Debra L. Brucker Andrew J. Houtenville. November 2013 APPAM Annual Conference

Transcription

1 Living on the edge: The potential economic impact of cuts to Social Security Disability Insurance and Supplemental Security Income benefits on beneficiaries Debra L. Brucker Andrew J. Houtenville November 2013 APPAM Annual Conference

2 Support U.S. Department of Education, National Institute on Disability and Rehabilitation Research (NIDRR) Employment Policy and Measurement Rehabilitation Research and Training Center at University of New Hampshire

3 Research question How would cuts to disability benefits (DI and SSI) impact beneficiaries?

4 Aims 1) Provide updated estimates of cross-participation for people with disabilities 2) Compare income, resource and poverty levels for beneficiaries 3) Calculate the share of income or resources received from disability benefits 4) Estimate the impact of DI and/or SSI benefit reductions on poverty status

5 Background People with disabilities are more likely than persons without disabilities to be poor, not participate in the labor force, and, participate in safety net programs.

6 Reforms to disability benefits Given recent growth in disability benefit participation, there are many reform discussions taking place: Early intervention; Shifting funding to support early education; Improving disability benefit program efficiency; Adding employer incentives to reduce employee movement to disability programs; and,

7 Reforms to disability benefits Reducing the $ amount of benefits received Congressional Budget Office (2012) modeled a 15% cut to DI benefits; Social Security Advisory Board (2013) suggests that DI benefits will be cut by 20% if no reforms occur.

8 Research question How would cuts to disability benefits (DI and SSI) impact beneficiaries?

9 Data 2012 Current Population Survey Annual Statistical and Economic Supplement, merged with Supplemental Poverty Measure CPS data Unweighted N=201,398 Weighted N=308,827,259

10 Definitions Benefit receipt = Any SSA DI DI only SSI SSI only SSI and DI concurrently

11 Definitions Cross-participation Energy assistance Indian health Military health Other welfare Public housing Rent subsidy Supplemental Nutrition Assistance Program Temporary Assistance to Needy Families Unemployment insurance Veteran disability Veteran pension Workers compensation

12 Definitions Income earnings, unemployment benefits, worker s compensation, social security, supplemental security income, public assistance, veteran s payments, survivor benefits, pension or retirement income, interest, dividends, rents, royalties, income from estates, trusts, educational assistance, alimony, child support, assistance from outside the household, and other miscellaneous sources of income

13 Definitions Supplemental Poverty Measure resources value of cash income from all sources, plus the value of in-kind benefits that are available to buy the basic bundle of goods minus necessary expenses for critical goods and services including income and payroll taxes, childcare and other work-related expenses, child support payments to another household and medical out-of-pocket costs

14 Methods Restrict to working age Categorize by benefit receipt and cross-participation Using existing variables and created variables Official poverty=(family income/family poverty threshold)*100 SPM poverty=(spm resources/spm poverty threshold)*100 Share of family income=(benefit amount/family income)*100 Share of SPM resources=(benefit amount/spm resources)*100 Benefit reductions moving people into poverty Example of 10% cut: Family income greater than zero ((Family income)-(di benefit amount*.90))/(family poverty cut-off) Values above zero are not in poverty

15 Results Cross-participation is high for beneficiaries. Any SSA: 50% DI: 43% DI only: 39% SSI: 63% SSI only: 61% DI and SSI: 71%

16 Results Cross-participants have significantly lower income, resources, and benefit levels. As an example, for DI beneficiaries: Cross-participant (Annual $) Non-cross participant (Annual $) Median family income 16,560 36,110 Median SPM resources 18,970 41,686 Median DI benefit 10,157 12,000 16

17 Results More cross-participants are in or near poverty. As an example, for DI beneficiaries: Cross-participant (%) Non-cross participant (%) 100% or below % % % % 6 5 Over 200%

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19 Results The share of income or resources from disability benefits is higher for crossparticipants than the share received by noncross-participants, although it is high for both groups. As an example, for DI beneficiaries: Cross-participants (%) Non-cross-participants (%) Share of family income from DI Share of SPM resources from DI a 19

20 Results So far, we ve seen: Cross-participation is high; Income, resources and poverty differ by cross-participation status; and, The share of income or resources received from benefits is higher for cross-participants, but is relatively high for both groups. What would be the impact of benefit cuts?

21 Results: DI DI DI ONLY Alternative benefit level All Cross Non-cross All Cross Non-cross Official poverty DI - 10% DI - 25% DI - 50% DI - 75% DI - 100% SPM poverty DI - 10% DI - 25% DI - 50% DI - 75% DI - 100%

22 Results: SSI SSI SSI ONLY All Cross Non-cross All Cross Non-cross Official poverty SSI - 10% SSI - 25% SSI - 50% SSI - 75% SSI - 100% SPM poverty SSI - 10% SSI - 25% SSI - 50% SSI - 75% SSI - 100%

23 Results: DI&SSI SSI&DI Alternative benefit level All Cross Non-cross Official poverty DI - 10% DI - 25% DI - 50% DI - 75% DI - 100% SPM poverty DI - 10% DI - 25% DI - 50% DI - 75% DI - 100%

24 Conclusion Cuts in disability benefits will increase the numbers of beneficiaries in poverty and may increase participation in other safety net programs. Policymakers should consider the possible broader systemic impact of cuts as reform options are discussed.

25 Questions? Thank you!

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