WASHINGTON (AP) — Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs.
The stampede for benefits is adding to a growing backlog of applicants — many wait two years or more before their cases are resolved — and worsening the financial problems of a program that's been running in the red for years.
New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry, too, leaving it unable to pay full benefits as well.
Much of the focus in Washington has been on fixing Social Security's retirement system. Proposals range from raising the retirement age to means-testing benefits for wealthy retirees. But the disability system is in much worse shape and its problems defy easy solutions.
The trustees who oversee Social Security are urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. If Congress does not act, the disability program will collect only enough payroll taxes to pay about 85 percent of benefits after the trust fund is exhausted in 2017.
Even if Congress does act, the combined retirement and disability trust funds are projected to run out of money in 2036, the trustees say. The new congressional report estimates the combined fund would run out of money in 2038. At that point, the combined programs would collect enough in payroll taxes to pay about three-fourths of benefits.
Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.
"It's primarily economic desperation," Social Security Commissioner Michael Astrue said in an interview. "People on the margins who get bad news in terms of a layoff and have no other place to go and they take a shot at disability,"
The disability program is also being hit by an aging population — disability rates rise as people get older — as well as a system that encourages people to apply for more generous disability benefits rather than waiting until they qualify for retirement.
Retirees can get full Social Security benefits at age 66, a threshold gradually rising to 67. Early retirees can get reduced benefits at 62. However, if you qualify for disability, you can get full benefits, based on your work history, even before 62.
Also, people who qualify for Social Security disability automatically get Medicare after two years, even if they are younger than 65, the age when other retirees qualify for the government-run health insurance program.
Congress tried to rein in the disability program in the late 1970s by making it tougher to qualify. The number of people receiving benefits declined for a few years, even during a recession in the early 1980s. Congress, however, reversed course and loosened the criteria, and the rolls were growing again by 1984.
The disability program "got into trouble first because of liberalization of eligibility standards in the 1980s," said Charles Blahous, one of the public trustees who oversee Social Security. "Then it got another shove into bigger trouble during the recent recession."
Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.
As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don't deserve.
Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.
Congress is targeting overpayments.
The deficit reduction package enacted this month would allow Congress to boost Social Security's budget by about $4 billion over the next decade to invest in programs that identify people who no longer qualify for disability benefits. The Congressional Budget Office estimates that increased enforcement would save nearly $12 billion over the next decade.
At the same time, the application process can be a nightmare for legitimate applicants. About two-thirds of initial applications are rejected. Most of these people drop their claims, but for those willing go through an appeals process that can take two years or more, chances are good they eventually will get benefits.
Astrue has pledged to reduce processing times for applicants' appeals, and he has had some success, even as the number of claims skyrockets. The number of people waiting for decisions has increased, but their wait times are going down.
"It's ludicrous to say that the backlog problem is getting worse," Astrue said. "The backlog problem has gotten dramatically better."
Patricia L. Foster said she was working as a nurse in a hospital in Columbia, S.C., in 2005 when she was attacked by a patient who was suffering from a mental illness. Foster, 64, said she injured her neck so bad she had a plate inserted. She said she also suffers from post-traumatic stress disorder.
Foster was turned down twice for Social Security disability benefits before finally getting them in 2009, after hiring an Illinois-based company, Allsup, to represent her. She said she was awarded retroactive benefits, though the process was demeaning.
"I have to tell you, when you're told you cannot return to nursing because of your disability, you don't know how long I cried about that," Foster said. "And then Social Security says, 'Oh no, you don't qualify.' You don't know what that does to you emotionally. You have no idea."
