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.  

Are disabled workers a significant proportion of the working-age population?

Our economy needs skilled and able workers to deliver the goods and services we need locally and provide internationally.  When a worker becomes disabled through work injury or other cause, there is one less member of the working age population capable of and able to participate in the labour force. 

At any given time, there are workers off work because of a work-related injury, illness or occupational disease; other workers are out of the labor force due to non-work related causes.  Whether the cause is work-related or not, in most cases, disabling conditions resolve to the point where a worker is again able to return to work.  The remaining individual must live with an impairment that may be a significant barrier to continuing in the labor force.  This is not just an issue of an individual and his or her family having to bear physical and mental suffering, society losses the skills, knowledge and abilities of a proven human resource—something that can impact local communities and national economy. 

For worker covered by workers’ compensation, work-related financial impacts can be offset in part by temporary and permanent income compensation.  For all workers, there may be access to other social insurance programs such as US Social Security – Disability benefits and Canada Pension Plan – Disability benefits.

In the US, Social Security Disability (SS-D) benefits are available to workers who become disabled.  Most people who receive disability benefits are workers.  Of the 10,088,739 recipients of SS-D in December 2012, about 87.5% of them were workers.  Nearly $10 billion a month gets paid out to workers who must now depend on SS-D. 

We normally think of the labor force as being drawn from the resident population aged 18 to 64.  Restricting SS-D recipients to that same age range means there are 9.3 million Americans or 4.7% of the population aged 18 to 64 were on SS-D in 2012.  The vast majority of these SS-D beneficiaries were workers who are unable to work and contribute to building a vibrant economy. 

That 4.7% is an average for the whole country.  The distribution of SS-D recipients varies by state. The following table is derived from the Annual Statistical Report on the Social Security Disability Insurance Program, 2012 [table 8]:

Number aged 18–64 as a percentage of the resident population aged 18–64,
by declining percentage by state, December 2012

	Resident population a	Beneficiaries
		Number	Percentage of resident population
West Virginia	1,159,423	104,406	9.0
Alabama	2,998,237	250,301	8.3
Arkansas	1,795,660	149,632	8.3
Kentucky	2,747,524	225,529	8.2
Mississippi	1,835,518	144,398	7.9
Maine	836,898	63,333	7.6
Tennessee	4,043,720	268,443	6.6
South Carolina	2,948,174	189,251	6.4
Missouri	3,735,332	235,374	6.3
Michigan	6,173,776	380,524	6.2
Louisiana	2,888,885	173,283	6.0
Vermont	403,616	24,198	6.0
New Hampshire	852,075	49,925	5.9
Rhode Island	675,189	39,715	5.9
Oklahoma	2,343,210	135,431	5.8
North Carolina	6,117,676	349,592	5.7
Indiana	4,056,709	221,264	5.5
Pennsylvania	7,981,289	438,294	5.5
Ohio	7,175,429	378,923	5.3
New Mexico	1,276,263	66,763	5.2
Delaware	571,568	28,909	5.1
Massachusetts	4,286,235	217,351	5.1
Florida	11,805,373	565,421	4.8
Montana	624,872	29,767	4.8
Wisconsin	3,584,341	173,441	4.8
United States	197,040,596	9,306,256	4.7
Georgia	6,290,121	295,892	4.7
Idaho	956,497	45,118	4.7
Kansas	1,767,332	80,876	4.6
Oregon	2,457,110	112,691	4.6
Iowa	1,880,928	84,657	4.5
New York	12,549,535	565,836	4.5
Virginia	5,266,625	227,060	4.3
Washington	4,403,628	185,482	4.2
Arizona	3,960,828	162,630	4.1
South Dakota	507,002	20,764	4.1
Illinois	8,116,753	321,189	4.0
Minnesota	3,373,224	135,566	4.0
Nebraska	1,134,766	45,737	4.0
Connecticut	2,264,077	89,371	3.9
New Jersey	5,587,651	215,599	3.9
Texas	16,234,269	610,238	3.8
Wyoming	365,414	13,556	3.7
Maryland	3,777,744	135,798	3.6
Nevada	1,734,434	62,961	3.6
North Dakota	444,354	15,680	3.5
District of Columbia	450,954	15,374	3.4
Colorado	3,342,983	108,554	3.2
California	24,201,126	762,133	3.1
Utah	1,695,896	50,916	3.0
Alaska	481,852	13,848	2.9
Hawaii	878,501	25,262	2.9

[Footnote to original table]  SOURCES: Social Security Administration, Master Beneficiary Record, 100 percent data; Census Bureau, 2012 resident population.

NOTE: Data exclude U.S. territories and other areas

Population estimates for the United States as of July 1, 2012, as reported by the Census Bureau.

