Although the global economic crash of 2008 is now five years behind us, our economy has not fully recovered. Unemployment is still over seven percent, and wages are stagnant.
At the same time, applications and awards for federal Social Security disability benefits have gone up. This combination has led some to wonder whether Americans are trying to “game the system” by obtaining disability benefits instead of looking for work. Avik Roy, a blogger for Forbes, calls the Social Security system the “disability-industrial complex” and claims that “many able-bodied Americans have been granted government paychecks for life, crowding out our ability to direct needed resources to the genuinely infirm.”
However, recent research shows that these concerns are unfounded. Jesse Rothstein, a professor at the University of California at Berkeley, had a theory. He researched government benefit data to see if applications for Social Security disability benefits increased at the same time unemployment benefits ended. If true, this might suggest that able-bodied working people were trying to obtain benefits they didn’t deserve.
However, Rothstein’s research found that there was no relationship at all between the end of unemployment insurance and applications for Social Security disability benefits. As a result, it does not appear that Americans are “gaming the system” in any significant way.
This makes sense. After all, disability benefits are only a fraction of what people can earn by working, and no benefit can replace the status and sense of status accomplishment that comes from full-time work. People are also eager to avoid the unfair but all-too-common stigma that comes from being disabled.
Unsurprisingly, insurance companies often suspect claimants of being malingerers or trying to “game the system.” Surely there are some people trying to take advantage of Social Security, but the evidence shows that this is not a systematic problem. If you or someone you know is facing these kinds of accusations from an insurer, contact us. We may be able to help.