The FY97 budget bill approved in July maintains Supplemental Security Income and Medicaid benefits for legal immigrants who were in the US on August 22, 1996, as well as legal immigrants present on August 22, 1996, and not getting SSI benefits, who become poor and disabled in the US. The bill also lengthens from five to seven years the eligibility of refugees for SSI and Medicaid benefits.Under the 1996 welfare law, SSI benefits for legal immigrants were to end on August 23, 1997, with exceptions for veterans and those with at least 40 quarters of US work. Under the compromise, the only legal immigrants ineligible for SSI are the non-disabled not in the US on August 22, 1996.SSI makes monthly payments of $484 to poor people who are 65 and older, and to those who are blind or disabled; many states supplement the federal payment. The cost of maintaining SSI eligibility is estimated to be $11.4 billion over five years, eliminating about half of the projected $24 billion savings expected from restricting immigrant access to federal welfare benefits.Maintaining SSI benefits for legal immigrants fulfills a promise made by President Clinton when he signed the welfare bill in 1996. Congress rejected the Clinton's proposal to pay benefits to legal immigrants who arrived after August 22, 1996 and later become disabled.In the San Francisco Bay area, agencies that help immigrants naturalize reported that naturalization applications began to drop "dramatically" when "elderly legal immigrants realized they no longer needed to become citizens to retain their eligibility for public benefits." Some agencies reported that immigrants began canceling appointments for INS assistance and dropping out of English classes and citizenship classes in May.The drop began May 2, when President Clinton vowed to maintain SSI benefits for most legal immigrants; some agencies reported that the Spanish-speaking media treated continued SSI benefits as a "done deal." In San Jose, naturalization applications fell from 3,900 per month to 2,000 in June 1997; in San Francisco, from 6,000 per month to 3,800 in June.About one million non-US citizens who currently receive Food Stamp benefits will be removed from the rolls by September 1, 1997. A USDA study estimated that about 16 percent of the immigrants receiving Food Stamps are children and another 16 percent are elderly. Many of the remaining immigrant recipients of Food Stamps are working poor.A New York federal judge in July upheld the constitutionality of the denial of benefits to legal immigrants under the new welfare law, rejecting claims that Section 402 of the new law improperly discriminates between citizens and permanent resident aliens in violation of the due process clause of the Fifth Amendment. New York City, which brought the suit, plans to appeal.The first academic studies of welfare usage among immigrants based on the March 1996 Current Population Survey are appearing. The March 1996 CPS reported 25 million foreign-born persons, including 6.6 million who entered since 1990 and 8.4 million who entered in the 1980s--60 percent of all immigrants entered since 1980. The 6.7 million Mexican-born immigrants outnumber the 1.2 million Filipino immigrants almost 6 to 1.David E. Hayes-Bautista of UCLA noted that 5.8 percent of all immigrants received cash welfare benefits in 1996, compared to 4.5 percent of US-born residents. Like other US residents, immigrants must satisfy income, asset and other tests to obtain welfare benefits, and they must also satisfy legal status requirements. Thus, poor Mexican and Central American immigrants are less likely to obtain cash assistance than US natives or poor Filipinos, Vietnamese and Cubans, but it is not clear whether a higher proportion of Mexicans and Central Americans are eligible on income grounds and do not apply, or whether they are not eligible because more of them are unauthorized.States. The states are required by the new welfare law to revise their welfare laws. About a third of the nation's 11 million welfare cases are in California (2.4 million) or New York (one million). In July, these states had neither state budgets nor new welfare laws in place, although a compromise seemed at hand in California at the end of July.As the Democratic-controlled California State Legislature negotiated with Governor Wilson after the July 1, 1997 deadline for a new $68 billion state budget for 1997-98, continued state aid for legal immigrants became a major issue separating the parties. Democrats ran ads in English and Spanish that attacked Wilson for not maintaining welfare benefits for legal immigrants with state funds.Democrats wanted $124 million to continue SSI and Food Stamp benefits for legal immigrants; Food Stamps are worth an average of $193 per month, and SSI $659 a month in California. According to Democrats, six states have enacted state-funded programs to provide Food Stamps to needy legal immigrants, although most states have not developed substitute state-run Food Stamp programs. Republicans opposed state-funded programs for poor legal immigrants.About 287,000 of the one million SSI recipients in California are legal immigrants and 77,000 are expected to qualify for one of the exemptions in federal law. Another 170,000 legal immigrants receiving SSI in California are expected to become naturalized US citizens. Finally, 30,000 of the remaining 40,000 are expected to qualify for continued SSI payments as disabled, leaving 10,000 current SSI recipients who will be removed from federal rolls, according to Republicans, or 30,000, according to Democrats.Some 365,000 legal immigrants in California receive Food Stamps. Governor Wilson expects 300,000 to qualify for continued Food Stamps because they naturalized or qualify for an exemption; the Democrats expect 250,000 to qualify for continued benefits.The August 1996 welfare law gives states the option of denying legal non-US citizens Medi-Cal health assistance and cash payments under the Aid to Families with Dependent Children, AFDC, or successor programs. Both Democrats and Republicans in California plan to continue these health care and cash assistance benefits if the recipient was in the US before August 22, 1996.In February 1997, about $1 billion was spent providing AFDC, SSI and General Relief to 3.7 million recipients in California; including $488 million for 2.5 million AFDC recipients, $459 million for one million SSI recipients and $30 million for 142,000 General Relief recipients.In New York, state legislators on July 29 reportedly reached agreement to provide state-funded food stamp benefits to some of the state's 150,000 legal immigrants who will lose them on September 1, 1997. The $50 million to $110 million annual cost would be shared by the state and counties, with counties having the option of not participating. New York was supposed to adopt its $68 billion budget for 1997-98 by April 1.Maryland has 412,000 foreign-born residents, 25 percent from Europe. The state has agreed to provide Temporary Cash Assistance to otherwise eligible legal immigrants who have lived in Maryland one year or more, or moved to Maryland from a state that provides cash assistance to legal immigrants. Maryland also agreed to provide Food Stamp benefits to poor immigrant children under 18 and medical care to poor pregnant immigrant women and poor immigrant children.General. Despite the July 1997 amendments, the basic elements of the August 1996 welfare law remain intact. Poor residents are no longer entitled to assistance. States will design and operate their own welfare systems. Welfare recipients are limited to five years of benefits and most adult recipients must be engaged in work or work-related activity within two years of obtaining benefits.Restoring SSI eligibility for legal immigrants and a $24 billion program over five years that extend Medicaid health assistance to half the nation's 10 million children who lack health-care coverage, were considered major steps to soften the 1996 welfare law.The number of welfare recipients throughout the US fell in 48 of 50 states, by 1.2 million, between August 1996 and June 1997.
