Believe it or not, the title is based on actual allegations being made in DC. Members of congress have published a statement linking declining workers’ compensation costs to rising Social Security Disability Income costs (both being measured per hundred dollars of wages paid in the national workforce). The ominous conclusion is that savings in workers’ compensation costs must be transferred to the SSDI trust funds (which are now officially zero).
To prove the assertion, one can look at the gradual rise in SSDI costs since 2000, vs the gradual decline in workers compensation costs. Convincing? Hardly.
Some additional information is needed:
First, the Social Security regulations have been relaxed somewhat to allow for more people to qualify for disability income. That alone could account for the rise in SSDI.
Second, workplaces are safer than ever. Plus, more workers’ compensation boards are using objective evidence standards to measure disability.
Workplace safety has been on the rise, steadily, for decades, due to an economy based less on brute force activity and more on machine assisted tasking. In addition, safety technology and medical advances have greatly reduced the frequency and length of lost time.
Several decades ago, workers’ compensation was operating under assumptions which can be traced to the state of the art practices in medicine prior to 1914. Tables which awarded benefits for arm and leg fractures were based on average outcomes in treatment in English factories from 1848-1888. Those tables were incorporated into US compensation laws in the early 20th century and only recently have been replaced by modern methods of evaluation.
So what is to be made of increases in SSDI vs the decreases in workers compensation? Declining costs of workers’ compensation, if due to enhanced safety, should not be characterized as a “race to the bottom”, as was suggested in the congressional paper. Nor should rising SSDI costs be seen as the result of cost transfer from workers’ compensation to Social Security – especially where the definitions of disability were intentionally changed to allow for more disability awards.
Your correspondent has handled Social Security disability claims since 1977 and workers’ compensation claims since 1975. The bulk of Social Security claims are for conditions with onset after age 50, mostly through gradual degeneration. About 20% of all claims are for chronic mental illness. The change in standards was long advocated by state agencies bearing the bulk of responsibility for many disabled.
Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. firstname.lastname@example.org
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