Social Security Disability Insurance (SSDI) covers most people who work and pay Social Security taxes. In 2016 SSDI provided vital income support to almost 11 million workers with disabilities and their families, representing 18 percent of those receiving Social Security benefits. Older workers (age 50–65) with disabilities rely heavily on the SSDI program, in part because chronic illness and disability rates are higher at older ages and because the criteria for evaluating disability change at age 50. This makes it somewhat easier for low-skilled, older workers to qualify for benefits.
In recent years the number of people receiving disability benefits has grown. This has, in part, harmed the financial outlook for the Disability Insurance (DI) Trust Fund. In 2009 its costs began to exceed income, including interest. To extend the life of the DI Trust Fund, the Bipartisan Budget Act of 2015 temporarily reallocated the payroll taxes going into the DI and Old Age and Survivor Insurance Trust Funds. As a result the DI Trust Fund will steadily decrease until its assets are depleted in 2023 rather than in late 2016, as would have been the case without the rebalancing.
The DI Trust Fund’s financial outlook has worsened for mainly demographic reasons. Overall population growth is one factor. Another is the growth in the share of the population, particularly women, that is insured for disability. Baby boomers in general are moving into more disability-prone ages. Also there is a small residual increase in new disability awards that cannot be explained by easily observable demographic changes.
However, the most significant challenge facing the integrity of the SSDI program is the unacceptably long delay in processing the applications of workers with disabilities who have earned their right to benefits. A large and growing backlog, at both the initial claims stage and especially at the appeals level, has imposed severe hardships on many workers with disabilities and their families. Workers with disabilities must wait months and often years to have their claims fully considered. Management challenges and insufficient funding are largely to blame. For years the full amount of funding that the Social Security Administration (SSA) says it needs to manage disability claims has not been provided.