Will I Likely Get a Disability Review at Age 62?

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SOCIAL SECURITY
Disability INSURANCE Plan
WORKER Experience

ACTUARIAL Written report NO. 114

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IV. EXPERIENCE OF DISABILITY Benefit TERMINATION

A. Groundwork

The reasons for termination of DI benefits for disabled workers tin can be grouped into four main categories:

• Death;

• Recovery--casher no longer meets the standards used to define disability (includes medical recovery or return to work);

• Conversion--disability benefit is converted to an old-age benefit upon attainment of the normal retirement age (currently 65); and

• All other reasons ^ten .

Generally, the final month of entitlement to disability benefits for a worker is the earliest of the post-obit:

• The month before the month in which the worker dies;

• The month earlier the month in which the worker attains normal retirement historic period; or

• The 2nd month after the month in which the beneficiary recovers ^xi .

The police force contains several provisions for individuals who wish to return to work, but go along to accept a disabling harm:

• Trial piece of work period;

• Extended period of eligibility;

• Extension of Medicare coverage; and

• Waiver of the waiting period.

The trial work menstruation (TWP) is a nine-month menstruum--not necessarily sequent--during which an entitled beneficiary may work without affecting the right to benefits. Earnings during the 9 months are not counted toward SGA, and benefits will go on as long as the beneficiary has non medically recovered.

Individuals who continue to have a disabling harm following the 9-calendar month TWP, receive an extended menses of eligibility (EPE). Earnings during the EPE are counted toward SGA, and monthly benefits will not be paid when such earnings exceed the SGA limit. If earnings fall below the SGA limit anytime during the EPE, benefits are automatically reinstated. Constructive Jan 1, 1988, the law was amended to lengthen the EPE from 15 months to 36 months for individuals entitled to benefits in Jan 1988 or later.

Later on 24 months of disability entitlement, a beneficiary becomes eligible for Medicare coverage (regardless of age). Coverage will proceed every bit long as the individual remains entitled. In the case of an individual engaging in SGA, coverage will extend throughout the TWP and the EPE.

Special provisions are extended to individuals experiencing multiple periods of disability. Individuals who go re-entitled to benefits within 5 years of the stop of a previous flow of disability are not required to satisfy the 5-month waiting menstruation. In addition, the 24-month waiting menstruation for Medicare coverage need not be consecutive months and time may accrue over multiple periods of disability.

Get-go at age 62, a disabled worker may elect to receive sometime-age benefits in lieu of inability benefits. Conversion to former-age benefits--payable under the Quondam-Historic period and Survivors Insurance (OASI) program-- occurs automatically upon attainment of normal retirement historic period. Roughly 85 percent of conversions take place at this age. The personal decision to catechumen prior to age 65 may be influenced by many factors. Ane of the most common reasons is the existence of benefits payable outside the DI programme. For instance, worker's compensation benefits may partially or totally get-go a DI disability benefit, only would not touch on an OASI benefit. Some other common economical factor is the difference in maximum family unit benefits payable under the DI program, which may be lower than the maximum payable under the OASI program. Personal factors may likewise influence the decision to convert, including the beneficiary'due south ain health assessment and outlook of life expectancy. In any consequence, information technology is unclear whether the individuals who switch to the OASI rolls are any more or any less likely to die or recover in the short term than those who remain on the DI rolls. Since this study observes just the action of the DI rolls, it is not clear whether the decrement rates presented in the tables that follow are in any fashion biased for attained ages 62-64. The reader is referred to the appendix for details.

Disability recovery may occur when the beneficiary either notifies SSA of an improved disabling condition, demonstrates the power to engage in SGA, or is judged to no longer see the definition of disability. The DDS or the cardinal office will bear a continuing disability review (CDR) from fourth dimension to time based on warranting situations such every bit:

• Maturing of a scheduled CDR diary date;

• Posting of substantial earnings; or

• Voluntary or vocational rehabilitation reports of an improved disabling condition.

