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Disability Shocks and Financial Stability

Posted by Louis B. Lusk | Aug 15, 2013 | 0 Comments

Disability Shocks and Financial Stability

Disability can strike at any time, but the chances of becoming disabled increase with age. When an individual suffers a disabling event, that “disability shock” has a large impact on their lives in a variety of ways. The U.S. Social Security Administration Office of Retirement and Disability Policy reviewed a number of studies to look at how a disability shock impacted older adults nearing retirement age. The Review The Office of Retirement and Disability Policy (ORDP) looked at adults aged 51-56 starting in 1992 and then reviewed their status after a period of eight years. They separated these individuals into three groups. “The first group consists of people who were nondisabled in 1992 and stayed nondisabled by 2000. The second group was comprised of people with no disabilities at the baseline who experience at least one disability shock between the baseline and the follow-up eight years later. The third group consisted of people who were already disabled at the baseline and stayed disabled eight years later.” The ORDP wanted to see what were the financial impacts of a disability shock on this age group. The ORDP stated its motivation was to look at “(1) the dramatically increasing incidence of disability among people in their fifties and early sixties, and (2) the gaps in safety nets near retirement age.” In order to have a solid review of those in the second group who experienced a disability shock, the ORDP compared them to not only those who did not suffer any disability shocks, but also those who were already dealing with a disability and continued to do so over the review period. The ORDP said that in comparing the three groups “Nondisabled individuals who did not experience a disability shock are commonly used as a counterfactual group, but in this study, we also include a second comparison group of people who were disabled at the baseline and stayed disabled over the observation period. Chronically disabled people comprise a somewhat neglected group in longitudinal studies because the focus in those analyses is often on the effect of disability shocks, which needs a comparison group consisting of nondisabled people who did not experience a disability shock. However, the group of people who started as disabled and remained disabled provides a useful comparison basis consisting of individuals who experienced chronic disablement, in some cases going back to youth or even childhood.” The Findings The ORDP found that those who suffered no disability shock retained their financial security even when these individuals retired from the work force. Those who were already dealing with disability at the start of the study period and remained disabled had lower financial security, but receipt of benefits lessened the financial drop. “Those who suffered a disabling event during the study period showed an average earnings loss, and on average, public benefits and private pensions replaced less than half of their lost earnings. The net increase in poverty was somewhat muted because of spousal income among the married, while the poverty increase was substantially larger among the non-married. Among newly disabled people, median household wealth increased, but at a much lower rate than among those who started and stayed nondisabled. While the private health insurance coverage of those newly disabled declined, this was more than compensated for by the increase in public health insurance.” Even with this new study, those who suffer a disability shock can apply for Social Security Disability (SSD) benefits to assist with the financial impact of the disabling condition. Contact our experienced attorney to assist you with applying for SSD benefits. See Related Posts: Sickle Cell Disease and Social Security Disability Intellectual Disability Replaces Mental Retardation Worrying to the Point of Disability

About the Author

Louis B. Lusk

About Louis B. Lusk – Disability Attorney Attorney Louis B. Lusk has helped thousands of disabled individuals recover Social Security disability and SSI disability benefits.  He is an active member of the National Organization of Social Security Claimant's Representatives (NOSSCR), an organizat...


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