Office of the Chief Actuary

Social Security Administration

Technical Panel Meeting

December 14, 2018

Disability Experience, Assumptions, and 

Projections 2018 TR
Social Security Disability Insurance

 155 million workers under age 66 are insured against becoming 

unable to work

 8.7 million workers now receive DI benefits

 1.7 million “dependents” – mostly children

 Many more protected from loss of insured status

 And from lower retirement benefits

 Benefits replace 40% to 45% of career earnings on average

 About 80% for very-low earner, about 28% for steady maximum earner

OCACT/SSA 2
Solvency of the DI Trust Fund

Reserve depletion in 2032; 2008 recession offset “new economy”; cycles still happen

3

0

50

100

150

200

250

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Reserves as % of Annual Cost

DI Trust Fund Ratio in 1995, 2008, 2017 & 2018 Trustees Reports

1995TR

2008TR

2017TR

2018TR

"New Economy" 

irrational 

exuberance

2008 

Recession 

back to 

reality

Tax-Rate 

Reallocation

OCACT/SSA
Changing Age Distribution Over Last 20 and Next 20 Years Mainly Due 

to Macro Aging—permanent level shifts

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Percent of Population at Ages 25+

Age Distribution of the Population Age 25+, 1940 to 2100 (2018 TR)

25-44

45-64

65-84

85+

Boomers 

become 

25-44

Boomers 

become 

45-64

Boomers 

become 

65-84

OCACT/SSA 4
Increased Work by Women Raised Female Insured Rates; 

Male Rates a Little Lower at Younger Ages

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

19701975198019851990199520002005201020152020202520302035204020452050205520602065207020752080208520902095

Percent of Population Ages 15 to NRA that is Insured for Disability

Male

Female

OCACT/SSA 5
Recent Favorable Disability Experience

 Applications and incidence are at historic low levels

 Numbers of beneficiaries have been declining since 2013

 Prevalence rates have peaked and are dropping

 What about the future? 

 Are declines temporary, or the new state? 

 Possibilities:

 Economy and jobs—temporary 

 Drop in hearings allowance rates—temporary? 

 Increased health care (ACA)

 Field office consolidations

 Attorney representation

 Something more fundamental?

OCACT/SSA 6
Applications Are Still Dropping in 2018!

OCACT/SSA 7
Disability Incidence Rate Falls to Historic Lows

DI disabled worker incidence rate rose sharply in the recession, and has declined since the peak in 

2010 to extraordinarily low levels for 2016 and 2017

4

4.5

5

5.5

6

6.5

1990 1995 2000 2005 2010 2015 2020 2025 2030

DI Age-Sex-Adjusted Incidence Rates:

Historical and Intermediate Assumptions for 2012 through 2018 Trustees Reports

2012TR

2017TR

2016TR

2015TR

2014TR

2013TR

Average 1990-2017 5.23

Ultimate Assumption 5.40

2018TR

OCACT/SSA 8
Fewer Disabled Worker Beneficiaries 

Fewer now and in near term based on recent applications and incidence rates

6,000

7,000

8,000

9,000

10,000

11,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Disabled Worker Beneficiaries

In Current Payment Status at End of Year (in thousands)

2008 TR (no recession)

2018 TR

2017 TR

OCACT/SSA 9
10

Effect of the Economy on DI Incidence—2018 TR

OCACT/SSA
Disabled Worker Prevalence Rates (all through age 64) 

OCACT/SSA 11
Ultimate Incidence Rate Assumptions and Historical Averages 

Most Recent Ultimate Incidence Rate is 5.4

12

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

6.0

1993 1998 2003 2008 2013 2018

Average Disability Incidence Rates over Prior Periods: 

Disabled Worker Awards per 1,000 Exposed

10-Year Average Ending in Year 20-Year Average Ending in Year 30-Year Average Ending in Year Ultimate in TR Year

OCACT/SSA
13

Appendix

OCACT/SSA
187% Increase in Disabled Worker Beneficiaries 

How much is due to changes in population size, NRA, age distribution, recession, 

more women insured and filing?

