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Social Security Backlog Update

In the third quarter of 2009, the Social Security Administration (SSA) was “pleased” to announce that average processing time for a disability case was 495 days. SSA has specifically targeted case that were 850 days or older. As of June, 2009, these types of cases still numbered 166,000. To address chronic understaffing and dramatic rise in claim filings, the government has infused $500M as part of the federal stimulus program in addition to $126.5M in additional budget appropriation for this fiscal year. As Social Security Administration Commissioner Michael Astrue has explained:

    Workloads have gone up, resources did not go up proportionately, and the agency was too slow to embrace new technologies….The long waits aren’t acceptable, but it’s not something you can fix overnight.

With the additional funding, SSA has reduced the backlog for the first time as of September, 2009. Although the pending hearing backlog has only been reduced by 37,000 cases (from 760,813 to 722,822), it is a start in the right direction. Obviously, great strides remain to be achieved so as to get assistance to those in need who have been made to wait for extraordinarily long times in their efforts to receive disability benefits. To this end, SSA plans to hire an additional 850 support staff and 226 administrative law judges in Fiscal Year 2010.

Adding to the burden is the private insurance industry who mandates that persons receiving disability benefits from their companies apply for Social Security Disability (SSD) benefits, whether they are qualified to receive benefits or not. The insurance companies seek to reduce the benefits paid out under their contracts via offset provisions which reduce their payments by any SSD received by claimants. This added volume only serves to create additional backlogs in the already overwhelmed claims process.

Such filings have become economically necessarily for the disability insurance companies given that 42M Americans (1/3 of the full-time workforce and 40% of white collar workers) have enrolled in disability insurance through their employers. The same increase in claims being experienced by SSA are affecting the disability insurance industry as well. The difference between SSA and private insurers is that the insurers are a profit industry and will use any means necessary to reduce claims via denial, termination, or offset in order to enhance their bottom line.

Unfortunately, for the many hundreds of thousands of persons waiting to get their disability benefits, the paltry $1,063/month average monthly benefit is of very limited help. For those with private disability coverage, additional legal fights can be expected to recover these much needed benefits.

And, if this is not bad enough, SSA is being further stressed by the flurry of early retirement claim filings caused by the recessionary economy as workers are being laid off or forced to retire earlier than they would prefer. From October, 2008 to July, 2009, 2.2M people applied for retirement benefits as compared to only 1.8M in the same time period the previous year. With the poor economic predictions for the near future, this trend should only continue to stress SSA’s abilities to process claims.

Posted in Social Security Disability Benefits | Tagged , , , |


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