A study conducted by the Office of the Inspector General found that only 27 percent of people who were denied Social Security Disability Insurance (SSDI or “disability benefits”) returned to work. The study was conducted pursuant to a regular audit of the disability benefits program to assess its effectiveness and control of wasteful spending.

(Article continues below Infographic)

infographic_Returniing to Work After Being Denied Social Security Disability

The Application Process

Claimants apply for disability benefits through their respective state agencies. The state agency makes an initial determination, either approval or rejection. If the claim is rejected, the claimant may appeal the decisions to a Social Security Administration Administrative Law Judge (“ALJ”). An ALJ is similar to a regular trial court judge except ALJs sit in administrative courts, like in the Social Security Administration (“SSA”). The claimant is permitted to submit evidence and present arguments in their favor. The ALJ reviews the cases and makes a determination.

If the claimant disagrees with the ALJs reasoning, she may request a review by the SSA Appeals Council. The claimant is permitted to submit additional arguments and retain counsel to assist her through the process. The Appeals Council goes through the same deliberative process and makes a determination.

Once again, if the claimant disapproves of the result, she may file an appeal with her local federal District Court. The process then continues through the federal court system.

The Study

The researchers randomly sampled 275 cases from around 190,900 claims that were denied by ALJs. The inspectors found that 29 percent successfully appealed the decision and were receiving benefits. A further 13 percent were waiting for a decision. 23 percent of denied claimants were neither receiving benefits nor working. Eight percent were stuck in a variety of unique situations, like pending appeals for Medicare-only benefits or deceased. Finally, 27 percent were rejected and returned to work.

The results illustrate that, at least, one-quarter claimants were both rejected benefits and unable or unwilling to find work. Similarly, the study clarifies that the one-third receiving benefits were either unwilling or unable to find work.

Successfully Appealed

Of the 71 claimants that were receiving benefits, 24 obtained favorable results after appealing their decisions to the Appeals Council or District Court. Another 27 claimants filed new applications for benefits and were successful on this second attempt. The remaining claimants were denied by their state agencies but received favorable decisions by the ALJ.

Of the claimants that were receiving favorable dispositions, the majority of them suffered from back problems or affective disorders. Affective disorders are issues that affect one’s mood or emotional health, for example, schizophrenia.

After receiving an initial denial, the majority of these claimants hired outside counsel and proceeded with appellate procedures. The study identified 13 percent of claimants that were awaiting an agency decision. In most of these cases, claimants filed multiple applications and appeals. Some eventually received a different result by an ALJ, after considering age, income, health, and other factors.

Claimants that Returned to Work

The researchers identified 75 claims that were denied benefits and then returned to work. Of those 75 claims, the study identified 35 with incomes ranged from $12,400 to $66,700. These incomes are substantially above the gainful employment threshold which would have removed them from eligibility for SSDI benefits.

Furthermore, of the 35 claimants who had earnings above the threshold, 17 were denied benefits while applying for disability benefits for a back injury. The remaining 18 filed under other impairments.

Non-Working Claimants and no Benefits

The researchers estimated that 23 percent who were denied SSDI benefits failed to return to work. The researchers extrapolated, based on the 190,921 initial claims, 43,738 were denied benefits and unable to work. Of the examined claims, 63 claimants were between the ages 1 and 56 when their initial claims were dismissed.

15 of the applicants were under the age 15 and therefore too young to work, while, another 14 claimants were over 50 and unlikely to find employment. However, 33 applicants were between 18 and 49 and therefore of prime age to work. These figures seem to suggest that these people were either too injured to work or unable to acquire gainful employment.

For example, a 48-year old female alleged various back disorders linked to spinal problems, depression, and fibromyalgia, her alleged injuries should preclude her from most work, but she managed to secure a position at a hospice facility where she earned $34,800 in 2014. The ALJ denied her claim due to inconsistency in the medical record and her ability to work.

Appealing Denied Claims

This study illustrates that the denial of a claim is only the beginning of the process. There are two possible paths that claimants may follow. First, a claimant can file a new claim and address the deficiencies found in the original. Second, a claimant can continue with the appeals process.