Unemployment for people with disabilities reached its highest rate in nine months, according to a quarterly study by Allsup. At the same time, the Allsup Disability Study: Income at Risk shows the number of people applying for Social Security Disability Insurance (SSDI) benefits continues to climb, and the backlog of SSDI claims continues to slow people’s ability to receive their financial benefits.
Specifically, the quarterly Allsup study shows that for the second quarter of 2009, people with disabilities experienced an unemployment rate 53 percent higher than people without disabilities. Specifically, the unemployment rate for the second quarter averaged 13.6 percent for people with disabilities, compared to 8.9 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Department of Labor.
For June, the unemployment rate for people with disabilities reached 14.3 percent, the highest since the Bureau of Labor Statistics (BLS) began reporting data on unemployment rates for people with disabilities last October. This compares to a 9.5 percent unemployment rate for people with no disabilities, also the highest during this same period. However, people with disabilities consistently continued to experience higher rates of unemployment.
BLS also reported that during June, three in 10 of the unemployed had been jobless for 27 weeks or more.
“People who may have been holding on to their jobs despite mild disabilities in the early stages of the recession may now have been out of work for several months,” said Paul Gada, personal financial planning director for Allsup. “Their health may have continued to deteriorate with the stress of no income and potentially no health insurance coverage further exacerbating their condition and putting them at significant financial risk. They may now be recognizing that even if they could find work, they are physically unable to work.”
The Allsup Disability Study: Income at Risk shows that the number of people with disabilities unable to work and applying for SSDI continues to climb. Disability applications rose to more than 727,000 in the second quarter of 2009, up 7 percent from the first quarter. Year to date there has been a 22-percent jump in initial disability applications compared to year to date 2008.
The number of people applying for Social Security disability benefits has a direct impact on the ability of the Social Security Administration (SSA) to process claims. For example, Allsup’s analysis of the Social Security disability 2008 backlog showed that more than 1.4 million people had applications pending. The average time to receive an award was more than 2.5 years (942 days). For the hundreds of thousands awaiting a review of their case by an administrative law judge, the wait can take two to four years, based on additional Allsup analysis.
“It’s crucial that people know the SSDI eligibility criteria before they apply for SSDI benefits,” said Gada. “This helps minimize further bottlenecks in the SSDI process and ensures qualifying people begin receiving monthly SSDI benefits as soon as possible.”
Deciding to Apply for SSDI Benefits
Eligibility for SSDI is determined by the SSA. Generally, applicants are considered disabled by the SSA if:
- They cannot do the work they did previously;
- They cannot do other work because of their disability; and
- Their disability has lasted or is expected to last at least one year, or result in death.
To qualify for SSDI, a person also must have worked and paid into the program (via FICA payroll taxes) for five of the last 10 years and be under retirement age.
“If you do qualify, it’s important to apply as soon as possible and to ensure your application is as thorough as possible,” said Gada. “Delaying the application process or not providing the detail needed will prolong the process and leave you without essential benefits.”
Gada noted that applying for SSDI benefits entails an extensive amount of paperwork. This includes completing an initial Social Security disability application and, in most instances, a detailed activities of daily living questionnaire. This requires detail on the person’s work history and the impact of the disability on his or her day-to-day activities. A doctor must verify information and additional medical exams may be required if there is not enough information to make a decision.
Only 35 percent of initial applications are approved on average, requiring those who are denied to apply for reconsideration and advance further in the SSDI process. Individuals can improve their chances of securing benefits earlier in the process by getting help. For example, more than 54 percent of those who hire Allsup for SSDI representation receive their awards at the initial application. Overall, 98 percent of people that complete the SSDI process with Allsup receive awards.