Information technology is worth noting that certain "outside" variables can significantly influence the rate of recovery. Current disability caseloads, backlogs, upkeep restrictions, and legislation, all affect the level of CDR activity and, consequently, the rate of recovery. To a bottom extent, mortality rates are also afflicted by exogenous variables. For example, the elimination of drug and alcohol related impairments, and an increment in allowance based on vocational factors or mental impairments may atomic number 82 to an improvement in the overall bloodshed profile of the disability rolls.

B. History

Many variables can affect the rate at which beneficiaries are terminated from the DI rolls, including:

• The nature of disabling conditions;

• Changes in regulations that affect the composition of the DI rolls;

• Vocational rehabilitation support;

• CDR activity;

• Courtroom decisions; and

• The level of legal representation and appeal.

The Social Security Amendments of 1965 (Public Police 89-97) modified the definition of disability by replacing the requirement of permanent disability with the expectation that the disability last at least 12 months. This led to the entitlement of less seriously impaired claimants and lower mortality rates among the disabled. The 1967 amendments eased the insured status requirements for claimants nether historic period 31. A growing portion of younger and relatively healthier beneficiaries farther contributed to the decline in the mortality rates of the DI rolls.

As mortality rates barbarous in the early on years of the plan, the gross recovery rate generally increased. With the introduction of government-funded rehabilitation programs, elimination of the "permanently disabled" status, and the extension of benefits to younger claimants, the recovery rate among beneficiaries rose from nineteen per yard in 1965 to 32 per thousand by 1967. Thereafter, the gross recovery rate decreased chop-chop through 1975. This was due in large role to changes in the administration of the program. With the introduction of the Black Lung and SSI programs in the early 1970s, workload pressures resulted in the suspension or cutback of some administrative review procedures. For example, by 1972 the key office reviewed only 10 percent of DDS continuances in which medical recovery was expected. Previously, 100 percent of such continuances were reviewed. By 1976, the gross recovery rate began to increment again as central office review of continuances returned to 100 percentage.

Throughout the 1970s, the DI program experienced substantial increases in cost, mainly the upshot of significant growth in incidence. Under and so-electric current policy, reviews were performed only in those cases where the beneficiary's condition was expected to ameliorate, or voluntary reports or posted earnings indicated work activity. Even so, past the late 1970s measures to curtail inaccurate award determinations and improve the review process were intensified. One significant provision of the 1980 amendments required that beneficiaries with non-permanent impairments exist reviewed every three years, and permanently disabled beneficiaries exist reviewed at intervals adamant by the Commissioner. Using that legislative mandate, the Reagan Administration initiated a major review of the disability rolls that resulted in a big number of cases in which it was adamant that recovery had occurred.

Ensuing public disapproval of the newly implemented review procedure led to a moratorium on reviews of all cases of mental impairment disability. ¹² Revision of mental impairment criteria and the review procedure followed and more half of those removed from the rolls were reinstated upon entreatment. The result was a sharp drop in recoveries as well as a precipitous increase in new awards throughout the remainder of the 1980s.

C. Recent Experience

In the latter part of the 1980s, the agency experienced reductions in both work strength and authoritative funding. By the early 1990s, there existed a shortage of personnel needed to handle a significant increment in claims, also as to see review schedules. In an try to free up resources to process initial claims, the agency sharply curbed the review of existing beneficiaries. Kickoff in 1994, growth in initial claims began to level-off and once again attention shifted to performing mandated reviews. Congress enacted the Contract With America Advancement Deed of 1996 (Public Law 104-121), which included a provision authorizing the appropriation of special funds to be used exclusively to conduct boosted CDRs. Every bit a result, an expanded plan was developed to work down the existing CDR backlog by 2002, and stay upward-to-appointment with CDRs maturing thereafter.

