Brenda Powell had a stroke and was in great pain when she called the Social Security Administration last year asking for disability benefits.
The former Louisiana state office worker sometimes struggled to write her name or hold a glass of water. Powell, then 62, thought she could no longer work, and worried about how to pay for Medicare with a monthly pension of only $433.
Although the Social Security Administration agreed that Powell’s condition limited the work she could do, the agency denied her initial application for SSI. She had the option of appealing that decision, which could take months or years to resolve, or early retirement. The latter option would give her $302 a month now, but it could permanently reduce the full Social Security retirement payments she’ll be eligible for at age 66 and 10 months.
“I didn’t know what to do. These decisions aren’t easy,” said Powell, who lives in Alexandria, Louisiana, 200 miles northwest of New Orleans. She decided to appeal the decision but decided to take early retirement in the meantime.
“I should have had more money to pay my bills,” she said. “I have nothing left for gas.”
Each year, tens of thousands of people who are disabled and unable to work consider taking early retirement benefits from Social Security. The underfunded federal disability system admits it suffers from delays and dysfunction, even as more than a million people await a decision on their benefit application.
The United States, which has one of the least generous disability programs among developed Western nations, denies most initial claims, leaving applicants to endure lengthy appeals procedures.
At the same time, Social Security agents may neglect to explain the financial downside to taking retirement benefits too soon, said attorneys who help patients file disability claims. The result is a growing vulnerable population who feel stuck between the proverbial rock and a hard place – to live with little money while they wait or agree to pay much less for the rest of their lives.
said Charles T. Hall, a Raleigh, North Carolina-based disability attorney: “They don’t have the luxury of waiting.” “The vast majority of people need the money now, and you can get early retirement benefits in two months or less.”
In a country where more than a quarter of the population has a disability, Social Disability Insurance and Supplemental Security Income programs aim to provide financial assistance to people who cannot work.
Retirement experts generally recommend that seniors take advantage of their Social Security benefits as late as possible, to increase the amount of money they receive from the federal government. For someone born after 1960, getting benefits at age 62 — the early age qualifies — instead of 67 reduces each monthly payment by up to 30% for the rest of the person’s life, said Richard Johnson, senior associate and director. of the Retirement Policy Program at the Urban Institute, a nonprofit research organization.
A person applying for Supplemental Security Income, or early retirement, will get $914 per month if they can prove they are over 65, blind, or have a disabling medical condition. Social Security Disability Insurance pays an average monthly benefit of $1,483 to those who suffered a disabling injury or illness and paid federal tax deducted from their paychecks in the past.
Social Security agents inform people of their ability to receive early retirement benefits. But they may not explain the downsides, said Sam Baker, CEO and founder of Atticus, a California-based group that connects people seeking disability benefits with attorneys across the country. His organization found that among a sample of 765 clients ages 62-66 seeking Social Security disability insurance, 44% were taking early retirement.
Handicap takes a long time, Baker said, and the decision about who gets approved can seem haphazard. “Unreliable,” he said.
An initial decision on an application for disability benefits can take an average of more than seven months, according to a March letter signed by more than 100 members of Congress.
Most Social Security Administration callers are unable to reach an agent, the letter said, and people seeking local field office assistance with an application can wait at least a month for an appointment.
Earlier this year, Acting Social Security Commissioner Kilolo Kijakaze warned in a letter to congressional leaders that months-long delays in processing disability and telephone assistance applications are likely to worsen in 2023, even as officials pledge to improve the service over time.
In a written statement, Social Security Administration spokesman Darren Lutz acknowledged that wait times are “extremely long,” citing inconsistent, inadequate funding, staffing shortages, and other challenges. The agency declined to provide officials with a phone call to discuss the issue in more detail.
At the center of the dysfunction are disabled people with little or no income, who often retire early because they struggle to pay for basics like housing, food, and medicine. In some cases, people end up homeless or die while waiting for disability benefits, attorneys told KFF Health News.
The problems can be affected particularly severely in the South and Appalachia, as these regions tend to have an older workforce than most other parts of the country, more workers in manufacturing, and people with lower educational attainment who tend to rely more heavily on disability benefits.
“It’s a system in crisis,” said Ida Comerford, managing partner of the law firm Kenneth Heller, which handles disability issues in New York, Michigan and Illinois. “This isn’t going to cut it. It’s the worst I’ve ever seen.”
The Social Security Administration said its workers are required to notify applicants of all benefits they can receive and provide enough detail for them to make an informed decision.
For someone with no income and no ability to make ends meet, it might make sense to take early retirement benefits, said Kurt Czarnowski, a former Social Security Administration regional communications director who now works as a retirement counselor.
If a person has a medical condition that indicates a short life, Czarnowski said, it may be wise to consider making smaller payments now rather than waiting for larger checkups later.
But Chernovsky notes that there is a huge financial advantage to those who can wait.
People born after 1960 can get full retirement benefits at age 67. In addition, each year they wait to collect Social Security between ages 67 and 70, their monthly check increases by 8%.
“In the end, it’s a longevity decision,” Czarnowski said.
Hall also said he advises some clients to take early retirement benefits while applying for disability. If a person wins a disability case, he said, they can still collect their full retirement benefits instead of the reduced amount.
But Baker, of Atticus, said strategy comes with risks. Most applicants need an attorney to help get the disability through the lengthy appeals process. But he said attorneys are less likely to take on a client who already receives early retirement benefits because that scenario greatly reduces the money they can make on a case.
More than 60% of SSI applications are denied, according to the Center on Budget and Policy Priorities, a nonprofit research organization. The organization says about two-thirds of Social Security disability insurance applications are rejected.
Six months after filing her application, the Social Security Administration notified Powell in a letter in February that her SSI claim had been denied. The letter stated that while medical evidence showed her condition limited her ability to hold a job, she could undertake work consistent with her skills as a financial assistant.
Lutz, a Social Security spokesperson, said in a written statement that privacy laws prevent the agency from answering questions about Powell’s case. Lutz said the agency uses a “strict definition of disability.”
Powell has hired an attorney and filed an appeal, but does not know when the case will be resolved.
“I don’t want to say ‘poor, poor thing,’” Powell said. “It wasn’t easy. I wouldn’t wish this on anyone.”
This article has been reprinted from khn.org Courtesy of the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization not affiliated with Kaiser Permanente.