Social Security benefits do not meet the needs of most older Americans with disabilities

When the Social Security Act was passed in 1935, it came on the heels of the Great Depression. A large cohort of older Americans were struggling to cover the cost of even basic needs. But, even after Social Security benefits began to flow, for more than two decades, many older Americans continued to struggle financially, reports David Weaver for Real Clear Markets.

Back in 1959, with Social Security, more than a third of older adults were living in poverty. Social Security still offered limited benefits. Benefits were smaller than state-based programs designed to help older Americans back in 1950.

Then, over the course of ten years, the federal government expanded Social Security coverage and benefits. Now, fewer than 10 percent of older adults live in poverty.

So, is there a retirement crisis? Some economists on the right argue no. Other economists believe that there is a retirement crisis. Weaver argues that the retirement crisis for some older adults is related to disability.

People with disabilities lose their Social Security Disability Income (SSDI) when they turn 67, their full retirement age. They receive Social Security benefits based on their age, not their disability. The amount of their benefits does not change. About fifteen percent of older adults receiving Social Security benefits received Social Security benefits before they turned 67.

The cost of living is far higher for people with disabilities over 67 who receive Social Security benefits. As a result, they are more likely to live in poverty or near poverty. Nearly 60 percent of them are poor (17 percent) or near poor (40.4 percent). In stark contrast, about 20 percent of everyone else receiving Social Security lives in poverty (5.7 percent) or near poverty (14.8 percent).

Nearly three in ten people with disabilities over 67 struggle to afford basic needs, including food, housing, electric and more. That’s almost three times the proportion of other people receiving Social Security who struggle paying for basic needs (11 percent).

The contrast in wealth among people with disabilities over 67 and everyone else is exceptionally stark. People over 67 who did not have Social Security Disability Income have more than six times as much wealth ($236,000) as people who were receiving SSDI before turning 67 ($38,000). It is more than likely that people’s disabilities earlier in life keep them from accumulating wealth.

Expanding Social Security is crucial to moving millions of older Americans out of poverty. People with disabilities over 67 are in particular need of expanded benefits. To end poverty among older Americans and people with disabilities, policymakers could also strengthen the Supplemental Security Income program to bring its benefits to the federal poverty level.

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