Table v shows the historical number of terminations and gross termination rates for disabled workers , by reason for decrement. About terminations occur as a result of decease or conversion. Recovery is the most volatile termination category, being subject field to many exterior variables as previously mentioned. The fasten in recoveries in 1997 is a issue of the provision of Public Police 104-121 to eliminate drug addicts and alcoholics from the DI rolls. "Other" is a relatively pocket-size category mostly comprised of individuals who switch to quondam-age benefits prior to normal retirement age. Termination categories are depicted in figure 3.

Effigy 3.--DI Disabled Worker Terminations past Reason, Calendar Years 1975-1998

(In thousands)

As mentioned, decease and conversion account for most of the terminations that occur, and the general trend in termination rates has been a failing ane. Figure 4 shows the total termination rates for disabled workers. Two meaning trends in the DI rolls accept developed over the years which aid explain the decline: falling death rates and a reduction in the boilerplate age of beneficiaries.

Over the catamenia 1975-1995, the average age among disabled workers steadily declined from 53.5 years to 49.7 years for males, and from 54.4 years to 49.9 years for females. During the aforementioned time flow, the fraction of 30-44 year olds on the male DI rolls roughly doubled from fourteen per centum to 27 percentage; amid females, the fraction more than than doubled from roughly eleven pct to 26 percent. The increase in younger and physically healthier beneficiaries is largely attributable to the increasing proportion of new awards due to mental impairments. The outcome is an increasingly smaller percentage of beneficiaries converting to one-time-historic period benefits each year, too as fewer deaths.

Effigy four.--DI Disabled Worker Termination Rates by Reason, Calendar Years 1975-1998

(Per chiliad exposed)

Although medical advancement has significantly contributed to longer life expectancies among the full general population, the touch on on a disabled life is less clear. Fairly consistent expiry rates within the DI rolls is shown for the period 1977-1993, as gross rates range between 49-54 deaths per yard disabled males, and 34-twoscore deaths per thousand disabled females. A noticeable decline in the expiry rate after 1995, especially amidst males, is due in part to the rapidly diminishing affect of HIV-related impairments and the elimination of drug-habit and alcoholism every bit material causes for disability. Other meaning trends leading to mortality improvement inside the DI rolls include: connected increases in mental impairments--especially amongst females; and a rising number of awards to older workers, whose determinations are based on a set of vocational factors rather than a unmarried severe inability.

D. Termination Written report past Select Age and Duration

Table 7A, table 8A, and tabular array 9A illustrate select-and-ultimate death, recovery, and total termination probabilities, respectively, for male DI disabled workers. Data is tabulated by entitlement historic period and duration, based on actual termination experience of the DI rolls from January 1, 1991 through December 31, 1995. Table 7B, tabular array 8B, and
table 9B illustrate similar probabilities for females. The underlying methodology used in tabular array construction and graduation is detailed in the appendix.

Mortality amongst disabled workers generally exhibits a rapid increase with select (entitlement) age. For any given select age, the highest probability of death generally occurs inside the earlier durations. Expiry probabilities tend to level off sometime around the fifth or sixth duration for males, and the tertiary or fourth duration for females. For older select ages, mortality is lowest at these durations before trending up in the later durations as general demographic factors such every bit age of the beneficiary brainstorm to have an increasing consequence. Greater consideration given to vocational factors, especially after age fifty, may cause a slight decline in bloodshed. In general, female disability mortality is lower than that for males every bit is the case in the general population. Several unique circumstances that were encountered in the data that may affect mortality estimates (such as expiry within the waiting catamenia and the option to switch to old-historic period benefits prior to normal retirement age) are discussed in the appendix.

