Fox Figures Suggest The US Use Britain's Disability Benefit System As Model

Fox Business' Stuart Varney: Britain's Tests For Disability Eligibility “Exposed A Giant Scam.” Fox Business host Stuart Varney claimed on Fox & Friends that it was easy to receive Social Security disability benefits because individuals did not have to “prove” their disability, and further claimed that revisions to the British disability benefit system, which included a test for identifying fraud in the system, “worked” and “exposed a giant scam”:

BRIAN KILMEADE (host): Stuart, I thought it was interesting as you told us in the break, the British had the same problem, and they hired a French company to come in and evaluate the legitimacy of these claims. Did it work?

STUART VARNEY: Well it worked, in the sense that it exposed a giant scam. In Britain, they did, it was a computer test. They didn't say go get checked by a doctor, they ran the records through a computer, this is what the French company did. They found that half the people getting these benefits were in fact capable of working. And one-third of the recipients, they were scamming, basically. They walked away, they would walk away if they were subjected to any kind of test. So the British system, they call it incapacity benefit, not disability. It's a giant scam. That's what it is. [Fox News, Fox & Friends, 4/8/13]

Fox News Contributor Jonah Goldberg: The U.S. Should Emulate Britain And Ask Recipients Of Disability Benefits To Take A Medical Exam To Prove Their Disability. In a column featured in the New York Post and Los Angeles Times, Fox News contributor Jonah Goldberg argued that one way to determine whether there was widespread fraud in disability programs was to “to ask every recipient to get a thorough examination, just as they did in Britain”:

The British government recently asked everyone receiving an “incapacity benefit” -- a disability program slowly being phased out under new reforms -- to submit to a medical test to confirm they were too disabled to work. A third of recipients (878,000 people) dropped out of the program rather than be examined. Of those tested, more than half (55 percent) were found fit for work, and a quarter were found fit for some work.

But that's Britain, where there's a long tradition of gaming the dole. Americans would never think of taking advantage of the taxpayers or misleading the government. Well, except for the couple dozen people who have pleaded guilty to scamming the LIRR's federal disability system in a $1 billion fraud scheme. A billion bucks would pay for a lot of White House tours.

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That points to the even bigger parts of the story. As the nature of the economy changes, disability programs are sometimes taking the place of welfare for those who feel locked out of the workforce -- and state governments are loving it. States pay for welfare, the feds pay for disabilities.

There are those who are quick to argue that this is all bogus, there's nothing amiss with the disability system that greater funding and a better economy won't fix. Maybe they're right. One way to find out would be to ask every recipient to get a thorough examination, just as they did in Britain. Maybe the results here in the United States would be interesting too. [New York Post, 4/2/13]

Eligibility Criteria For US Disability Benefits Are Already Stringent, And More Than Half Of All Claims Are Denied

CBPP: “Eligibility Criteria Are Stringent.” The Center on Budget and Policy Priorities noted that the eligibility criteria for disability insurance applicants are “stringent.” CBPP further noted that “applicants must show that they suffer from a 'severe, medically determinable physical or mental impairment that is expected to last 12 months or result in death'” and must endure a significant waiting period:

The law requires that the impairment must already have lasted for at least five months before the applicant can qualify for DI.  Together with the requirement that the impairment must be expected to last another 12 months or result in death, this emphasizes that DI is not a program for the temporarily disabled.  SSI may be available during that period for very poor applicants; sick leave, private insurance, family resources, or savings might tide over others. The waiting period provides an intuitive reason why applications rise during recessions.  In a robust economy, few workers will quit a job to subsist on little or nothing for five months with an uncertain prospect of a DI award; but in a recession, a spell of unemployment can last long enough for a disabled worker to be able to satisfy the waiting-period requirement.

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Typical processing times at the DDS level are three to four months, and processing times at the hearing level average about a year. The allowance rate at the Administrative Law Judge (ALJ) level (also known as the hearing level, generally the second level of appeal) is quite high, which has led to some valid concerns about inconsistency in decisions; yet it is important to remember that ALJs are often seeing claimants whose condition has deteriorated since their application was turned down and whose case file is better documented when it reaches the ALJ (often with the help of an attorney) than it was at the DDS stage. [Center on Budget and Policy Priorities, 8/9/12]

SSA: “Denied Disability Claims Have Averaged Nearly 53 Percent.” According to the most recent data available from the Social Security Administration, only 34.8 percent of applicants were successfully awarded disability benefits in 2010, down from 56.1 percent a decade earlier. Between 2001 and 2010, "[d]enied disability claims have averaged nearly 53 percent." From the SSA:

The final award rate for disabled-worker applicants has varied over time, averaging nearly 45 percent for claims filed from 2001 through 2010. The percentage of applicants awarded benefits at the initial claims level averaged 28 percent over the same period and ranged from a high of 37 percent to a low of 26 percent. The percentage of applicants awarded at the reconsideration and hearing levels are averaging 3 percent and 13 percent, respectively. Denied disability claims have averaged nearly 53 percent. [Social Security Administration, July 2012]

CBO: 61 Percent Of Initial Disability Claims Are Denied. According to research estimates from the non-partisan Congressional Budget Office, 61 percent of disability applicants are denied during the Initial Determination Stage. Twenty-seven percent of those applicants then appeal the decision, but only 3 percent of appeals are approved during Reconsideration, the first appeal stage. [Congressional Budget Office, 7/16/12]

GAO: SSA “Denied, On Average, 54 Percent” Of Supplemental Security Income Child Applicants And Recipients With Mental Impairments. According to the Government Accountability Office, "[t]he number of Supplemental Security Income (SSI) child applicants and recipients with mental impairments has increased substantially for more than a decade, even though the Social Security Administration (SSA) denied, on average, 54 percent of such claims from fiscal years 2000 to 2011." [Government Accountability Office, June 2012] 

NBER: Disability Beneficiaries With Mental And Musculoskeletal Disorders Die Less Frequently. The National Bureau of Economic Research explained that the increased number of individuals receiving disability benefits for mental and musculoskeletal disorders, such as arthritis and back pain, was due to “an early onset and low age-specific mortality” of those disorders, not increased levels of fraud:

Because mental and musculoskeletal disorders have an early onset and low age-specific mortality, Disability Insurance beneficiaries with these diagnoses experience relatively long durations on the program. Thus, in 1983, 4.9 percent of people receiving disability insurance in that year died; by 2004, only 3.1 percent of those receiving disability benefits in that year died. [National Bureau of Economic Research, August 2006]

For more on the false claim that the rise in disability benefits is due to fraud, click here and here.

UK Disability Benefits Tests Were Largely Overturned

BBC: 40 Percent Of New Disability Eligibility Tests Were Overturned On Appeal. BBC News reported that the initial tests evaluating disability claims in the U.K. found roughly 23 percent of recipients were no longer eligible for benefits, and roughly half were “capable of some work.” However, the BBC explained that a majority of those decisions were appealed, and 40 percent of the appeals were successful, reversing the initial decision and reinstating benefits for the individual. [BBC News, 3/25/12]

Demos: “Disabled Families Across The Country Faced Significant Reductions In Their Household Income” Following Initial Cuts To Disability Benefits. Demos, a cross-party think tank, studied the impact of cuts to individuals with disabilities in Britain following budget changes in June 2010, and looked at five families that included individuals with disabilities. They found “disabled families across the country faced significant reductions in their household income,” and concluded “the deepest cuts were yet to take effect”:

We calculated how the welfare reforms announced in the Emergency Budget and in the run up to the Spending Review would affect five typical disabled families. Our research showed that, far from being protected from the worst of the cuts, disabled families across the country faced significant reductions in their household income. Losses of two to three thousand pounds over the course of the next parliament were typical and overall, we estimated that disabled people would lose £9 billion in welfare support in the next five years.

[...]

Demos has now published the final instalment of the study, Destination Unknown: Summer 2012. The report found that despite the drop in income and worsening conditions for each of our five families over the preceding two years, the deepest cuts were yet to take effect. [Demos, accessed 4/3/13]

Further Cuts To UK Disability System Will Plunge Thousands Of Individuals With Disabilities Into Poverty

Demos: New Disability Benefit System “Most Likely To Increase Disability Poverty Rather Than Incentivise Work.” Demos found that the new disability benefit system the UK is implementing in 2013, known as the Disability Living Allowance (DLA), is “most likely to increase disability poverty rather than incentivise work”:

However, there are four concerning aspects to the nature of the reforms which are accompanying them. The first is that the government believes cutting benefits will inevitably incentivise work. This takes no account of those who may be unable to work (those with complex needs as well as carers) or those who can only work with personalised support. For these groups, cutting benefits will undermine their quality of life and little else. The second is that DLA, the only benefit which compensates for the additional costs of living with a disability and is non-means tested, is increasingly mis-represented as an 'out of work' benefit and so subject to the same cuts as other benefits to 'incentivise work'. Again, this is most likely to increase disability poverty rather than incentivise work. The third is an increasing focus on the medical aspect of disability, to the detriment of the social model - that is, a recognition that social and practical factors have a role to play in a person's disability, not just their medical impairment. This is leading to the adoption of exclusively medical testing to assess eligibility for incapacity benefits and even DLA - which can only feasibly be based on a calculation of additional living costs. The fourth and final problem is the government's exclusive focus on people's economic contribution to society. Finding employment is seen as the only successful outcome for welfare-to-work providers to achieve. This creates perverse incentives only to help those who are easiest to employ; it overlooks those who may not be able to engage in formal employment but who can contribute to society in other ways (eg volunteering, building social capital), and it also leads to work programmes that do not build people's capabilities or recognise distance travelled towards employability. This is particularly inappropriate in the current economic climate, where jobs are harder to come by. [Demos, accessed 4/3/13]

The Guardian: Research Shows Benefit Cuts Will “Plunge Tens Of Thousands Of Disabled People Deeper Into Poverty.” The Guardian reported that research shows further reforms to the disability system in the U.K. will “plunge tens of thousands of disabled people deeper into poverty”:

Thousands of disabled people will be hit by up to six different welfare cuts, with the very worst off potentially losing up to £23,000 each over five years, research shows.

The effect of the changes, the bulk of which kick in after 1 April, will be to plunge tens of thousands of disabled people deeper into poverty, says a study that captures the multiple impacts of social security reforms for the first time.

The research, carried out for the Guardian, estimates that by 2017-18 about 3.7 million disabled people will collectively lose £28bn as a result of the reforms. Individuals will be hit by one of seven combinations of welfare cuts and small numbers could lose more than £20,000 each. [The Guardian, 3/26/13]

The Independent: About 200,000 Of The Most Severely Disabled People In Britain Will Lose £150 A Year Due To Benefit Changes. The Independent reported in December that changes to the Employment and Support Allowance (ESA) payments for people with disabilities would result in a cut of about £153 for almost 200,000 claimants “with the most severe levels of disability”:

Some of the most severely disabled people in Britain will be more than £150 a year worse off because of George Osborne's benefit changes, despite the Chancellor's pledge to “support the vulnerable”, it was claimed last night.

Mr Osborne's Autumn Statement confirms that the “support component” of Employment and Support Allowance (ESA) payments for people with disabilities will rise in line with prices. But this component covers only a third of the ESA entitlement for claimants with the greatest difficulties. The remaining entitlement will increase by just 1 per cent a year over the next three years, rather than in line with inflation. It means a real-terms cut of £44.42 a year next year, rising to £153 by 2015, for almost 200,000 claimants “with the most severe levels of disability”.

Stephen Timms, the shadow employment minister, said that Mr Osborne was “breaking his promises to disabled people”. A Treasury spokesman said ministers were committed to protecting those in greatest need, “including those with severe disabilities”. [The Independent, 12/16/12]

The Guardian's Patrick Butler: More Than 400,000 People With Disabilities Will Lose Transportation Benefits, And “May Have To Give Up Their Job.” Guardian editor Patrick Butler noted that benefit cuts would limit the transportation options of individuals with disabilities, causing them to potentially stop working:

Getting around is about to get a whole lot harder for a whole lot more disabled people - about 428,000 of them over the next five years - according to the government.

Its revised assessment of the impact of imminent disability benefit reforms shows that 150,000 more people than expected will no longer qualify for the higher rate mobility allowance payments that make it possible for them to lease an adapted Motability car.

When the government consulted on this change last year, it estimated that 280,000 disabled people would be affected by 2016. The new figure, then, is a dramatic increase, even within the new extended five year timescale, and one that means many more disabled people will now start having to get used to less freedom and independence, with profound implications for them and their families. Many thousands who rely on mobility allowance to get them to and from work may have to give up their job. [The Guardian, Cuts Blog, 1/14/13]

BBC: Research Revealed 116,000 People With Disabilities Who Work Would Risk Losing More Than £2000 A Year. The BBC cited a report that found that “around 116,000 disabled people who work will be at risk of losing around £40 per week,” or about £2000 a year:

The report argues that the changes will mean 230,000 severely disabled people who do not have another adult to assist them will receive between £28 and £58 less in benefits every week.

It also states that around 116,000 disabled people who work will be at risk of losing around £40 per week.

The report says the impact of the cuts in support for disabled children could be “extremely severe” for families currently receiving the mid-rate “care component” of the Disability Living Allowance, a payment made where a child can be severely disabled but does not need care overnight.

Of those families affected, one in 10 expressed fears that they could no longer afford their own home, while two thirds said they would have to cut back on food, and more than a half said it would lead them into debt. [BBC News, 10/17/12]