![handle is hein.congrec/cbo10561 and id is 1 raw text is: CONOMIC AND BUDGET ISSUE BRIEF
A series ofissue summaries from
the Congressional Budget Off e
the CJULY 22, 2010
Social Security Disability Insurance:
Participation Trends and Their Fiscal Implications
The Social Security Disability Insurance (DI) program
pays cash benefits to nonelderly adults (those younger
than age 66) who are judged to be unable to perform
substantial work because of a disability but who have
worked in the past; the program also pays benefits to
some of those adults' dependents. In 2009, the Disability
Insurance program paid benefits to almost 8 million dis-
abled beneficiaries and about 2 million of those beneficia-
ries' spouses and children.1
Between 1970 and 2009, the number of people receiving
DI benefits more than tripled, from 2.7 million to
9.7 million.2 That jump, which significantly outpaced
the increase in the working-age population during that
period, is attributable to several changes-in characteris-
tics of that population, in federal policy, and in opportu-
nities for employment. In addition, during those years,
the average inflation-adjusted cost per person receiving
DI benefits rose from about $6,900 to about $12,800 (in
2010 dollars). As a result, inflation-adjusted expenditures
for the DI program, including administrative costs,
increased nearly sevenfold between 1970 and 2009,
climbing from $18 billion to $124 billion (in 2010 dol-
lars).3 Most DI beneficiaries, after a two-year waiting
period, are also eligible for Medicare; the cost of those
benefits in fiscal year 2009 totaled about $70 billion.
Under current law, the DI program is not financially sus-
tainable. Its expenditures are drawn from the Disability
Insurance Trust Fund, which is financed primarily
through a payroll tax of 1.8 percent; the fund had a
1. In this brief, the term disabled beneficiaries refers to people with
disabilities who are receiving benefits from the DI program as a
result of their own disability and whose DI benefits are calculated
on the basis of their work history. (Such beneficiaries are also
referred to as disabled worker beneficiaries, disabled workers,
or disabled insured beneficiaries.)
2. Unless otherwise specified, all years are calendar years.
balance of $204 billion at the end of 2009. The Congres-
sional Budget Office (CBO) projects that by 2015, the
number of people receiving DI benefits will increase
to 11.4 million and total expenditures will climb to
$147 billion (in 2010 dollars; see Figure 1). However,
tax receipts credited to the DI trust fund will be about
20 percent less than those expenditures, and three years
later, in 2018, the trust fund will be exhausted, according
to CBO's estimates. Without legislative action to reduce
the DI program's outlays, increase its dedicated federal
revenues, or transfer other federal funds to it, the Social
Security Administration (SSA) will not have the legal
authority to pay full DI benefits beyond that point.4
A number of changes could be implemented to address
the trust fund's projected exhaustion. Some would
increase revenues dedicated to the program; others would
reduce outlays. One approach to reducing expenditures
on DI benefits would be to establish policies that would
make work a more viable option for people with dis-
abilities. However, little evidence is available on the
effectiveness of such policies, and their costs might more
than offset any savings from reductions in DI benefits.
3. Supplemental Security Income (SSI) is the other major federal
program that provides cash benefits to people with disabilities; it
serves only those people with disabilities who have low income
and few assets. In fiscal year 2009, SSI outlays totaled $45 billion,
of which about 90 percent went to people who were disabled,
including children and elderly people. About 16 percent of dis-
abled beneficiaries also receive SSI benefits. [For information
about SSI as well as additional background on the DI program,
see Congressional Research Service, Primer on Disability Benefits:
Social Security Disability Insurance (SSDI) and Supplemental Secu-
rity Income (SSI), CRS Report for Congress RL32279, February 2,
2010.] In addition, disabled veterans and people with work-
related injuries and disabilities receive benefits through two
smaller programs.
4. For further discussion of Social Security's financing and trust
funds, see Congressional Budget Office, Social Security Policy
Options (July 2010), pp. 3-5.](ViewImageLocal?handle=hein.congrec/cbo10561&div=1&collection=&method=preview&ext=.png&size=3)
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