For a given elapsing, recovery among disabled workers is noticeably skewed, in that the highest probabilities are exhibited amid the younger select ages. For a given select historic period, recoveries show a noticeable bimodal distribution; both male and female recoveries tend to elevation at the first elapsing before failing in the second and third durations, then summit again in the quaternary and fifth durations, failing thereafter. The fact that CDR schedules are based on the likelihood of medical improvement helps to explain this pattern. When improvement is expected, reviews are scheduled anywhere from 6 to 24 months post-obit the most recent disability decision--this accounts for the showtime peak in recoveries. For cases in which medical improvement is possible merely less likely to occur within the first ii years, reviews are scheduled every 36 months--this accounts for the 2nd peak. If medical improvement is not expected, reviews are scheduled every 5 to 7 years.

The select-and-ultimate life tables reverberate either the probability of termination due to decease only (table 10A, table 10B and table 10C), or expiry and recovery combined (table 11A, table 11B and tabular array 11C). For attained ages beyond the select-and-ultimate catamenia, probabilities are extended via blending to the general population mortality for 1995. The reader is referred to the appendix for details.

Table 12A, table 12B and table 12C show the average future lifetime of a DI disabled worker equally of attained age. Every bit with the general population, disabled females display a higher future lifetime than males. Information technology is worth noting that within the aforementioned gender, the ratio of disability mortality to general population bloodshed was establish to exist greater among females than among males. Also, a DI beneficiary exhibits a shorter life expectancy in the get-go year of entitlement than in the second or third, and frequently quaternary or fifth year of entitlement. This is due to a high mortality rate within the first several years of disability. The longer the private remains on the rolls, the greater the chance of disability continuation or a non-expiry termination.

Table 13A and tabular array 13B illustrate the average amount of time spent on the DI rolls as of the beneficiary's attained age. The expected time on the rolls for females is consistently higher than males, due in large office to lower female person disability mortality. The times shown are based on the duration of disability entitlement prior to termination due to death, recovery, or attainment of historic period 65.

Table 14A, table 14B and table 14C illustrate the average corporeality of time spent on the combined OASI and DI rolls as of the casher's attained age. The times shown are based on the duration of disability entitlement prior to termination due to death, recovery, or attainment of age 65, combined with the duration of one-time-age entitlement prior to decease later on attainment of age 65.

Tables 15A-18D evidence the present value of a stream of payments to a disabled worker by select historic period at entitlement for various interest rates. Almanac or monthly payments of $i payable at the get-go of the period (annuity-due) or finish of the catamenia (annuity-immediate) are made starting at entitlement. Receipt of payment is contingent upon survival to the next payment date. Notation that "survival" refers to the probability of avoiding decrement, which may include not recovering also as non dying. Payments are discounted to the beginning of entitlement using the stated annual effective interest charge per unit and the various survivorship assumptions exhibited in the life tables. Table 15A, table 15B, tabular array 15C, table 15D, table 16A, table 16B, table 16C and table 16D exhibit the average value of a life annuity payable until death of the disabled private, for males and females respectively. These values are based on the survivorship experience shown in tables 10A-10C, which reflect the probability of termination due to death only. Table 17A, table 17B, tabular array 17C, table 17D, tabular array 18A, tabular array 18B, table 18C and table 18D exhibit the average value of a life annuity to age 65 payable until death, recovery, or attainment of age 65 of the disabled individual, for males and females respectively. These values are based on the survivorship experience shown in tables 11A-11C, which reflect the probability of termination due to death and recovery combined.

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^x Reasons for termination in this category include: beneficiary switches to old-age benefits prior to normal retirement age; withdrawal of application; or erroneous entitlement.

¹¹ Benefits may go along if the individual is currently enrolled in a vocational rehabilitation program, or has entered an extended catamenia of eligibility.

¹² The moratorium practical to all cases on which an administrative or judicial appeal was pending on or after June 7, 1983. All persons claiming benefits based on mental impairment inability who received an unfavorable determination after March ane, 1981 were permitted to reapply within time constraints, equally mandated in 1984 by Public Law 98-460.

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July thirty, 1999

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Source: https://www.ssa.gov/OACT/NOTES/AS114/as114_IV.html

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