Assesses the potential impact of federal policy on work incentives for adults with disabilities in their sixties and late fifties, focusing on Social Security Disability Insurance (SSDI).
"This review of federal policy toward older workers with disabilities highlights the work disincentives built into the SSDI system. For example, SSDI does not pay benefits or provide rehabilitation services until workers are fully disabled, by which time intervention is often too late to promote employment. Because partial benefits are unavailable, SSDI beneficiaries risk losing all cash benefits (and eventually Medicare coverage) by earning just a dollar more than the earnings limit, reducing the use of SSDI work supports. Rules governing Social Security retirement, Medicare, and phased retirement also discourage employment by older adults with disabilities" (p.2). (Abstractor: Author)

Major Findings & Recommendations

• Employment rates for older workers with disabilities are low and have been falling. Certain provisions in the SSDI system appear to discourage work by older adults with disabilities. SSDI pays benefits only to workers who are fully disabled and have not been gainfully employed for at least five months. • Several policy challenges would promote employment by older adults with disabilities. SSDI offers a number of possibilities. The system could be overhauled to emphasize getting beneficiaries back to work, instead of serving primarily as an income support program. This change in focus would require opening the program to workers with partial disabilities, instead of restricting it to those unable to engage in substantial gainful employment. This expansion would promote early intervention for workers with health problems, which has been shown to help get them back to work. Workers would no longer be forced to wait until their health problems had become severely disabling before they could receive help. Early intervention also means eliminating the five- month waiting period for SSDI. Additionally, the program could require all beneficiaries to receive vocational rehabilitation, as in many European countries. • SSDI reforms short of overhauling the system could also promote work among older adults with disabilities. For example, changes to the Ticket to Work program could lead more beneficiaries to obtain rehabilitation services. • Changes to Social Security retirement and Medicare could also boost employment by older adults with disabilities. For example, policymakers could extend the delayed retirement credit beyond age 70 (the current limit), thus increasing the reward from working at older ages. Eliminating the retirement earnings test before the Full Retirement Age could stimulate employment in workers’ early sixties, because early Social Security beneficiaries would no longer believe that they were being taxed by working. • Regulatory changes that remove obstacles to formal phased retirement programs could promote work at older ages. For example, policymakers could relax anti-discrimination rules that make it difficult for employers to selectively offer phased retirement programs to certain groups of workers" (p.16-17). (Abstractor: Author)