DI Disabled Worker Beneficiaries : from 2010 to 1980, in thousands

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2010

PopulationSize

Age distribution

NRA66

Di Insured

2010 recession

1980

187 percent above 1980

Age 20-64 pop

 increases 41%

Age distribution 

increases 38% 4%

21% 5%

 12% 

Incidence

 Rates, etc

OCACT/SSA 14
DI Cost as Percent of GDP Has Peaked, 

but Scheduled Income Is Too Low

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1975

1980198519901995

200020052010

20152020

20252030203520402045

2050205520602065

207020752080

20852090

2095

DI Cost and Income as Percent of GDP 1975-2095

2018 Trustees Report Intermediate Assumptions

Baby Boomers 

reach ages 

45-64 in 2010

Baby Boomers 

reach ages 

25-44 in 1990

Note: 

Recession raised

DI Cost/GDP by 

15% for 2010

DI Cost

DI Income

Tax-Rate Reallocation

OCACT/SSA 15
Most of the Recession Effect is From Less GDP, not More DI Cost

Change in DI Benefit Cost and in GDP 

Between 2008 TR and 2013 TR

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2010 2011 2012 2013

Increase in DI

Benefit Cost

Reduction in GDP

Increase in DI

Benefit Cost/GDP

OCACT/SSA 16
Disability Incidence Rate Projected to Rise to Ultimate Level by 2027

Sharp increase in the projected disability incidence rate in 2018 and 2019 

due in part to the reduction of the ALJ backlog

4

4.5

5

5.5

6

6.5

2005 2010 2015 2020 2025

2018 TR Short-Range Disabled Worker Age-Sex-Adjusted Incidence 

Rates with and without ALJ Backlog Reduction

(Awards per thousand disability-exposed)

2018 TR Intermediate assumptions

With no ALJ backlog reduction

OCACT/SSA 17
Age-Adjusted Disability Incidence Rates: 

Male at all-time low; female has caught up to male

18

New Disabled Worker Awards per 1,000 Exposed (Incidence)

Age-Adjusted (2000) — 2018 Trustees Report

 

 2

 3

 4

 5

 6

 7

 8

1970197519801985199019952000200520102015202020252030203520402045205020552060206520702075208020852090

New Awards per 1,000 Exposed

Male

Female

OCACT/SSA
DI Incidence Rates Ages 60-64

OCACT/SSA 19
DI Incidence Rates Ages 55-59

OCACT/SSA 20
DI Incidence Rates Ages 50-54

OCACT/SSA 21
DI Incidence Rates Ages 45-49

OCACT/SSA 22
DI Incidence Rates Ages 40-44

OCACT/SSA 23
DI Incidence Rates Ages 35-39

OCACT/SSA 24
DI Incidence Rates Ages 30-34

OCACT/SSA 25
DI Incidence Rates Ages 25-29

OCACT/SSA 26
DI Incidence Rates Ages 20-24

OCACT/SSA 27
DI Incidence Rates Ages 15-19

OCACT/SSA 28
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, males under age 30 at entitlement

29

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, males age 30-39 at entitlement

30

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, males age 40-49 at entitlement

31

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, males age 50-59 at entitlement

32

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, males age 60 and over at entitlement

33

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, females under age 30 at entitlement

34

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, females age 30-39 at entitlement

35

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, females age 40-49 at entitlement

36

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, females age 50-59 at entitlement

37

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
DIBs awarded through June 2018 by year of entitlement and 

primary diagnosis code, females age 60 and over at entitlement

38

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Entitlements (Percent of annual total)

Year of entitlement

Musculoskeletal Mental disorders Circulatory Neoplasms

Nervous System Injuries Respiratory Nutritional/metabolic

Infectious/parasitic Other

OCACT/SSA
Age-Sex-Adjusted Death and Recovery Rates

OCACT/SSA 39
Comparison of General Population Mortality to 

Disabled Worker Mortality

OCACT/SSA 40
OCACT/SSA 41
OCACT/SSA 42