S.F. food banks struggle with major funding cuts
Saturday, August 20, 2011
Hundreds of people form a line snaking down the side of the building, many having arrived hours before. They're assigned numbers to ensure there's some semblance of order after fights began breaking out in line many months ago.
Once it's finally their turn, the mostly elderly people eagerly claim their prize: a bag of bread and some fruit and vegetables. It's the weekly, sometimes desperate handout at Hosanna Celebration Center, a Castro district church that disburses food from the San Francisco Food Bank each Tuesday at noon.
But under new criteria set by the national Emergency Food and Shelter Program, scenes like this, which play out daily in San Francisco, aren't enough to merit federal financial help. The city simply doesn't have enough poor or unemployed people to qualify, and it has just learned it will lose out on $592,000 in federal money that helps fund the food bank and other social service programs.
Funding for the national program was cut 40 percent by Congress in this year's budget - from $200 million to $120 million. For the first time in the program's 28-year existence, San Francisco won't get any of that money.
This year, a county qualifies for assistance if it or a city within it has at least a 14.4 percent poverty rate or an 11.5 percent unemployment rate. San Francisco's rates are 11.3 and 9 percent respectively. While neighborhoods within the city would qualify, San Francisco doesn't get any money - though wealthier counties with one poor city inside them do.
The San Francisco Food Bank is losing $161,000, enough to pay for 483,000 meals this year. To Paul Ash, executive director of the food bank, it's simply not fair.
"Not only was the high cost of living in San Francisco not taken into consideration, but San Francisco is being penalized for being a city and county while other counties like San Mateo with lower poverty and unemployment rates will receive their full amount of funding," he said.
The Emergency Food and Shelter Program was created in 1983 and has handed out $3.7 billion since its inception. It is governed by a national board with members from social service agencies including the American Red Cross, the Salvation Army and the United Way. It is chaired by a representative from the Federal Emergency Management Agency, which oversees it.
This year, the program will fund food and shelter programs in 1,600 cities and counties, but 500 that received money last year are entirely out of luck.
Laura Escobar is the director of safety net programs for United Way Bay Area, which administers the national money and gives it to local agencies. She said San Francisco is now doing too well economically compared with other communities to qualify. It has been on the cusp of not qualifying for years, she said.
Escobar said the cuts as a whole are "terrible" and come as food prices and operational costs are increasing.
"We're dialing back so much in supporting all the shelters and food banks Bay Area-wide," she said. "It's death by a thousand cuts."
But she said she has little hope for the money being restored by Congress next year, considering the clamor to rein in national spending.
The cuts come as the San Francisco Food Bank is already seeing increased demand because of lingering economic problems. It fed 225,000 people in the fiscal year 2010-11, up from 132,000 in 2007-08. Its food pantry lines are expected to grow even longer because of the state's cuts to CalWORKS, which provides cash assistance to low-income families, and a host of other social service programs on the chopping block at the state and federal levels.
"The food bank is left to pick up the pieces," said Sean Brooks, director of programs for the food bank.
Dan Selman, pastor of Hosanna Celebration Center, said that five years ago, its food pantry served 85 people. Now, the line often has 350 people. Most of them are elderly people living on fixed incomes, and their dollars just don't stretch very far. Selman goes to the food bank's headquarters every Monday to get food for the Tuesday pantry but has already found the shelves with less stock.
"It's been increasingly hard," he said. "Cereal and bread are harder to come by. They're saying 'Get ready, because it's not going to bounce right back.' "
Many people implored Selman to let them inside right away where tables of bread and bins of tomatoes, nectarines, squash and carrots awaited. But he tried to keep the line in order.
Carmelita Fang, 64, was eager to get inside. The retiree began coming to the food pantry a year ago after her grocery bill kept spiraling up.
"I use it every week," she said. "We get two loaves of bread every week, but that's not good enough for my family. But it's better to come here than Safeway.
"It's a big help."E-mail Heather Knight at email@example.com