Why the U.S. Needs to Reform Disability Benefits

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By Jori Hamilton

It might make sense to ensure only those most in need receive disability benefits. Lawmakers often argue this point against the activists that would reform disability benefits in the U.S.

What they are ignoring, however, is the fact that limitations on income can keep individuals with disabilities and their families trapped in cycles of poverty. These cycles are damaging to society as a whole, restricting opportunities and costing communities more.

Disability benefit reform is necessary to produce truly equitable and beneficial outcomes for every member of society. Here, we explore why the system is broken and how immediate change can benefit everyone.

Why Disability Benefits are Broken

To understand why disability benefits are broken, you must first understand how they work. In the U.S., an individual with a disability has to go through a rigorous process of paperwork and proof to be eligible for Social Security Disability Insurance (SSDI). From there, they are capped at how much income they can bring in per month to continuously qualify for benefits.

Those who want to work or start a business have to undergo a series of tests. These include:

  • Significant Services and Substantial Income Test
  • Compatibility Test
  • Worth of Work Test
  • Countable Income Test

What all these tests are attempting to gauge is the amount of money individuals with disabilities bring in every month. By 2021 standards, a monthly income of $1,310 is defined as substantial. At this point, you’re in danger of losing your benefits.

And while this number doesn’t include “unearned income,” like benefits and interest, it still represents an amount significantly below a living wage. According to MIT, the average living wage in the U.S. is about $16.54 per hour. As a monthly salary, this would equate to about $2,646.40.

This means that individuals on disability benefits have to walk a tight rope to balance their finances. If they earn just a little too much, they risk losing assistance. But the income cap is barely sufficient. This results in vicious cycles and negatives like the following:

  • Individuals with disabilities are de-incentivized from working.
  • Society loses the talents, knowledge, and diversity that individuals with disabilities would bring to the workforce.
  • Individuals with disabilities are often trapped in poverty cycles.

Add to all this the stigma that comes with a disability while trying to work, and we have a truly broken benefits system. Just ask anyone who might be judged by their appearance when navigating a career; those with disabilities are too often judged by their conditions or gaps in job history. The problem is only exacerbated by a benefits system that punishes work.

However, reforms could help solve these problems.

How Reforms Would Benefit Society

The U.S. needs a comprehensive conversation on cultural disability and the impacts of disability benefits. With a discussion that considers all the issues, we can reform the social safety net for our individuals with disabilities for the greatest possible effect.

Right now, our healthcare system makes it challenging enough to receive healthcare coverage — especially when it comes to mental health disabilities. Stigma and barriers abound, leaving many to turn to alternative forms of managing stress and anxiety, such as breathing exercises and practicing mindfulness, as they struggle to make ends meet.

Proposed reforms could change all this. These are some of the ways reforms could benefit society:

  • A flat anti-poverty SSDI rate would boost benefits for low-income workers and save $188 billion over ten years.
  • Relaxed asset limits would encourage those in disability programs to save, helping families end poverty cycles.
  • Reworked language and program goals would help individuals with disabilities get the resources they need without harmful, stigmatizing language around ending “dependency.”
  • Expanding the Achieving a Better Life Experience (ABLE) Act to allow individuals with disabilities under 26 to open tax-advantaged savings accounts.

These are only a few of the many paths we might take towards more comprehensive assistance. But the results just might improve lives and livelihoods while encouraging individuals to work when and how they can.

Fixing the Problem in Light of the Public Health Crisis

Nothing has shown us how precarious many individuals’ positions really are in the poverty traps in which they are caught by poorly framed benefits than the COVID-19 pandemic. As individuals with disabilities and their families looked to stimulus help, they found themselves more likely to wait longer. Asset and income limits in SSDI benefits discourage banking, saving, and working. These factors all made for a financially dangerous situation for millions of Americans, but with the right reforms, we can prevent these risks from happening again.

You too can help. Start by understanding how the system is broken, then support reforms through exercising your democratic rights.

Jori Hamilton

Jori Hamilton is an experienced writer residing in the Northwestern U.S. She covers a wide range of topics but takes a particular interest in topics related to politics, urban living, society, and health. If you’d like to learn more about Jori, you can follow her on Twitter and LinkedIn.

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