Tuesday, May 13, 2014

What percentage of the working-age population receives Disability Benefits in Canada and the US?

My post on the US Social Security Disability (SSD) issue generated a lot of email.  .  Most of the feedback I got expressed disbelief that 4.7% of the population aged 18 to 64 in the US are in receipt of SSD.  A few offered theories as to why certain states would have high or low percentages of working-age residents on SSD.  Others asked if the US average of 4.7% of the working age population is low or high compared to other countries, particularly Canada, which has a similar economy and social security system.  I thought that might be interesting to examine.

The closest comparable plan to US SSD is the Canada Pension Plan- Disability benefit (CPP-D).  There is a specific but very similar plan in Quebec so data from both CPPD and the Quebec Pension Plann (QPP) have to be considered in any comparison.

Primary recipients of SSD and CPP-D are workers unable to work because of a disability from injury or disease.  SSD and CPP-D  have differences that influence who qualifies for the benefit.    CPP-D benefits are payable to workers who meet the contribution requirement (contributions to CPP in four of the last six years, or three of the last six years if there are at least 25 years of contributions), are under 65 and have a condition that meets the test of being “severe and prolonged”.  SSD in the US is designed to pay disability benefits to workers who have worked long enough to qualify and have a medical condition that  “ has prevented you from working or is expected to prevent you from working for at least 12 months or end in death." 

The qualifying years are more generous under the US SSD. The following table appears in a publication by the Social Security Administration:

The averages and maximums payable under the plans also differ significantly.  SSD  pays an average of $1,148  with a maximum of $2,642 per month in 2014.  CPP-D  provides an average of $896.87 with a maximum of   $1,236.35 per month in 2014.  [Values in US$ and Canadian$ respectively]. 

So, what percentage of the population receives SSD or CPP-D?  In Canada in 2013, there were 22,851,645 people aged 18 to 6 and an average of 234,423 CPP-D recipients... but remember Quebec, which has a similar program, had 74,893 recipients in late 2012 for a total of 309,316 disabled workers in receipt of CPP-D or the Quebec equivalent.  For Canada,  1.35% of the working age population (18 to 64) is in receipt of either  CPP-D or disability under the QPP —a significant percentage but substantially lower than the 4.7% noted for the US SS-D.

Are the top causes of disability similar? Each system classified disorders in different ways so direct comparisons are difficult.   In the US, “Mood Disorders” account for 15.1% of the SSD cases and “Musculoskeletal and Connective Tissue” account for 29.8% of SSD cases.  In Canada, “Mental Disorders” total 30% of cases while “Diseases of the Musculoskeletal System” accounted for another 23%.

Both SSD and CPP-D have some interplay with other social insurance programs including workers’ compensation.  The rules vary by state and province but there is often some reduction in benefits paid to a worker under a workers’ compensation plan when there is a benefit payable from SSD or CPP-D. 

The human and financial cost of work injury and non-work injury that removes workers from the labour force is unacceptable.  Prevention remains the best approach to reducing these costs but building resiliency, fostering greater accommodation and return to safe, durable employment are the best way forward.  

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