End Double-Dipping: An Easy, Bipartisan Step Toward Saving Disability Insurance
Alexander Shen /
A friend calls you and begs for cash to aid in his job search. A minute later, he calls you again and begs for more cash because he hurt his back and is unable to work. You, of course, realize that your friend is interested only in mooching off your money. How could he possibly claim to be looking for a job if he is unable to work?
Many unemployed workers are doing just that. In 2010, 117,000 individuals received benefits from both state unemployment insurance programs (UI) and Social Security Disability Insurance (DI). Unemployment benefits are given to those eligible who are able to work and actively seeking employment, while disability benefits are given to those unable to work at all. Common sense would dictate that participation in these programs is mutually exclusive, but somehow 117,000 workers convinced the government that they are unable to work and actively seeking employment.
Thankfully, this “double-dipping” loophole has drawn increasing bipartisan attention and proposals to fix the problem.
The President’s budget includes a provision that would automatically reduce one’s DI benefits, dollar-for-dollar, by the amount in UI received that month. This proposal would save approximately $3.4 billion over 10 years, according to the Social Security Administration.
Another proposal, authored by Senator Tom Coburn (R–OK), checks DI recipients for simultaneous participation in UI. If these individuals are found to be double-dipping, their DI benefit is automatically reduced to zero. This proposal would save $5 billion over 10 years.
Proposals written by Representative Sam Johnson (R–TX) and Senator Rob Portman (R–OH) go even further. Their solution involves classifying receipt of UI benefits as participation in “substantial gainful activity,” which, under Social Security law, makes individuals ineligible for participation in DI altogether. The Congressional Budget Office estimates savings from this proposal at $5.4 billion over the next decade.
With the DI trust fund set to run out in 2016, elimination of double-dipping is a necessary first step to preventing deep benefit cuts and restoring solvency to the DI program. As Heritage budget fellow Romina Boccia, explains:
In the absence of reform—or drawing from Social Security’s [retirement] trust fund—DI program benefits would have to be reduced by 20 percent. DI’s financial problems are putting the benefits of one of the most vulnerable populations at risk.
By the nature of the law, those who participate in unemployment insurance have effectively forfeited their right to claim personal disability. The President’s and Coburn’s proposals discourage gaming the system, but the Johnson/Portman solution makes the truth undeniably clear: If you are looking for work, you cannot be unable to work.
Congress should take active steps to ensure that scarce disability benefits are there for those who truly need them. Though it will take more than $5.4 billion to save our failing DI program, elimination of double-dipping is a common-sense reform that has strong potential for bipartisan support.