Washington, D.C.—Reform SSDI Now, a project of Our Generation, is releasing a new report exposing some of the worst cases of fraud and abuse of our Social Security Disability Insurance (SSDI) program. The report, 10 Outrageous Examples of Social Security Disability Fraud, outlines some of the most outrageous examples of Social Security disability fraud uncovered in recent years.
“Social Security Disability Insurance is meant to provide assistance to Americans who are unable to work due to physical or mental disabilities. Unfortunately, 8.9 million Americans now collect disability benefits, and this well-intentioned program has ballooned into a $135 billion bureaucracy rife with waste, fraud and abuse,” said MacMillin Slobodien, Executive Director of Our Generation.
“All too often, the Social Security Administration fails to weed out legitimate disability claimants from those who are capable of working and are attempting to defraud the system by receiving regular income without having to get a job.
As a result, countless Americans are scamming SSDI by collecting taxpayer-funded disability benefits improperly. This fraud and abuse harms taxpayers and threatens to deprive the truly disabled as SSDI faces the threat of future insolvency.”
Examples of Social Security Disability Insurance Fraud:
- Minnesota man who faked dementia to collect nearly $7,000 per month in benefits totaling more than $144,000;
- Missouri politician who improperly received more than $50,000 in disability payments while serving as a state legislator;
- California healthcare professional who invented bogus maladies and provided false information to help scores of patients receive $1.5 million in disability benefits;
- A Social Security worker and a gaggle of doctors in Puerto Rico alleged to create such a large and sophisticated system for defrauding the federal government of Social Security disability benefits that likely totaled $6 million;
- A man who illegally entered the United States and posed as a disabled Vietnam war hero to swindle Americans out of more than $128,000 in Social Security disability funds.
The Reform SSDI Now campaign is providing citizens with information to understand this crisis and the tools to demand action and real reform from policy makers—including compelling reports on this crucial issue and an online action center to contact members of Congress and report fraud in the SSDI system.
Despite its humble beginnings as an insurance plan for long-tenured workers with the misfortune of becoming disabled before retirement, SSDI has ballooned into a $135 billion behemoth threatening to collapse under its own weight, and to take a bite out of Medicare on the way down. As Our Generation’s previous report, Drivers of SSDI Growth, demonstrates—left unchecked, decades of loose standards and poor enforcement may soon culminate in thousands—if not millions—of deserving recipients being deprived their rightful benefits.
When introduced in 1956, SSDI provided benefits only for permanently disabled workers over the age of 50 with a substantial work history. Over time, this program has grown dramatically, and today the fastest-rising cost for Social Security is not the retiring Baby Boomers but skyrocketing Disability Insurance benefits.
As Our Generation has argued in a previous study, Social Security Disability Insurance: An Entitlement In Need of Reform, SSDI requires urgent action and meaningful reform:
In 1970, the Disability Insurance program could be financed with a payroll tax rate of only 0.8 percent of wages; today, the cost of SSDI has tripled relative to the 1970 level. Disability benefits now make up 18 percent of all Social Security costs, up from only 10 percent in 1990. In fact, the number of people on SSDI in 2012 exceeded the entire population of New York City at approximately 8.9 million participants.
The principal drivers of SSDI growth are a loosening of eligibility requirements, increasingly attractive benefits, and an applications process that has become incapable of distinguishing between truly disabled workers and those who should be rejected. As Drivers of SSDI Growth demonstrates, these three effects have combined to create a modern SSDI very different from the one envisioned by its architects. Going forward, it is essential that Congress take significant steps to rein in SSDI’s growth. To do nothing—to continue to prioritize the able bodied over the truly infirm—is far worse.
Part of the solution to rising SSDI costs is to tighten eligibility requirements to focus resources on the most disabled individuals, coupled with incentives to employers to keep disabled individuals working and therefore out of the program. Some proposed reforms have included the following:
- Tighten eligibility requirements and conduct Continuing Disability Reviews of existing beneficiaries to reassess their disability status;
- Include greater oversight power for the Social Security Administration by administrative law judges who make SSDI decisions;
- Add “experience rating” for disability payroll taxes so employers who can keep individuals with disabilities on the job will be rewarded with lower taxes, while those who shift workers onto SSDI will pay more;
- Require employers to carry private disability insurance to cover benefits for a short period until Social Security SSDI takes over.