Allsup: Unemployment Skyrockets for the Disabled

Unemployment for people with disabilities has reached its highest rate since January, according to a quarterly study by Allsup, a nationwide provider of Social Security disability representation and Medicare services.

At the same time, the Allsup Disability Study: Income at Risk shows the number of people applying for Social Security Disability Insurance (SSDI) benefits continues to climb. Thousands of people are forced to leave their jobs each month because of disabling conditions. Additionally, the rising SSDI application rate may be a result of individuals with worsening disabilities who have been out of work because of the recession and now realize they are medically unable to return to work.

Specifically, the third-quarter Allsup study shows unemployment averaged 16.1 percent for people with disabilities, compared to 9.3 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Department of Labor.

Over time, the study shows people with disabilities consistently experience higher rates of unemployment. Monthly unemployment rates for people with disabilities during the third quarter ranged from 15.1 percent (July) to 16.9 percent (August). These are the highest monthly unemployment rates reported since the Bureau of Labor Statistics (BLS) began reporting data on unemployment rates for people with disabilities last October. Monthly unemployment rates for people with no disabilities, in comparison, ranged from 9.2 percent to 9.5 percent during the third quarter.

BLS also reported that during September, more than two-thirds of the unemployed (36 percent) had been jobless for 27 weeks or more.

"Millions of individuals are now among the long-term unemployed," said Paul Gada, personal financial planning director for Allsup. "People with disabilities who lost jobs earlier in the recession may have spent months searching for a new job. During these months, however, their conditions may have continued to worsen, and now they physically cannot go back to work even if a job were available."

The Allsup Disability Study: Income at Risk shows that the number of people with disabilities unable to work and applying for SSDI continues to climb. Disability applications rose to more than 733,000 in third quarter 2009. This is up just 1 percent from the second quarter. However, year-to-date there has been a 23-percent increase in initial disability applications compared to year-to-date 2008.

The Social Security Administration is making headway in reducing the hearing backlog of SSDI claims. However, the number of claims pending at the application level alone is expected to reach nearly 1 million people by 2010, with the average time to process initial claims exceeding five months, according to an Allsup analysis. The SSA reports that more than 722,000 cases are pending at the hearing level, with an average wait time of 491 days.

"Applying for SSDI is not a quick or easy experience," said Gada. "It's important for people to learn if they meet the criteria and apply as early as possible, with hopes of reducing their wait to begin receiving monthly SSDI benefits."

Allsup is a nationwide provider of Social Security disability, Medicare and workers' compensation services for individuals, employers and insurance carriers.