8,753,935: Workers on Disability Set Another Record in July; Exceed Population of 39 States

July 23, 2012 - 10:25 AM
U.S. Treasury

(AP Photo)

(CNSNews.com) - The number of workers taking federal disability insurance payments hit yet another record in July, increasing to 8,753,935 during the month from the previous record of 8,733,461 set in June, according to newly released data from the Social Security Administration.

The 8,753,935 workers who took federal disability insurance payments in July exceeded the population of 39 of the 50 states. Only 11 states—California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina and New Jersey—had more people in them than the number of workers on the federal disability insurance rolls in July.

Virginia, the twelfth most-populous state, had 8,096,604 people in 2011, according to the latest Census Bureau estimate. That would make Virginia’s population about 657,331 less than the number of workers who took federal disability insurance payments in July.

Congress enacted legislation in 1956 to add federal disability insurance to the Social Security system. Over the decades, the number of Americans actually working has dramatically declined relative to the number claiming federal disability insurance payments.

By July 1967, there 74,520,000 Americans actually working and 1,145,663 workers taking disability payments. That made a ratio of 65 actual workers for each worker collecting disability. In July 1987, there were 112,634,000 people actually working and 2,759,852 people collecting disability—a ratio of about 41 actual workers to each worker collecting disability.

When President Barack Obama took office in January 2009, there were 142,187,000 people actually working  and 7,442,377 workers collecting disability—a ratio of about 19 to 1.

In June, there were 142,415,000 people actually working and 8,733,461 workers claiming disability—a ratio of about 16 to 1.

In July, in addition to the 8,753,935 workers who received federal disability insurance payments, there were also 165,564 spouses of disabled workers and 1,850,653 children of disabled workers who received payments. That brought the total number of disability beneficiaries to 10,770,152.

Federal disability insurance is funded by a 1.8 percent payroll tax that is split between employers and workers. Self-employed people pay the entire 1.8 percent.

The Social Security System’s Disability Insurance Trust Fund has run deficits in each of the last three fiscal years, meaning the government has needed to borrow money to pay disability benefits to the workers claiming them. In fiscal 2009, the Disability Insurance Trust Fund ran a deficit of $8.5 billion. In fiscal 2010, it ran a deficit of $20.8 billion. And in fiscal 2011, it ran a deficit of $25.3 billion.

To be eligible for federal disability insurance payments, a person must have worked long enough to have qualified for the benefits and must also meet the Social Security Administration’s definition of “disabled.”

“We consider you disabled under Social Security rules if: You cannot do work that you did before; we decide that you cannot adjust to other work because of your medical condition(s); and your disability has lasted or is expected to last for at least one year or to result in death,” says the Social Security Administration.

Whether someone has worked long enough to qualify for federal disability insurance payments depends on their age and the number of “credits” they have earned from the Social Security system.

“Social Security work credits are based on your total yearly wages or self-employment income,” the Social Security Administration explains. “You can earn up to four credits each year. The amount needed for a credit changes from year to year. In 2012, for example, you earn one credit for each $1,130 of wages or self-employment income. When you've earned $4,520, you've earned your four credits for the year.”

According to the Social Security Administration’s formula, someone under 24 years of age would qualify for disability payments if he or she had earned at least 6 credits—or about $6,780—over the three years before they became disabled.