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No correlation between rising SSD claims and expiring jobless pay

Lately, given the talks about budget cuts on the federal and state levels, there has been much suspicious and frankly misleading discussion about why people apply for Social Security disability benefits. Often, these benefits are a lifeline for those who receive them, keeping those individuals out of deep poverty.

Reporters and pundits, however, have suggested that SSD fraud is rampant, and that people collecting unemployment benefits during the recession simply switched over to disability benefits when unemployment pay stopped. But an ongoing study by a University of California economist shows otherwise.

Jesse Rothstein at UC-Berkeley finds no correlation between the increased number of disability claims and the expiration of unemployment benefits. In fact, to help people in a time of rising unemployment, governments allowed jobless benefits to be extended, meaning that fewer benefits expired.

But Rothstein found that the number of disability claims continued to climb. These disability applicants were likely not those already collecting unemployment. The disability claim process can be time-consuming and complicated, sometimes requiring help from an attorney, so people already collecting unemployment benefits were not inclined to apply for disability.

According to Rothstein, what the study suggests is that, no matter who you are, disabled or not, it is difficult to find employment when the job market is bad. Companies are not as willing to hire a person with a disability in such a market, and people with disabilities are far less likely to reinvent their careers when the jobs simply aren't available.

The result? More people have to rely on SSD to make ends meet. The problem is not the people who need those benefits. The problem is the economy, and it is important that politicians, pundits and people in the media stop stigmatizing those many people in California and throughout the country who receive disability benefits.

If you would like to learn more about disability law, our Los Angeles SSD and SSI page may provide some answers.

Source: The Wall Street Journal, "Are Long-Term Unemployed Taking Refuge in Disability?" Ben Casselman, June 14, 2013

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