The Bleak Future of Social Security Disability Benefits
by Thomas Lloyd

Think you can depend on social security for a disability benefit? If so, I have some Enron stock to sell you.

The worsening state of affairs at the chronically under funded Social Security Administration (SSA) should draw legitimate concern for any American who thinks they can depend on sufficient disability protection from their government. As outlined in a recent New York Times article by Erik Eckholm*, hundreds of thousands of disabled applicants have been waiting for as long as three years on a decision about whether their disability and or sickness claim would qualify for a benefit. The back-log of waiting applicants now has increased to 755,000 from 311,000 since 2000 and of the nearly 2.5 million disability applicants each year, about two-thirds are initially rejected by state agencies. With the number of claims steadily increasing each year and the SSA’s lack of financial backing to keep pace, this issue appears to be getting worse not better.

The first item all individuals should understand about how the SSA pays a benefit - its definition of disability.

The definition for disability in social security is very limited – otherwise known as a gainful occupation definition. Translated, this means that in order to qualify for a benefit, your disability would need to prevent you from working in ‘any occupation’, not just your specific occupation, for a period of at least 12 months. Many assume social security will provide them own-occupation protection but sadly, this is simply not the case.

One heart-breaking example discussed in Erik Eckholm’s article centers around a forty-four year old applicant from Fayetteville, N.C. who has been waiting three long years for a decision on her benefit. She cannot work, has emphysema, sleep apnea, and requires an oxygen tank 24 hours a day. Throughout this period while she waits her appeal, she has lost her apartment and has been forced to sleep at her daughter’s house or a friend’s place.

Such examples illustrate the clear importance of establishing your own individual disability income policy, especially one that provides pure own-occupation protection to age 65. At the very least, you should have a modified own-occupation definition contract. Either of these definitions will deem you disabled if you cannot work in your specific occupation – not just any occupation.

Establishing your own form of disability protection is paramount in today’s workplace whether it’s supplementing a group disability plan with your employer or completely on your own. Keeping some form of protection may help prevent you from being completely dependant on social security if the unfortunate need arises.

* "Disability Cases Last Longer as Backlog Rises" New York Times 10 Dec. 1997


Disability income products underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America (Guardian), New York, NY, or provided by Guardian. It is offered for the purpose of education and information only and is not intended to constitute tax or legal advice. For information on your specific situation, please consult your personal legal or tax advisor. Product provisions and features may vary from state to state. Please consult with the Social Security Administration for additional details concerning its eligibility criteria for disability benefits.