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Disability and Unemployment: Putting an End to Double-Dipping

Posted By Romina Boccia On June 10, 2013 @ 3:03 pm In Economics | Comments Disabled

Courtney Keating/iStock [1]

Courtney Keating/iStock

The number of people on Social Security Disability Insurance (SSDI) reached a record high this year. But a large number of people are double-dipping from both the disability insurance (DI) and unemployment insurance (UI) programs. A bill introduced last week would put an end to these overpayments, which unnecessarily drain the disability trust fund.

The DI trust fund will run dry in 2016 [2], which means that in the absence of reform—or drawing from Social Security’s Old-Age and Survivors Insurance (OASI) trust fund—DI program benefits would have to be reduced by 20 percent. DI’s financial problems are putting the benefits of some of the most vulnerable populations at risk. Meanwhile, 117,000 individuals received $850 million [3] in cash benefits from both programs simultaneously.

Senators Tom Coburn (R–OK), Jeff Flake (R–AZ), Angus King (I–ME), and Joe Manchin (D–WV) introduced the Reducing Overlapping Payments Act [4], a bipartisan proposal to remedy a legal loophole that allows people to draw from both disability and unemployment benefits. President Obama also included a similar proposal in his 2014 budget.

Heritage’s Laura Trueman reported [5] on this issue last year, providing the following examples:

Take the case of a woman who collected a cool $62,000 in combined government payouts through DI and UI while managing to work and collect another $7,000 in income. Her DI benefits were based on a malady from the classification of “Affective Disorders and Substance Addiction Disorders (Drugs).”As of April, she was still collecting $2,377 a month in DI benefits while the Social Security Administration reviews her case.

A second individual admitted to defrauding both the UI and DI programs by working construction while collecting benefits. Ironically, his initial disability benefit was awarded due to a back ailment. Most amazing is the fact that his UI payments were drawn from four different states, showing true determination to stay on the public dole. As of April, he, too, was still receiving disability payments for back problems—while doing construction, mind you.

The conditions for eligibility of the two programs are mutually exclusive: The DI program serves individuals who are deemed physically or mentally unable to work; the UI program replaces some of the lost earnings of those who become unemployed but are otherwise able to work. Thus, people should not be allowed to draw from both programs simultaneously.

According to a summary of their proposal, the bill by Coburn and his colleagues would authorize the Social Security Administration (SSA) to identify and eliminate these overlapping payments. The SSA would work together with the states to identify individuals who double-dip and would suspend DI benefits during months that individuals were drawing from UI.

This is an important improvement and could save the DI program hundreds of millions of dollars, which it could allocate to those who truly need them.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2013/06/10/disability-and-unemployment-putting-an-end-to-double-dipping/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/Social-Security-Form.jpg

[2] run dry in 2016: http://www.heritage.org/research/reports/2013/05/2013-social-security-trust-fund-reports-massive-deficits-benefit-cuts

[3] $850 million: http://www.gao.gov/products/D02946

[4] Reducing Overlapping Payments Act: http://www.coburn.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=5f02f5ef-31f3-435e-a5ac-3a217dbedd87&ContentType_id=d741b7a7-7863-4223-9904-8cb9378aa03a&Group_id=7a55cb96-4639-4dac-8c0c-99a4a227bd3a

[5] reported: http://blog.heritage.org/2012/09/11/freeloaders-on-safety-net-programs-double-dip-to-get-thousands-in-taxpayer-dollars/

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