National Disability Coalition (Winter 2015)

GBO: Flexibly Encouraging Work and Preserving Economic Security

Determining which SSDI applicants could or could not work under myriad medical conditions, an improving and expanding range of assistive devices, shifting labor market conditions, and changing social and legal environments is becoming increasingly difficult. This, naturally, leads to an imperfect disability determination system and several studies suggest that SSDI allows many work-capable individuals onto the system.


The Generalized Benefit Offset (GBO) system that is proposed here for SSDI would provide a backstop to avoid the poor economic outcomes that such decision errors cause -- both for beneficiaries and for the economy. It does so by providing much stronger work incentives to beneficiaries who could work -- or, if working already, could increase their work and earnings -- than anything attempted to date. And it does so in a manner that fully preserves the economic security that SSDI provides to beneficiaries who cannot work and earn sufficiently to support themselves.


GBO includes two benefit components -- one to provide a safety net for those who cannot work and the other to reward earnings. Both are adjusted each month depending on observed past earnings of SSDI beneficiaries.


GBO's benefit system would fully protect beneficiaries by eliminating benefit cessations because of earnings. Only a documented medical improvement could result in a benefit termination under GBO.


This post-entitlement SSDI reform is designed to provide SSDI beneficiaries the freedom to choose how much to work and when -- depending on their health status and labor market conditions. GBO would be an improvement over SSDI's current benefit structure that punishes those who work at or above substantial gainful earnings by taking away the program's safety net support permanently. This is a non-starter for SSDI beneficiaries in terms of motivating them to exit the program by returning to work because they perceive and face much larger prospective health and job-market risks.


Details about operations, decisions, and outcomes under the current system and about GBO's alternative benefit structure, implementation issues, and likely advantages are available in the attached article.


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