The recognition of the hardships created by a worker's loss of earnings due to disability dates back to the original Social Security Act of 1935. The Act was designed to provide income security for workers and provided for the general welfare by establishing a system of Federal old-age benefits.
The enactment of this law on August 14, 1935, introduced a new concept, a broad national social insurance system, to the American people. In ddition to several provisions for general welfare, the Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement. As originally conceived, the Social Security program was limited to insuring only industrial and commercial employees against loss of income at retirement age. About one half of the nation's entire labor force was covered by the program, but the original Act provided only retirement benefits and only to the worker. The Act also enabled States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health. The Act also allowed the States to administer unemployment compensation laws and to raise revenue.
The 1939 Amendments added two new categories of benefits: payments to the spouse and minor children of a retired worker (so-called dependents benefits) and survivor's benefits paid to the family in the event of the premature death of a covered worker. This change transformed Social Security from a retirement program for workers into a family-based economic security program. Before the enactment of the 1954 disability provisions, an individual's retirement benefit or the benefits payable to survivors on the worker's death could be reduced or lost entirely due to a lack of earnings during periods of long-term total disability because eligibility for benefits depended upon at least a minimum period of work in covered periods of employment or self-employment, and benefit amounts were related to an individual's average earnings.
In 1954, Congress enacted the provisions for a period of disability (often called the "disability freeze") which is similar to the waiver of premium" provisions common in life insurance. Under this provision, a qualified individual's earnings record could be "frozen" and future benefits computed without considering periods of severe, long-term disability. An individual was considered disabled for purposes of the disability freeze under the 1954 provisions if unable to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment that could be expected to be of long-continued and indefinite duration or to result in death. Even though an individual was able to engage in SGA, the individual was still able to qualify for the freeze if the impairment was blindness as defined by statute. The law also contained a "drop-out" provision that was available to most insured individuals, whether disabled or not. Under this provision, as many as 5 years during which a person's earnings were low or during which there were no earnings could be dropped when computing benefits. This provision minimized the effect on benefits from periods of unemployment or low earnings while not under a disability.
The 1956 Social Security Amendments provided monthly disability insurance benefits (DIB) for eligible disabled individuals age 50-64. DIB was first payable for July 1957, with cash benefits for auxiliaries beginning September 1958. This legislation retained the definition of disability for the period of disability provided under the 1954 legislation, with the exception that persons who met the statutory definition of blindness but were able to engage in SGA were not eligible for DIB. Usually the disability benefit was based on the amount of retirement insurance benefits (RIB) the individual would be entitled to if age 65 were attained at onset of the disability. The 1956 legislation also provided monthly benefits, effective January 1957, for disabled children (age 18 or over) of retired or deceased individuals, provided the child's disability began before age 18. The 1958 Amendments provided for the payment of benefits to qualified dependents of individuals receiving DIB. This brought the disability provisions more closely in line with the provisions applicable to retirement and survivors insurance benefits.
The 1960 Amendments eliminated the "age 50" limitation for receipt of monthly disability benefits. Beginning with November 1960, benefits have been payable to eligible disabled individuals under full retirement age and to their dependents. When an individual receiving disability benefits reaches full retirement age, DIB is converted to RIB. The attainment of full retirement age ordinarily has no effect on the amount of the benefit. Full retirement age used to be age 65 but now is some point after age 65, depending on the Year of Birth of the individual.
The 1965 Social Security Amendments changed the requirements for the disability freeze and for DIB. The requirement that a worker's impairment must be expected to be of long-continued and indefinite duration was eliminated. Instead, the legislation provided that an insured individual would be eligible for a disability freeze and benefits if unable to engage in SGA by reason of any medically determinable physical or mental impairment which lasted or was expected to last for a continuous period of at least 12 months or result in death. This liberalized duration requirement was also made applicable for childhood disability benefits (CDB) claims. The provision that previously precluded entitlement to a period of disability after entitlement to a reduced retirement-age insurance benefit before age 65 was also eliminated. Under this Amendment, the amount of the subsequent DIB was reduced by an actuarial factor related to the number of months the individual was previously entitled to reduced retirement-age benefits. Also, the period during which an application for DIB is valid was expanded. Under the 1965 Amendments, an applicant did not have to be disabled at the time of filing, but must have met the requirements for a period of disability and entitlement to DIB either: Within 12 months prior to the month of filing; or by the date of the final determination or decision on the claim. (At each step of the adjudicative and appellate process, the notice of determination or decision sent is final, unless the applicant timely invokes the right to appeal the determination). The provisions pertaining to statutory blindness were amended to provide a special insured status alternative where the individual became statutorily blind before age 31. Also, the definition of disability was revised to include an occupational definition of disability for individuals age 55-64 that are statutorily blind. Individuals in this age group who met the requirements of statutory blindness would be entitled to benefits if they were unable by reason of blindness to engage in SGA requiring skills or abilities comparable to those required in their past occupation or occupations. However, no payment would be made for any month in which they actually engaged in SGA. The 1965 Amendments also provided for a worker's compensation (WC) offset provision. This provision required that DIB for persons under age 62 be offset by the amount of WC payments in accordance with a formula established by law. This provision was applicable for DIB beginning no earlier than January 1966, based on onsets established after June 1, 1965.
