BEYOND THE NUMBERS
Van de Water: Work Expectations for Disability Recipients Should Be “Realistic and Grounded in Experience”
Testifying today before a House Ways and Means Committee hearing on promoting work opportunities for Disability Insurance recipients, CBPP Senior Fellow Paul Van de Water discussed the program’s existing work incentives and possible changes to them. Here’s an excerpt:
Promoting opportunity for Social Security Disability Insurance (DI) beneficiaries — especially those trying to return to work — is an appropriately lofty goal. Policymakers should continually seek new and better ways of helping people with serious impairments remain in or rejoin the workforce. But expectations should be realistic and grounded in experience.
Disability Insurance already provides many inducements for beneficiaries to work, and Congress has periodically added more work incentives. DI’s eligibility criteria are very stringent, however, and research consistently finds that most beneficiaries have limited work capacity. Further efforts to promote work are therefore likely to have only a small payoff. In fact, some options could increase DI costs, harm vulnerable beneficiaries, make the program harder to administer, or even discourage work rather than encourage it.
It’s worth testing some promising changes to DI through carefully designed demonstration projects, but those demonstrations won't yield quick answers. Congress should also consider other ways of rewarding work for people with impairments, such as expanding refundable tax credits for low-wage workers. But Congress should not expect a magic bullet that will simultaneously trim costs, make beneficiaries better off, and avert the need to replenish the DI trust fund in 2016 and beyond. Beneficiaries will face a 20 percent benefit cut if Congress does not act soon to replenish the trust fund.