When most Americans think of Social Security, they focus on the retirement benefits they'll eventually receive from the program. But for those who suffer an injury or illness that prevents them from working long-term, Social Security disability benefits are far more important, and those benefits can be the only dependable income source to help them deal with the financial challenges of living without earned income.
Over the past 15 years, the need for disability benefits has grown greatly. Yet as the most recent figures from the Social Security Administration show, approval rates for disability benefit applications have plunged over that period, and almost two-thirds of all applications for Social Security disability now get rejected. Let's take a closer look at the numbers and the rationale behind them, as well as some things you can do to boost the odds of having your application approved.
The upward trend in disability benefit applications
The Social Security Administration has seen a huge spike in applications for disability benefits. As you can see below, since 1999, the number of applications has more than doubled, and after hitting new peaks in 2009 and 2010 in the aftermath of the Great Recession, claim volume has moderated only minimally.
Yet even with that surge in applications, the percentage of those claims gaining approval has plunged. The SSA accepted more than half of all applications for disability in 1999, but that rate fell to 33.5% by last year.
Interestingly, though, many people who are involved in approving Social Security disability insurance say they feel increasing pressure to approve applicants' claims. For years, major backlogs of disability claim disputes have led to immense workloads for administrative law judges charged with handling appeals of disability claims that the SSA initially rejected. Some judges have even faced allegations that they were effectively rubber-stamping benefit awards for cases under their review, with the House Oversight Committee having identified at least four judges who approved more than 90% of the cases they heard.
Set the stage for disability approval
Many people misunderstand when Social Security disability benefits come into play. In order for you to be eligible for benefits, the disability must be one that will last longer than a year and that leaves you unable to do the work you did before or to adjust to other types of work. Specifically, the SSA will look at your ability to earn money from other employment, as well as the severity of the disability and any specific medical conditions that caused it. Moreover, based on your current occupation, the SSA will make judgment calls about whether different but related jobs could be options for you. The biggest misconception applicants have is that because no job in a given profession is available to them, they are therefore incapable of doing that work, when in fact, their capability can form the basis of the approval or rejection of their disability benefits. It's up to you to establish that you aren't able to work in a given alternative occupation because of your disability.
Even if your situation does qualify for consideration of disability benefits, the SSA often rejects Social Security disability claims because the applicant makes simple technical errors, such as omitting required information or providing inaccurate or insufficient explanations of their situation. In particular, it's important to collect as much medical documentation as possible from doctors, hospitals, and other healthcare providers in order to make it easier for the SSA to process your claim efficiently. Work records establishing the scope of your past jobs can also be helpful. Counting on the SSA to request those records adds to delays, and no one has a bigger incentive to make sure that everyone follows through on those requests than you do.
Finally, if the disability-claim process intimidates you, then getting expert assistance can be crucial to understanding your rights. For instance, with a multi-step appeals process, you can avoid the common mistake of giving up too soon if the SSA initially turns down your claim. Sometimes all it takes is tenacity to get a positive result -- even if it takes longer than you'd like.
Becoming disabled is one of the biggest challenges anyone can face, and the financial threats it entails are just one part of that struggle. By being knowledgeable about the Social Security disability claim process, you can improve your chances of getting the benefits you deserve.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.