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_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________

 

Congressional Research Service (CRS)

 

Disability Benefits Available Under the Social Security Disability Insurance (SSDI) and Veterans Disability Compensation (VDC) Programs

Umar Moulta-Ali, Presidential Management Fellow

June 17, 2010

http://opencrs.com/document/R41289/2010-06-17/download/1013/

or

http://assets.opencrs.com/rpts/R41289_20100617.pdf

[full-text, 23 pages]

 

Summary

Social Security Disability Insurance (SSDI) and Veterans Disability Compensation (VDC)—

administered by the Social Security Administration (SSA) and the Department of Veterans Affairs

(VA) respectively—are two of the largest federal disability programs, but strongly differ along

several dimensions, including the populations served, how each program defines a “disability,” as

well as varying eligibility requirements.

 

First, SSDI is an insurance program that replaces a portion of earnings for an eligible worker

whose illness or injury—while not necessarily caused by a work-related incident—results in an

inability to work. SSDI is one of several federal programs funded through the Federal Insurance

Contributions Act (FICA) payroll tax and the Self-Employment Contributions Act (SECA) tax to

which all workers and employers in covered occupations (including military personnel) and selfemployed

individuals make contributions. On the other hand, VDC is not insurance, but is a

compensation program in that payments are made to veterans who develop medical conditions

that are related to their service in the military. VDC is non-contributory and neither veterans nor

active military personnel pay into the program, which is funded through a mandatory

appropriation as part of the VA annual budget.

 

Second, while the purpose of both SSDI and VDC is to provide income security, SSDI provides a

financial “safety-net” to eligible civilian and military workers due to their inability to work as a

result of long-term or terminal injury or illness. Conversely, VDC provides veterans with tax-free,

cash benefits specifically for service-connected illnesses or injuries. The ability to work is not

factored into VDC disability determinations, although additional compensation is available for

veterans who are unemployable as the result of a service-connected condition(s).

Third, SSDI only compensates workers that are fully disabled, whereas VDC compensates

veterans for both partial and fully disabling injuries and illnesses. The VA is further guided by a

principle that views disability compensation as an obligation, owed to veterans, for injuries

impacting employment that were incurred or aggravated by their service to the country. SSDI

benefits are granted solely on medical and economic grounds and other noneconomic factors are

not considered. Eligibility requirements generally tend to be more stringent for SSDI than VDC,

and most veterans will not likely meet the criteria for both programs.

 

Both SSA and the VA have faced challenges in the administration of benefits and have been

criticized for a lack of interagency coordination, processes that are “out-of-sync” with modern

conceptions of disability, and extensive processing delays for claims and appeals. These are a few

issues which led, in part, to a Government Accountability Office (GAO) investigation and

determination of federal disability programs as “high risk.” Both agencies have made efforts to

address issues surrounding pending claims and appeals, but differ in their responses to other

recommendations.

 

This report provides a description and comparative analysis of the SSDI and VDC programs.

These issues will be of particular interest to Congress because of the expected increase in the

numbers of SSDI and VDC claims. The recent economic decline and aging baby-boomers have

continued to place a strain on SSA’s resources. The aging of the veteran population and expansion

of presumptive conditions policies have contributed to the increase in VDC claims.

 

Contents

Introduction ...............................................................................................................................1

Social Security Disability Insurance ............................................................................................2

Eligibility Requirements .......................................................................................................2

SSDI Benefits .......................................................................................................................3

SSDI Determination Process .................................................................................................3

SSDI Four-Step Appeals Process ...........................................................................................5

Step 1 in the SSDI Appeals Process (Reconsideration).....................................................6

Step 2 in the SSDI Appeals Process (Administrative Hearing) .........................................6

Step 3 in the SSDI Appeals Process (Social Security Appeals Council) ............................6

Step 4 in the SSDI Appeals Process (U.S. District Court).................................................7

Veterans Disability Compensation...............................................................................................7

Background in Brief..............................................................................................................7

VDC Eligibility Requirements ..............................................................................................7

VDC Determination Process .................................................................................................7

100%/Total Disability Ratings.........................................................................................8

Presumptive Conditions ..................................................................................................9

VDC Benefits .......................................................................................................................9

VDC Appeals Process ...........................................................................................................9

Distinctions Between SSDI and VDC Programs ........................................................................ 11

Comparison of Recipient Populations.................................................................................. 11

SSDI and VDC Program Administration .............................................................................12

Health Care Benefits for SSDI and VDC Recipients ......................................................14

Thresholds for Substantial Gainful Activity Under SSDI and Substantially

Gainful Employment Under VDC ..............................................................................14

Differences in the Disability Evaluation Process............................................................15

Differences in the Treatment of Benefits........................................................................16

Continued Divergence Between SSA and VA Disability Programs .............................................17

Assessing VA Disability Compensation for Noneconomic Loss ...........................................17

Challenges Facing Federal Disability Programs in Brief ......................................................17

SSA Plan to Address Program Issues .............................................................................18

VA Response to VDC Program Criticism.......................................................................19

Figures

Figure 1. Social Security Administration’s Five-Step Sequential Evaluation Process for

Determining Disability.............................................................................................................4

Figure 2. SSDI Appeals Process ..................................................................................................5

Figure 3. Flow Chart of the Various Steps in the VA Appeal Process ..........................................10

Tables

Table 1. Comparison of SSDI and VDC Recipients, 2009..........................................................12

Table 2. Comparison of Key SSDI and VDC Program Components...........................................13

Table 3. General VDC and SSDI Eligibility Determinations for Four Hypothetical

Veterans ................................................................................................................................15

Contacts

Author Contact Information ......................................................................................................19

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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