SGA Levels Appear to Affect the Work Behavior of Relatively Few Beneficiaries, but More Data Needed
GAO-02-224: Published: Jan 15, 2002. Publicly Released: Jan 16, 2002.
The Social Security Administration's (SSA) Disability Insurance (DI) program paid $50 billion in cash benefits to more than five million disabled workers in 2000. Eligibility for DI benefits is based on whether a person with a severe physical or mental impairment has earnings that exceed the Substantial Gainful Activity (SGA) level. SSA terminates monthly cash benefit payments for beneficiaries who return to work and have earnings that exceed the SGA level--$1,300 per month for blind beneficiaries and $780 per month for all other beneficiaries. GAO found that the SGA level affects the work patterns of only a small proportion of DI beneficiaries. However, GAO also found that the SGA may affect the earnings of some beneficiaries. About 13 percent of those beneficiaries with earnings near the SGA level in 1985 still had earnings near the SGA level in 1995, even though the level was increased during that period. The absence of key information identifying the monthly earnings of beneficiaries, their trial work period status, and whether they are blind limited GAO's ability to definitively identify a relationship between SGA levels and beneficiaries' work patterns. Data limitations also make the effect of the SGA on DI program entry and exit rates difficult to isolate. Although the rate of program entry increased in the years immediately following a 1990 increase in the SGA level, it then gradually declined to a level below the pre-1990 entry rates. Since 1990, DI exit rates continue to be driven largely by beneficiary death and conversion to retirement benefits. However, the percentage of all exits caused by improvements in medical conditions or a return to work increased slowly, from 1.9 percent in 1985 to 9.2 percent in 1996, and then rose dramatically to 19.9 percent in 1997. A substantial increase in the number of continuing disability reviews done by SSA may account, in part, for this 1997 upturn, but data limitations preclude GAO from obtaining a full understanding of the link between the SGA and exit behavior.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: Starting in late 2002 and continuing into 2003, the Social Security Administration (SSA) implemented a new automated system--called the Disability Control File--for collecting data on the work activity of Disability Insurance beneficiaries, including data on their earnings and benefit status in relation to the Substantial Gainful Activity level. According to SSA officials, the system was created to keep better track of disability program beneficiaries in a more integrated manner for evaluation and operational purposes. SSA believes that this system will provide a basis for the agency to comprehensively monitor the status of disability cases, including beneficiary work activity and earnings.
Recommendation: The Disability Insurance (DI) program, program beneficiaries, policy makers, and the general public could all greatly benefit from the collection of data that would facilitate a more comprehensive analysis of critical employment and program policy issues. Therefore, the Commissioner of the Social Security Administration (SSA) should take action to identify the full range of data necessary to assess the effects of the Substantial Gainful Activity (SGA) on DI program beneficiaries, develop a strategy for reliability collecting these data, and implement this strategy in a timely manner, balancing the importance of collecting such data with considerations of cost, beneficiary privacy, and effects on program operations. In GAO's study, it noted several key data elements that would be needed for a comprehensive assessment of the effects of the SGA level on program beneficiaries. These include data that identify the monthly earnings of beneficiaries and whether a beneficiary is blind, is participating in a trial work period, or has exited the DI program based on a return to work. Some of these data, such as information identifying whether a beneficiary is blind or is participating in a trial work period, is already collected by SSA but is not reliably recorded and maintained in SSA's principal DI program data base. Other information, such as monthly earnings data, may be difficult to collect and involve data issues that extend beyond the DI program. There may also be additional information, beyond the data elements GAO discussed, that SSA may consider necessary for assessing the effects of the SGA.
Agency Affected: Social Security Administration