The impact of changing financial work incentives on the earnings of Social Security Disability Insurance (SSDI) beneficiaries

SSDI beneficiaries lose their entire cash benefit if they perform work that is substantial gainful activity (SGA) after using Social Security work incentive programs. The complete loss of benefits might be a work disincentive for beneficiaries. We report results from a pilot project that replaces th...

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Bibliographic Details
Published in:Journal of policy analysis and management 2011-09, Vol.30 (4), p.708-728
Main Authors: Weathers, Robert R., Hemmeter, Jeffrey
Format: Article
Language:English
Subjects:
Beneficiaries
Benefits
Cash
Change
Connecticut
Control groups
Disabilities
Disability benefit
Disability insurance
Earnings
Empirical research
Employment
Financial incentives
Government programmes
Incentives
Income
Insurance
Payment
Payment systems
Pilot Projects
Policy analysis
Public policy
Social insurance
Social policy
Social security
Social Security Disability Insurance
Studies
Tax benefits
U.S.A
Utah
Vermont
Welfare policy
Welfare Recipients
Welfare Services
Wisconsin
Work incentives
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Summary:SSDI beneficiaries lose their entire cash benefit if they perform work that is substantial gainful activity (SGA) after using Social Security work incentive programs. The complete loss of benefits might be a work disincentive for beneficiaries. We report results from a pilot project that replaces the complete loss of benefits with a gradual reduction in benefits of $1 for every $2 earned above an earnings disregard level. Beneficiaries who volunteered to participate in the project were randomly assigned to a group receiving the new program or to a control group. The policy led to a 25 percent increase in the percentage of beneficiaries with earnings above the annualized SGA amount, or $11,760 in 2009 dollars. It did not result in a reduction in benefit payments.
ISSN:0276-8739
1520-6688
DOI:10.1002/pam.20611