With the ailing economy, many have found that they are unable to find a job by the time their unemployment benefits run out, even with the government extensions that have been put in place. Especially among older populations, good jobs that pay well are hard to come by. This has led many to turn to Social Security Disability benefits to help them stay afloat. These benefits provide a monthly cash benefit as well as access to state-funded insurance.
The Obama administration last week released preliminary findings of a study by the director of the White House Council of Economic Advisers and a professor from Columbia Business School. Their interviews with unemployed workers found that as many as 10 percent of those who are between the ages of 50 and 65 who didn’t have access to at least $5,000 applied for disability benefits by the time their unemployment benefits expired. The closer to the time the benefits were set to expire, the more workers applied for Social Security benefits.
This trend is anything but new. There’s a long history of Americans seeking access to these benefits when the job market is down. But in one of the worst economic downturns since the Great Depression, where will the trend lead?
The Social Security Disability Insurance program was designed to help those who were prevented from working by illness or injury. Since its creation in the 1950s, it has grown substantially, now paying $130 million in benefits to 10.6 million workers. But there’s fear that as more individuals subscribe to disability, the funding will dry up within the decade. The fund’s reserves are projected to be exhausted by 2017 if changes to the program aren’t made. If and when that happens, neither the unemployed nor the disabled people the fund was designed to support will be able to benefit from the government fund.
Source: Wall Street Journal, “Study Links Expiring Unemployment Benefits to Disability Applications,” Damian Paletta, Dec. 16, 2011