Potential Changes to Social Security Disability Insurance
The Social Security Administration (SSA) is preparing a proposed rule that could significantly reshape how disability eligibility is determined for two major programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). This brief examines the technical and policy issues at stake, including the transition to modern occupational data and changes to how age and other factors influence eligibility. Readers will gain insight into the potential impact of these changes on program participation, spending, and the economic security of older workers.
Why This Matters
SSA’s proposed changes could reduce disability benefit eligibility for hundreds of thousands of Americans, particularly older workers. Policymakers, advocates, and researchers should understand the implications for income support, health coverage, and retirement decisions. This brief clarifies the technical decisions driving the regulation and highlights the trade-offs that could shape future disability policy.
Key Takeaways
SSA’s forthcoming regulation includes three major components:
- Replacing outdated occupational data: SSA plans to adopt the Bureau of Labor Statistics’ Occupational Requirements Survey (ORS) to replace the obsolete Dictionary of Occupational Titles (DOT), a move with bipartisan support.
- Implementing data from ORS: SSA must make many decisions on how best to implement and interpret ORS data, such as determining whether sufficient jobs exist at various skill and exertional levels that will directly affect eligibility outcomes.
- Age as a factor: SSA is considering changes to how age, education, and past work experience influence disability determinations. These changes would disproportionately affect older workers.
Estimated Impact:
- The anticipated regulation could reduce eligibility for new applicants to the SSDI program by as much as 20 percent overall, and up to 30 percent among older workers. The potential impact on the SSI program is unclear.
- A 10 percent reduction in SSDI eligibility could result in 500,000 people losing access over 10 years, including 80,000 widows and children. An additional 250,000 beneficiaries could lose eligibility for part of the period.
- A 10 percent reduction would reduce benefits by $82 billion, with ripple effects on Medicare and Medicaid eligibility.
- Many denied older workers may claim early retirement benefits, reducing their lifetime income by up to 30 percent.
These findings underscore the importance of how technical decisions—such as data thresholds and age weighting—can have profound policy and human consequences.
How We Did It
We reviewed SSA documentation, academic research, and public reporting, including estimates from former SSA officials. We modeled the impact of a 10 percent reduction in SSDI eligibility using program participation data, actuarial projections, and benefit formulas to estimate changes in enrollment and spending over a 10-year budget window.