Social Security Disability Insurance

In 1996, about 4.4 million working-age people received cash benefits under the Social Security Disability Insurance Program, which was established more than 40 years ago to assist persons with disabilities. The average monthly cash benefit in 1996 was $704, and cash benefits nationwide totaled about $40 billion. Not more than one in 500 beneficiaries leave the rolls by returning to work. However, relatively little is known about the factors that foster or impede self-sufficiency. Recent reform proposals have been put forth, including tax incentives, to help improve return-to-work outcomes. These reforms include changes that would (1) allow beneficiaries who work while on the rolls to keep more of their earnings, (2) safeguard medical coverage, and (3) enhance vocational rehabilitation. This report (1) identifies the self-reported health and functional status of disability insurance beneficiaries who work while still on the rolls; (2) identifies the occupations, earnings, and benefits of working beneficiaries; (3) reports factors that working beneficiaries believe were helpful in becoming employed; and (4) explores working beneficiaries' longer-term employment plans, including factors perceived as helping or hindering work plans.

GAO noted that: (1) in general, beneficiaries that GAO interviewed achieved a range of work outcomes--some had substantial attachment to the labor force, and others reported more modest gains; (2) respondents achieved these outcomes despite indicating significant limitations or difficulties associated with their impairments; (3) many respondents rated their disability as severe or somewhat severe, reported experiencing difficulty getting through the work day, and reported having difficulty performing daily tasks and activities; (4) nevertheless, beneficiaries were gainfully employed and, on average, had moderate pay and benefits; most were satisfied in their positions; (5) most beneficiaries GAO interviewed reported that financial need and the desire to enhance self-esteem were the main reasons for attempting work; (6) they indicated that a range of factors enabled them to return to work; (7) those most prominently cited were improved functioning through health care intervention and encouragement from family, friends, health care providers, and coworkers; (8) to a somewhat lesser extent, respondents told GAO that: (a) a flexible work schedule that allowed them to receive health care services; (b) job-related training and vocational rehabilitation services; and (c) high self-motivation also helped facilitate employment; (9) DI work incentives and assistance from Social Security Administration staff appeared to play a limited role in helping beneficiaries become employed, although a number of respondents said the program provision allowing them to work for a period of time without losing cash and medical benefits, as well as the provision to retain health care coverage for a limited time period after cash assistance ends, was helpful; (10) about four of every ten respondents told GAO that they planned to leave the rolls in the future; (11) availability of worksite-based health insurance appears to differentiate respondents who plan to leave the rolls in the future from respondents who plan to stay; (12) many respondents--those planning to leave the rolls as well as those planning to stay--regard their future health status as an important factor affecting their plans; (13) many respondents told GAO they had experienced impediments to employment such as limited skills and training, or employers' not recognizing their ability; and (14) such factors could affect respondents' future attachment to the labor force.