Income at Risk: Unemployment Slows For Some, But Not People with Disabilities, Allsup Finds

Rising Social Security disability applications begin to stabilize; financial strains continue for many people with disabilities and their families

Belleville, Ill. – April 20, 2011 – During first quarter 2011, the unemployment rate for people with disabilities continued to significantly outpace the unemployment rate for other workers, according to the quarterly Allsup Disability Study: Income at Risk.Allsup is a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare services.

The Allsup study shows people with disabilities experienced an unemployment rate approximately 60 percent higher than people with no disabilities for the first quarter 2011. Specifically, the unemployment rate for the first quarter averaged 14.9 percent for people with disabilities, compared to 9.3 percent for others, according to non-seasonally adjusted data from the U.S. Bureau of Labor Statistics (BLS).

Since the BLS began reporting unemployment rates for people with disabilities nearly three years ago, the lowest unemployment rate reported for people with disabilities was 11.1 percent, recorded in November 2008. In comparison, the highest unemployment rate for people with no disabilities during this time period topped out at 10.4 percent in January 2010.

“People with disabilities often face a significantly greater challenge in locating and maintaining employment,” said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. “Their health conditions may make it difficult to continue working for extended periods of time, causing them to come in and out of the job market. As their conditions worsen, ultimately, hundreds of thousands find it is impossible to return to the work force.”

The BLS also reported that 45.5 percent of those individuals unemployed in March had been jobless for 27 weeks or more. This compares to 44 percent who had been jobless for 27 weeks or more during March 2010.

Number of New SSDI Claims Begins to Stabilize

The Allsup Disability Study: Income at Risk also shows that during first quarter 2011, the number of people with disabilities unable to work and applying for SSDI increased to 720,119, up just 1 percent compared with first quarter 2010. An estimated 1.8 million SSDI claims are pending in the Social Security review process with an average cumulative wait time of more than 880 days.

“It’s not easy to apply for Social Security disability benefits and many people experience significant financial hardship, including bankruptcy and foreclosure, while waiting years to receive their SSDI benefits,” Gada said.

Knowing if and when to apply for SSDI benefits are two important and complex decisions facing people with serious health conditions. “People with disabilities often wait longer than they should because they don’t understand the guidelines and their eligibility, and they haven’t sought the professional representation that could get them their benefits more quickly,” Gada said. “This can prolong their wait for the income provided by SSDI and add to their financial burdens.”

On the flipside, other individuals may be applying for Social Security benefits without meeting the guidelines. This further contributes to the delay experienced by those who do qualify for benefits.

SSDI Guidelines and Process

Generally, applicants are considered disabled by the Social Security Administration if:

• They cannot do the work they did previously;
• They cannot do any 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. Studies show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement, according to the Social Security Administration. However, only a small percentage of people with disabilities qualify for SSDI.

Gada noted that the SSDI guidelines are intentionally stringent and the application process requires an extensive amount of paperwork. This includes completing an initial disability insurance application and, in most instances, a detailed activities of daily living questionnaire. Information is needed 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.

“SSDI is intended to be a financial safety net for people who have paid into the system and have serious, long-lasting disabilities that prevent them from working. For these individuals, it truly is a lifeline, providing monthly benefits as well as earlier access to Medicare and protection for their retirement income,” Gada said.

Individuals uncertain of their eligibility for disability insurance benefits can contact the Allsup Disability Evaluation Center at (800) 279-4357 for a free evaluation.

Allsup also provides free financial resources and tools to help people with disabilities better manage their finances while awaiting SSDI benefits. This includes information on establishing a budget, managing debt and healthcare costs, and learning about resources to better address financial issues such as bankruptcy and foreclosure. These resources are available online at MyFinances.Allsup.com.

ABOUT ALLSUP
Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs nearly 800 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis. For more information, visit www.Allsup.com.

The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.

Editor’s Note: Details on the first quarter 2011 Allsup Disability Study: Income at Risk are available at http://www.allsup.com/Portals/4/allsup-study-income-at-risk-q1-11.pdf