Employment of People with Disabilities: Strategies to Reduce SSDI Growth and Improve Economic Well-Being Gina Livermore Mathematica Policy Research Presented at the Urban Institute Forum on Social Security Disability Insurance: Challenges and Opportunities June 21, 2013

Relative to Peers, Working-Age People with Disabilities Fare Poorly ●Very low employment –Employment in 2012: 27% vs. 71% for others (StatsRRTC 2012) ●Much higher poverty rates –31% for those with disabilities vs. 12% for others in 2012 (StatsRRTC 2012) –48% of all SSDI/SSI beneficiaries and 27% of SSDI-only beneficiaries in 2010 (Wright et al. 2012) –65% of those in poverty for 3 or more years have a disability (She and Livermore 2009) ●Holding income constant, much higher rates of material hardship (She and Livermore 2007) 2

People with Disabilities Have Been Falling Further Behind* *Statistics are for those with work limitations vs. those without work limitations. Source: Nazarov and Lee (2011). 3

Category FY 2008 Expenditures (in billions) Percentage of Total Percentage Change, FY 2002–2008 (inflation adjusted) Income maintenance$ Health care$ Housing/food assistance $ Education, training, and employment $ Other services $ Total$ Federal Expenditures Are High and Rising Rapidly Source: Livermore et al. (2011). 4

Dependence on Government Support Is Increasing Beneficiaries Expected due to changes in labor force (LF)* size/age/sex *LF is number of workers insured for disability, including all disabled worker beneficiaries 5

●Expand eligibility and benefits to address poor and declining economic status ●Tighten eligibility and benefits to address growth in SSDI expenditures ●Consider untested reforms focused on employment retention and return to work, designed to: –Improve economic status –Reduce expenditure growth The Options 6

●Proposals –Private disability benefits, mandatory for two years –Experience-rate the SSDI payroll tax –Block grants –Restructure SSDI work incentives and supports –Early intervention alternative to SSDI ●Evidence is inadequate to support major reforms Untested Proposals Aimed at Promoting Employment 7

●Single door to tailored supports and integrated eligibility determination –Target and provide supports to workers heading for SSDI ●Integrate SSDI with workers’ compensation and private disability benefits –Structure to give employers incentives to retain and support workers ●Improve education and transition programs for youth and young adults with disabilities –ED/SSA PROMISE initiative Features of Employment-Focused Reforms: Early Intervention 8

Window of Opportunity for Early Intervention Appears Large SSDI Entry Source: Livermore et al. (2010). 9

●To date, SSA’s efforts to support beneficiary employment have been met with limited success ●Need to restructure benefits to make work pay, encourage savings, and support community living –Simplify SSDI work incentives –Eliminate the SSDI cash cliff –Provide access to needed supports Features of Employment-Focused Reforms: SSDI Beneficiary Employment 10

Great Potential to Improve SSDI Beneficiary Employment Outcomes (1) Source: Stapleton et al. (2010). *Earnings through 2006 only. Employment and SSDI Benefit Suspensions During First Six Years on SSDI (2001 award cohort) 11

●Evidence from the 2010 National Beneficiary Survey (Wright et al. 2012) –41% of all beneficiaries reported having work goals or saw themselves working for pay within the next five years –About 15% of SSDI beneficiaries had jobs, were actively seeking jobs, or had worked during the previous calendar year –19% of working SSDI-only beneficiaries had monthly earnings above the substantial gainful activity level –23% of working beneficiaries indicated they worked fewer hours or earned less than they were capable of earning ▪40% cited fear of benefit loss as a reason for doing so Great Potential to Improve SSDI Beneficiary Employment Outcomes (2) 12

Work-Oriented Beneficiaries Face Many Employment Obstacles ●About 30% lack a high school diploma ●36% have received SSDI for 10 or more years ●33% say their health is poor or very poor ●31% say their health is worse than in the prior year Selected Reasons for Not Working % of Work- Oriented SSDI-Only Beneficiaries Not Working at Interview75 Reasons for Not Working Physical or mental condition prevents work93 Discouraged by previous work attempts39 Cannot find a job for which s/he is qualified34 Workplaces are not accessible31 Employers will not give him/her a chance28 Others do not think s/he can work28 Lacks reliable transportation to/from work21 Cannot find a job s/he wants21 Doesn’t want to lose cash/insurance benefits12 Is caring for someone else 8 Waiting to finish school/training program 6 Source: Livermore et al. (2009). 13

●Short-term strategies to address the SSDI Trust Fund imbalance will likely work but will adversely affect a vulnerable population ●More radical strategies are needed to reverse the downward trend in employment and rapid program growth –These strategies could reduce expenditures and improve the well-being of people with disabilities ●The current SSDI scrutiny and fiscal crisis offer an opportunity to reform supports for working-age people with disabilities Conclusions 14

●Livermore, G., A. Roche, and S. Prenovitz. “SSI and DI Beneficiaries with Work-Related Goals and Expectations.” Washington, DC: Mathematica Policy Research, ●Livermore, G., D. Stapleton, and M. O’Toole. “Health Care Costs Are a Key Driver of Growth in Federal and State Assistance to Working-Age People with Disabilities.” Health Affairs, vol. 30, no. 9, September 2011, pp. 1664–1674. ●Livermore, G., D. Stapleton, and H. Claypool. “Health Care When Workers Need It Most: Before and After Entry into the Social Security Disability Insurance Program.” Inquiry, vol. 47, no. 2, summer 2010, pp. 135–149. ●Nazarov, Z. and Lee, C. “Disability Statistics from the Current Population Survey.” Ithaca, NY: Cornell University StatsRRTC. References (1) 15

●She, P., and G. Livermore. “Long-Term Poverty and Disability Among Working-Age Adults.” Journal of Disability Policy Studies, vol. 19, no. 4, 2009, pp. 244–256. ●She, P., and G. Livermore. “Material Hardship, Disability, and Poverty Among Working-Age Adults.” Social Science Quarterly, vol. 88, no. 4, 2007, pp. 970–989. ●Stapleton, D., S. Liu, and D. Phelps. “Longitudinal Statistics for New Social Security Disability Insurance Beneficiaries.” Washington, DC: Mathematica Policy Research, ●StatsRRTC Annual Disability Statistics Compendium. University of New Hampshire, Durham, NH: StatsRRTC, ●Wright, D., G. Livermore, D. Hoffman, E. Grau, and M. Bardos. “2010 National Beneficiary Survey: Methodology and Descriptive Statistics.” Washington, DC: Mathematica Policy Research, References (2) 16

Contact Information The Center for Studying Disability Policy Mathematica Policy Research st Street, NE, 12th Floor Washington, DC Gina Livermore (202)