CONTACT: (410) 965-0090 or statistics@ssa.gov

The profile of the average worker on SS-D in 2012 was a male (53%) average age was 53 receiving an average monthly benefit of $1,134.86. 

Not everyone on SS-D is there permanently, although many are.  You may have the image of a worker on SS-D as having catastrophic and permanent physical impairments.  Some recipients have disabilities that could be described that way but a third of them have a primary disability related to mental disorders.  Another 30% have a primary diagnosis related to “muskulo-skeletal and connective tissue”.   Some are expected to get better or for their medical disability to improve and allow a return to work; about 70,000 workers terminated their SS-D benefits for these reasons in 2012 [table 50 in the 2012 Annual Statistical Report]

Preventing injury that leads to permanent disability remains the number one priority but more needs to be done to prevent workers who develop or incur impairments from becoming permanently disabled.  Disability is largely a societal issue; the lack of accommodation, failure to foster resiliency and the inability (or resolve) to overcome systemic barriers are perhaps greater contributors to the mounting human and economic costs. 

I don’t know all the reasons for the wide disparity in SS-D recipient rates across states. Why, for example, does Virginia have an SS-D worker recipient rate that is less than half that of West Virginia?  No doubt some of the variation can be accounted for by the demographics of the state population.  Perhaps some states are more proactive in prevention and accommodation thus obviating the need for income support for SS-D.  If you have the answer, share it!  Post a comment or send me an email.   

Workers' Compensation and Social Security Disability Insurance

I spent part of last week in Washington, DC at a seminar sponsored by the National Academy of Social Insurance and the U.S. Social Security Agency. The seminar focused on the fact that many of the clients served by both workers’ compensation (WC) and social security (SS).

My role in the conference was to provide a Canadian perspective and some insights into how Canadian public policy makers are dealing with the overlap between workers’ compensation and social security. More importantly, my hosts were interested in the innovations Canadians are bringing to the return-to-work priority both systems share for the clients who may be able to overcome the barriers to gainful re-employment in the labour force.

The research is pretty clear: early intervention improves return to work outcomes. Typically, access to services to assist in an early return to work (RTW) is more associated with workers’ compensation than Social Security Disability Insurance (SSDI) or Canada Pension Plan-Disability (CPP-D). Consequently, public policy that increases the scope of coverage for WC tends to increase access to programs and services of this population that would not otherwise have such access. Since many of those who are outside the scope of WC coverage (for example, some jurisdictions exclude, domestic workers, out-workers, farm labourers and self-employed from coverage) are workers who may have limited access to alternative employment, any expansion of WC coverage that includes these populations has the potential to help some of the most vulnerable workers return to work.

In my presentation, I noted that some jurisdictions have mandatory reinstatement provisions in their WC legislation. These provisions require an employer to take an injured worker back to employment. Some jurisdictions go further and require the employer to accommodate the worker to the point of “undue hardship”—a significantly higher test than mere ‘reasonable accommodation’. The big stick of legislation is not unique to some Canadian jurisdictions. Many Australian jurisdictions, for example, require employers to return injured workers to employment.

Since WorkSafeBC’s legislation contains no direct mandatory reinstatement provision, other approaches are emphasized. For example, WorkSafeBC offers a rebate of premiums to employers who qualify for a Certificate of Recognition. After substantiating through an audit that a firm has a prevention program in place that exceeds the regulatory minimum and has an injury management/Return to Work program in place, the firm may qualify for a 15% rebate. This can provide a substantial carrot to get and keep the attention focused on primary prevention and disability management that may help all workers—not just those who may suffer a work-related injury.

In the question and answer session, I was asked how WorkSafeBC is financed and how this compares with the typical US workers’ compensation insurer. I noted that WorkSafeBC is the exclusive insurer of work-related injury, the sole adjudicative authority, policy maker, workplace health and safety regulator and inspectorate for the province (like OSHA in the US). WorkSafeBC is funded by premiums that average about $1.56 per $100 of assessable payroll and that premium covers all WorkSafeBC’s functions (in the U.S., the quoted base or book rate may not reflect assessments or levies that finance research, oversight, appeals, and state-OSHA costs).

In follow-up questions, I was asked what I meant by assessable payroll. In many places, workers’ compensation rates apply to total payroll as opposed to the limit WorkSafeBC and most other Canadian WC boards place on payroll per person (currently $68,500). If we stated WorkSafeBC’s premium in terms of total payroll, we estimate the rate would come in at about $1.33 per $100 of payroll.

It was clear from the interest expressed in questions both during and following the session that many of the researchers in the audience were intrigued with the apparent low cost, relatively high benefits and strong return-to-work outcomes achieved in British Columbia for our workers and employers. If you are interested in seeing the presentations from this event, you will find them posted on the past events section of the NASI.org site...look for the November 18, 2009 seminar listing.