Waiting to Benefit: Age-Based Disability Regulations and Pathways to Supplemental Security Income Take-up in Later Life

Background and Purpose: Supplemental Security income (SSI) is an important resource for low-income older adults and people with disabilities. Yet, it is notoriously difficult to be deemed eligible for SSI. Sixty percent of SSI applicants are ultimately denied, most of them rejected for not meeting the disability criteria (CBPP, 2023b). Older SSI applicants may have an easier time getting approved. Starting at age 45, the Social Security Administration (SSA) relaxes the disability requirements for certain groups every five years until they are eliminated at age 65. For a subset of marginally eligible applicants, age is considered as a “vocational factor” in conjunction with their functional capacity, education level, and work history in determining whether they could readjust to new work given their impairment. However, evidence from the Social Security Disability insurance (DI) program suggests that, rather than encouraging adjustment to other work, the disability age rules delay benefit receipt among applicants eventually determined eligible (Schimmel Hyde et al., 2020; Strand & Messel, 2019). Without income from earnings, it is unclear how would-be disability program participants make ends meet while they wait to age into eligibility.

Methods: This paper has two aims. First, I estimate SSI take-up rates by age and test whether discontinuities in SSI take-up exist when SSA disability determination rules are relaxed (at ages 45, 50, 55, and 60) and eliminated (at age 65). Second, I identify patterns of employment, homelessness, and public assistance use among SSI recipients in the five years prior to SSI take-up and examine how these patterns vary by age. I conduct these analyses with administrative microdata from multiple agencies in Washington state spanning from 2010 through 2017.

Results: This research yields three key findings: First, I find significant and discontinuous increases in SSI take-up at age 55 and age 65. Second, I find that people who first received SSI between the ages of 40 and 59 were more likely to have experienced homelessness in the five years prior to SSI take-up than to have been employed. This gap is concentrated among people who first received SSI before age 60: nearly half of this group had experienced at least one quarter of homelessness, but only about one-third were employed for at least one quarter. Third, I find that most eventual SSI recipients participated in public assistance programs in the five years prior to receiving SSI, regardless of their age at SSI take-up.

Conclusions and Implications: The significant discontinuous increase in SSI take-up at age 55 following the relaxation of disability rules in the medical-vocational grid suggests that the age threshold may be arbitrarily delaying otherwise-eligible people from receiving SSI benefits. The low employment rate among eventual SSI recipients is contrary to the assumptions built into the SSA disability determination process, but consistent with expectations for the SSI population who by definition have little work history. The low employment and high homelessness rates raise questions about how people make ends meet in the five years before they start receiving SSI.