The 1967 Amendments retained the previous definition of disability but added language that clarified the definition. The amended definition was applicable to disabled workers and childhood disability claimants. The Amendment specified that individuals would be determined to be under a disability only if the physical or mental impairment or impairments were of such severity that they were not only unable to do their usual work ,but unable, considering age, education, and work experience, to engage in any other kind of SGA work which existed in the national economy; regardless of whether such work existed in the immediate area in which they lived, or whether they would be hired if they applied for work. The statute also specified that work which exists in the national economy meant work which existed in significant numbers either in the region where the individuals lived or in several regions of the country. The phrase physical or mental impairment was defined to mean an impairment that results from an anatomical, physiological, or psychological abnormality demonstrable by medically acceptable clinical and laboratory diagnostic techniques. The 1967 Amendments also extended cash benefit protection to disabled widows (including surviving divorced wives) and disabled dependent widowers (of insured workers), age 50 and over, if they met a special definition of disability. The benefits were reduced depending on the age at which entitlement began. The widow(er) must have become totally disabled before or within 7 years after the spouse's death, or, in the case of a widowed mother, before or within 7 years after the end of her entitlement to benefits as a mother. A widow could also become reentitled to benefits if she became disabled again within 7 years after her previous disability ended. The alternative insured status requirement provided under the law for workers disabled by blindness before age 31 was extended to all workers disabled before age 31, regardless of the nature of their disability; the less strict test of central visual acuity of 20/200 or less was substituted, for disability freeze purposes, for the previous definition of blindness, which required central visual acuity of 5/200 or less; this definition was also applicable, for benefit purposes, in the case of the blind worker age 55 or over who met the alternative (occupation-type) definition of disability; the definition of average current earnings for computing WC offset was liberalized so that actual earnings, in excess of the maximum, for the highest 5 consecutive years after 1950 could be used to compute the offset. The 1967 Amendments also extended the time limit for filing an application to establish a period of disability to 36 months after the month of cessation of disability in cases where the claimant's failure to file a timely application was due to physical or mental incapability.
The 1972 Amendments reduced the waiting period for a worker or widow(er) from 6 to 5 months. This reduction in the waiting period was intended to diminish the financial hardships faced by those disabled beneficiaries who have little or no savings or other resources to fall back on during the early months of disability. The 1972 Amendments provided that the assistance programs administered by the States (Old Age Assistance, Aid to the Blind, and Aid to the Permanently and Totally Disabled) be federalized and replaced with the Supplemental Security Income (SSI) Program, with uniform national eligibility requirements and payments beginning in January 1974. This program replaced varied State and local welfare programs with uniform national eligibility requirements. This program provides need-based benefits for aged, disabled or blind adults, and blind or disabled children. In addition to monthly payments, SSI beneficiaries may also be eligible for food stamps and Medicaid (special State administered medical assistance).This legislation also increased the age for beginning eligibility to Childhood Disability Benefits (CDB). It provided for monthly benefits, effective January 1957, for disabled children, age 18 or over, of retired or deceased individuals, provided the child's disability began before age 22. The 1972 Amendments provided that DIB (and dependent benefits based on a worker's entitlement to disability benefits) be paid to the disabled worker's survivors if an application for benefits was filed within 3 months after the worker's death. This provision took into consideration those few cases where an eligible worker died before he/she could file an application for disability benefits, or a period of disability could not be established unless an application (or, under certain conditions, a written statement of intent to claim benefits) was filed during the worker's lifetime. This provision was not applicable to disabled children or widows. An adult disabled in childhood became reentitled to CDB if he/she again became disabled within 7 years after his/her benefits were terminated as a result of a substantial gainful employment or medical recovery. This provision gave protection to childhood disability beneficiaries comparable to that for disabled widows and widowers who become reentitled to benefits if they again become disabled after recovering from an earlier disability. The reentitlement period begins with the month following the last month of previous entitlement to CDB and ends with the close of the 84th month (7 years) following the month his/her most recent entitlement to childhood disability terminated. The reentitlement provisions also provided that a child could again be entitled to CDB if onset of disability was within the 84 month reentitlement period and: The child was statutorily blind; Age 55 or over; and Engaging in SGA which was not comparable to that performed either before age 55 or the date the child became statutorily blind, whichever was later.
