Report: Disability Claims Soar as Jobless Benefits Run Out

By Jon E. Dougherty at 20 Feb 2012

(Newsroom America) -- More Americans are filing disability claims as their jobless benefits run out, costing taxpayers tens of billions of dollars, a new report says.

The New York Post reported Sunday that, as their unemployment checks run out, many of the nation's long-term unemployed are compensating by filing claims of mental illness and other disabilities to obtain Social Security benefits.

"It could be because their health really is getting worse from the stress of being out of work," Matthew Rutledge, a research economist at Boston College, told the paper. "Or it could just be desperation — people trying to make ends meet when other safety nets just aren’t there."

The paper said that, according to recent research by JPMorgan Chase, the government was mailing out disability checks to about 10.5 million people, including 2 million to spouses and children of disabled workers, at a cost of about $200 billion annually.

The stagnant economy has grown those ranks. About 5.3 percent of the population between the ages of 25 and 64 are collecting federal disability payments, a jump of 4.5 percent since the recession hit in 2009.

In particular, mental illness claims are surging, said the Post.

Rutlege says when the economy was booming recently, 33 percent of applicants were claiming mental illness, a figure that has jumped 10 percent to 43 percent of applicants nowadays.

Analysts say they are concerned about the growing ranks on disability because once they begin receiving it, they aren't likely to ever return to the workforce.

Social Security's disability fund has been running short since 2005, and is projected to burn through its reserves by 2018, the Post said.

© 2012 Newsroom America.

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