabling accidents and illnesses are work related. The other 95% are not, meaning Workers’ Compensation doesn’t cover them. Council for Disability Awareness, Long-Term Disability Claims Review, 2011 http://www.disabilitycanhappen.org/research/CDA_LTD_Claims_Survey_2011.asp

Usually these statistics are enough to convince people that depending on Social Security for disability benefits is probably not a wise decision. However, an article I read in last Friday’s (9/30/11) Wall Street Journal gave me one more very good reason I hadn’t seen before. According to the article, Social Security judges and employees in at least seven states were instructed to sandbag (set aside) disability cases for a week so that the following week there would be a significant boost in the numbers for the coming fiscal year – which began a week later.

These officials, apparently in a bid to meet goals to win promotions and thousands of dollars in bonuses, directed employees to withhold decisions on cases for a week, thereby delaying payments to thousands of citizens, most of them in desperate need of those benefit checks. To give you an idea of how many cases were delayed, in the first day of these delays, 230 cases were reviewed and closed…compared to roughly 3,000 it usually averages in a day.

This post isn’t intended to raise your ire at the inefficiencies of our Federal Government. I’ll leave that to other Bloggers and reporters. However, if you are considering purchasing a disability insurance policy and have thought that maybe you could put it off because Social Security will “take care of you,” this, along with the other statistics presented above should, at the least, give you pause.

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