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SSDI: New long-term unemployment?

Although the unstable job market makes it difficult for people to find jobs, people with barriers to employment, such as those with disabilities, are having an even harder time finding jobs.

The Social Security Disability Insurance trust fund is expected to dry up by 2018 and according to author and Cornell University Professor Richard Burkhauser, SSDI is becoming a huge drain on those funds. There is hope, however, if the proper changes are made.

Burkhauser says over the past 30 years, disability standards have increased. He says most people applying and being approved for disability insurance are claiming back or mental health issues. These conditions are difficult to verify or disprove and the hike in numbers suggest that the decision for admittance or rejection is being left to the discretion of Social Security gatekeepers. Burkhauser speculates this shift is attributed to an explicit loosing of standards regarding mental illness. Thirty years ago, these people would not have been accepted onto disability and more importantly, would have remained in the workforce.

Once a worker stops working and starts receiving disability insurance, they have little incentive to go back to work. Even those who want to work are discouraged by the lack of options available. Soon, disability is viewed more like long-term unemployment, and little effort is made to take those who are no longer disabled off the DI roll.

What's more, employers are given no incentive to keep employees on the payroll and off the disability insurance roll. Burkhauser suggests that companies that provide rehabilitation and accommodate disabled workers to keep them off disability be rewarded with lower payroll taxes, while those who have a high number of former employees going onto disability be required to pay higher DI payroll taxes.

Source: MarketWatch, "Disabled workers face barriers getting rehired," Ruth Mantell, Oct. 4, 2011

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