Under the 1972 Amendments, a statutorily blind worker was not required to meet the requirement of substantial recent work (the 20/40 test or alternative for young workers) in order to be insured for DIB or a disability freeze. The statutorily blind claimant must have been fully insured when the definition of statutory blindness was met. This Amendment was not applicable to those visually impaired workers who did not meet the statutory definition. An individual was fully insured if he/she had as many quarters of coverage, regardless of when acquired, as the number of calendar years elapsing after 1950 (or the year of attainment of age 21, if later) up to, but not including the year in which he/she became statutorily blind. He/she could not be fully insured with less than 6 quarters of coverage, but no more than 40 quarters of coverage would ever be required.
The 1972 Amendments authorized an increase in the percentage of monies available for reimbursement to State vocational rehabilitation (VR) agencies for rehabilitation services provided to disabled beneficiaries. The fiscal year limit on such expenditures was 1-1/2 percent of the disability benefits paid during the previous year. This provision, which increased the percentage available from 1-1/4 for fiscal year 1973 and 1 percent for prior years, was intended to increase the number of Social Security disability beneficiaries who are provided rehabilitation services. It also provided a third alternative to use when computing average current earnings for WC offset purposes. Under prior law, average current earnings were the larger of: (a) the average monthly wages used for computing a worker's Social Security benefit, or, (b) the average monthly earnings in covered employment and self-employment during a worker's 5 consecutive years of highest covered earnings after 1950, disregarding any limitations due to the contribution and benefit base. Average current earnings based on either of these computations did not, in some cases, realistically reflect the worker's earnings level at the time he/she became disabled. The new alternative permitted the average current earnings to be computed based on the one year the worker had the highest covered earnings in a period consisting of the calendar year in which he/she became disabled and the 5 preceding years.
The 1983 Amendments provided Social Security coverage to Federal employees hired after 1983 (except re-employed civil service annuitants). The Amendments eliminated gaps in the protection of Federal employees, particularly those who shift between Federal employment and jobs already covered under Social Security. Coverage was also extended to all employees of non-profit organizations. The Amendments also changed the computation of retirement or disability benefits based on noncovered employment. This provision was designed to reduce the higher replacement of earnings in the first bracket of the benefit formula for workers whose covered earnings are artificially low because most of their employment is noncovered. The Amendments provided that taxable income includes up to one-half of Social Security (and railroad retirement tier 1) benefits received by taxpayers whose income exceeds certain levels. The purpose of this Amendment was to treat Social Security benefits more like benefits paid under other retirement systems which are subject to taxation. The Amendments also extended (after April 1983) the suspension of benefits for any month during which the beneficiary is confined in a jail, prison, or other penal institution or correctional facility due to conviction of a felony committed at any time to all Title II categories.
The 1983 Amendments also provided for the phasing in of a gradual increase in the full retirement age from age 65 to age 67, with changes first affecting those individuals who turned age 65 in 2003.
The 1984 Amendments (The Social Security Disability Benefits Reform Act of 1984) provided for many changes in the disability program. The major changes established statutory guidelines for continuing eligibility and provided for more uniform decision making at all administrative levels. The Amendments established a specific medical improvement standard for use when determining whether entitlement to benefits should be continued. Benefits could also be continued through a review by the administrative law judge (ALJ), and the Legislation provided for an extension of SSI payments for some disabled SSI recipients whose earnings exceed the SGA level.
The Social Security Administrative Reform Act of 1994 established the Social Security Administration as an independent agency, effective March 31, 1995. The Act restricted DI and SSI benefits payable to drug addicts and alcoholics by creating sanctions for failing to get treatment, limiting their enrollment to 3 years, and requiring that those receiving DI benefits have a representative payee (formerly required only of SSI recipients).
The 1996 Amendments subsequently prohibited DIB and SSI eligibility if drug addiction or alcoholism was a contributing factor material to disability finding.
