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Are the Unemployed Really Using Disability Benefits as a Bailout?

By Kenton Koszdin Law Office on February 10, 2014 | In Social Security Disability

It seems like every other day a politician or a pundit is claiming in convenient sound bites that the rising number of Americans receiving Social Security Disability Insurance (SSDI) Benefits is due to the unemployed of our nation taking advantage of the system and using SSDI as de facto unemployment benefits.

Following that logic, with long-term unemployment benefits now lapsed and in the grips of a power struggle on Capitol Hill, it would naturally follow that there would be another large spike in those who are trying to claim SSDI benefits.

Think again.

While the current status of SSDI seems to be that of a handy political punching bag, a recent working paper from the National Bureau of Economic Research (NBER) has refuted that American workers go on disability after their unemployment benefits expire.

The paper, authored by three economists, looked at whether workers are indeed looking to SSDI as a long-term safety net when their unemployment benefits expire. The answer seems to be a resounding “No.”

The economists found that as different states pared back their unemployment benefits during different times in the latest economic downturn, applications for SSDI benefits actually fell.

In a previous study, one of the economists who co-authored the recent NBER paper found that applications for SSDI actually fell across the U.S. as unemployment benefits became more generous. The suggestion is obvious: the nation’s unemployed are not using SSDI as a bailout.

So, why are the ranks of those receiving federal disability benefits rising?

It may be a simple matter of demographics. The Baby Boomer generation is aging and as they age, disabilities become more prevalent. Also, the eligible workforce has expanded as more women have entered the labor ranks over the years.

There should be no stigma attached to applying for SSDI benefits if you deserve them. If you are disabled and can no longer work, call the Kenton Koszdin Law Office in Los Angeles toll-free at (800) 438-7734 or contact us online today. We can guide you through the process to see that you receive the benefits you deserve.

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