bluecollardollar: on disability insurance

Many years ago while the site was still in its infancy, I wrote an article about disability insurance. In fact, those early readers will tell you that it was a compelling reason for starting this site. Combined with a large void in the education about investing (that was not attached to a product) and my curiosity, the search for disability insurance actually led me to a career as a writer.

What I found out then startled me. And still does. The Social Security Administration is a harsh administrator when it comes to doling out funds for the truly disabled. In numerous phone calls to offices throughout Oregon, the consensus for qualification of the disability benefit may require a death certificate positioned just below a waiting pen. The reason I asked what exactly defined disability was, at the time, the basis for my gamble on what the insurance people came to call, a Social Security Rider. This was a bet that those harsh regulations against the disabled, frequent reviews and limited appeals would play in my favor should I ever be unable to work. In other words, my insurance agency was off the hook for all but $200 of the $1200 monthly payout if Social Security declared me disabled.

Times haven't changed all that much since then with one possible exception, the purse strings are being pulled even tighter as per orders from Mr. Bush. They still hold an incredibly tight reign on the cash, a nest egg that is likely to grow smaller in the upcoming years if Washington doesn't get its collective head on and do something substantial. It is important that the government also know that we are paying premiums with each paycheck and those claims should not get harsh treatment or quick judgements.

Technology is changing jobs and in some case eliminating them. The manufacturing sector is of great concern as workers begin to reach retirement age. Older workers, especially those who have done strenuous work throughout their lives, are vulnerable to injury and possibly, before they are well enough to return to work, find that the job they did was no longer in existence. Social Security has used this job elimination standard as a way of denying benefits.

That is until the United States Court of Appeals Third Circuit in Philadelphia ruled otherwise recently. A 61 year old New Jersey woman sued the Administration over denial of benefits, first applied for when she was 54 years old, based on the way they applied them to her case. It seems Pauline Thomas was an elevator operator, a job that allowed her to work with her health problems. When she was replaced with an automatic lift, she was laid off. It was then that she applied for benefits. The Social Security argued that in order for her to receive benefits she must be able prove that she could do her prior job. In Pauline's case, that job was no longer there.

The Third Circuit ruled in favor of Ms. Thomas as she argued that her job was no longer part of the national economy. The Commissioner argued otherwise citing her inability to pass Step four in the qualification process. This excerpt appears in the ruling:

At Step Four of the sequential process, the Commissioner must determine whether the claimant can perform her past relevant work. Based on the language of the relevant provisions of the Social Security Act and the broader statutory scheme, we hold that, for the purposes of Step Four of the evaluation process, a claimant1s previous work must be substantial gainful work which exists in the national economy. Thus, a claimant may proceed to Step Five by showing either that she cannot perform her past relevant work or that the previous work is not substantial gainful work that exists in the national economy.

1. The regulations describe Steps Four and Five as follows: (e) Your impairment( s) must prevent you from doing past relevant work. If we cannot make a decision based on your current work activity or on medical facts alone, and you have a severe impairment( s), we then review your residual functional capacity and the physical and mental demands of the work you have done in the past. If you can still do this kind of work, we will find that you are not disabled. (f) Your impairment( s) must prevent you from doing any other work. (1) If you cannot do any work you have done in the past because you have a severe impairment( s), we will consider your residual functional capacity and your age, education, and past work experience to see if you can do other work. If you cannot, we will find you disabled . . . .

The statute defines disability as follows: "An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy. . . ." Thus, an individual is disabled only if "he is not only unable to do his previous work but cannot . . . engage in any other kind of substantial gainful work which exists in the national economy," i. e., any "work which exists in significant numbers either in the region where such individual lives or in several regions of the country."