The New York Times Business section, of all places, has a pretty good analysis of how Social Security private accounts might affect disability beneficiaries. The author makes some interesting observational. If the disability benefits are preserved at their present levels while everyone else is shifted to private accounts, then disability benefits might look more attractive to people who don’t get good returns on their private accounts, prompting more people to apply for disability benefits. The disability determination process is notoriously inconsistent, so who’s to say what someone’s odds are of being found disabled?
The author also makes this troubling conclusion: “From all appearances, disability beneficiaries are indeed a group largely incapable of substantial gainful employment, at least in the current labor market.” I can’t dispute the evidence he cites. But he doesn’t delve deeper into why this is so. Despite some measure of reform, disability benefits are still structured to discourage employment. To begin collecting SSDI benefits, you must be unable to work to any significant degree. And once you are receiving benefits, you can’t earn any more than $830/month or you will go over the “cliff” and your cash benefits will be reduced to zero. This puts many people in the untenable position of choosing between work and the sudden and complete loss of benefits. The author seems to think that people with disabilities can’t work because they’re disabled. This circular reasoning, which sounds nice and pat, ignores the systemic barriers regarding employment and disability.
