Get access

The impact of changing financial work incentives on the earnings of Social Security Disability Insurance (SSDI) beneficiaries

Authors

  • Robert R. Weathers II,

    1. Deputy Associate Commissioner of the Office of Program Development and Research within the Social Security Administration, 128 Altmeyer Building, 6401 Security Blvd., Baltimore, MD
    Search for more papers by this author
  • Jeffrey Hemmeter

    1. Economist, Office of Program Development and Research, Social Security Administration, 3-C-25D Operations Building, 6401 Security Blvd., Baltimore, MD
    Search for more papers by this author

Abstract

SSDI beneficiaries lose their entire cash benefit if they perform work that is substantial gainful activity (SGA) after using Social Security work incentive programs. The complete loss of benefits might be a work disincentive for beneficiaries. We report results from a pilot project that replaces the complete loss of benefits with a gradual reduction in benefits of $1 for every $2 earned above an earnings disregard level. Beneficiaries who volunteered to participate in the project were randomly assigned to a group receiving the new program or to a control group. The policy led to a 25 percent increase in the percentage of beneficiaries with earnings above the annualized SGA amount, or $11,760 in 2009 dollars. It did not result in a reduction in benefit payments. © 2011 by the Association for Public Policy Analysis and Management.

Ancillary