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80 Soc. Sec. Bull. 25 (2020)
The Benefit Receipt Patterns and Labor Market Experiences of Older Workers Who Were Denied Social Security Disability Insurance Benefits on the Basis of Work Capacity

handle is hein.journals/ssbul80 and id is 103 raw text is: 









THE BENEFIT RECEIPT PATTERNS AND LABOR MARKET

EXPERIENCES OF OLDER WORKERS WHO WERE DENIED

SOCIAL SECURITY DISABILITY INSURANCE BENEFITS ON THE

BASIS OF WORK CAPACITY

by Jody Schimmel   Hyde, April Yanyuan   Wu, and  Lakhpreet Gill*


This article examines the experiences of Social Security Disability Insurance (DI) applicants aged 51 or older
who were initially denied benefits because the disability examiner determined that they could perform either
their past work or other work. We use Health and Retirement Study survey data linked to administrative data
on benefit application and receipt and earnings from the Social Security Administration. We find that few older
DI applicants who were denied benefits on this basis resumed work at a substantial level following denial. More
commonly, applicants denied at this stage continued to pursue benefits, often successfully. Nearly two-thirds of
initial work capacity-related denials were ultimately allowed DI benefits after appealing the initial decision or
reapplying, and our estimates suggest that many of the rest claimed Old-Age and Survivors Insurance benefits
before they reached full retirement age.


Introduction
As workers approach retirement, they are more likely
to experience a health condition that could limit
their ability to remain employed. Among individuals
aged 51 to 55 in 1992, one-quarter reported experi-
encing a health condition that, by age 62, had limited
their ability to work at least once (Johnson, Mermin,
and Murphy  2007). A worker becomes eligible for
unreduced Old-Age and Survivors Insurance (OASI)
benefits, commonly known as Social Security retire-
ment benefits, on reaching his or her full retirement age
(FRA:  65 to 67, depending on year of birth). If a new
health condition significantly affects a worker's ability
to remain in the labor force, and the worker has not
yet reached FRA, he or she may be eligible for Social
Security Disability Insurance (DI) benefits. Alter-
natively, a worker who has reached age 62 (but not
FRA)  may decide to claim actuarially reduced OASI
benefits. Early (pre-FRA) OASI claiming reduces a
monthly benefit by as much as 30 percent (if claimed at


age 62 by a worker whose FRA is 67).1 When work-
ers claim early OASI retirement benefits, the Social
Security Administration (SSA) asks them whether they
have experienced a health condition, injury, or illness
in the past 14 months that left them unable to work.
When  applicants report any such experience, SSA
considers their eligibility for DI benefits. Doing so is
relatively costless for those who have already stopped
working, and if DI benefits are awarded, the applicant
will receive a higher monthly retirement benefit upon


* The authors are with Mathematica. Jody Schimmel Hyde is a senior researcher, April Yanyuan Wu is a researcher, and Lakhpreet Gill
is a systems analyst.
Note: The research reported herein was performed pursuant to an SSA grant (no. 1-DR C2000001-O-00) and was funded as part of the Dis-
ability Research Consortium. Contents of this publication are not copyrighted; any items may be reprinted, but citation of the Social Security
Bulletin as the source is requested. The Bulletin is available on the web athttps: iiww.ssa.gov/policy/docs/ssb/ The findings and conclusions
presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration.


Social Security Bulletin, Vol. 80, No. 2, 2020


25

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