THE LONG-RANGE DISABILITY ASSUMPTIONS

FOR THE 2020 TRUSTEES REPORT

OFFICE OF THE CHIEF ACTUARY

SOCIAL SECURITY ADMINISTRATION

April 22, 2020
Disability, Page 2

DISABILITY

ASSUMPTIONS FOR THE 2020 TRUSTEES REPORT

OFFICE OF THE CHIEF ACTUARY, SSA

TABLE OF CONTENTS PAGE

1 OVERVIEW ................................................................................................................................... 3

2 DISABILITY INCIDENCE ............................................................................................................... 4

2.1 EFFECTS OF ECONOMIC CYCLES AND POLICY CHANGES ON DI INCIDENCE RATES .................................................... 4

2.2 ASSUMED FUTURE DISABILITY INCIDENCE RATES........................................................................................................ 5

3 DISABILITY DEATH RATE............................................................................................................ 7

4 DISABILITY RECOVERY RATE..................................................................................................... 7

5 DISABILITY PREVALENCE RATES ............................................................................................... 8

CHART 1: EFFECT OF THE ECONOMY ON DI INCIDENCE RATE.......................................................................................... 10

CHART 2: NEW DISABLED-WORKER AWARDS PER 1,000 EXPOSED (INCIDENCE RATE)................................................. 11

CHART 3: MALE DISABLED-WORKER AWARDS PER 1,000 EXPOSED (INCIDENCE RATE) BY AGE GROUP .................... 12

CHART 4: FEMALE DISABLED-WORKER AWARDS PER 1,000 EXPOSED (INCIDENCE RATE) BY AGE GROUP................. 13

CHART 5: AGE-SEX-ADJUSTED COMPARISON OF SSA GENERAL POPULATION TO DISABLED-WORKER DEATH RATES

...................................................................................................................................................................................... 14

CHART 6: DISABLED-WORKER RECOVERIES PER 1,000 BENEFICIARIES.......................................................................... 15

CHART 7: DI DISABLED WORKER PREVALENCE RATES THROUGH NRA (PER 1,000 INSURED POPULATION)............... 16
Disability, Page 3

1 Overview

Each year the Board of Trustees of the Federal Old-Age and Survivors Insurance (OASI) and 

Disability Insurance (DI) Trust Funds provides an annual report to the Congress on the financial 

and actuarial status of the OASDI program. The Office of the Chief Actuary (OCACT) produces 

projections of future cost and income based on three separate sets of long-range (75-year) 

assumptions for three key disability variables. The intermediate (alternative II) set of 

assumptions represents the Trustees’ best estimate for future experience, while the low cost 

(alternative I) and high cost (alternative III) sets of assumptions are more and less favorable, 

respectively, from the perspective of program cost as a percent of taxable payroll. In addition, the 

intermediate assumptions serve as the central tendency for the stochastic projections presented in 

the OASDI Trustees Report. This memorandum presents the disability assumptions used in the 

2020 annual report of the Board of Trustees (the “Trustees Report”). 

At the time assumptions were selected for the 2020 Trustees Report, it was too early to 

anticipate the potential effects of the COVID-19 pandemic. The magnitude and duration of 

effects on the population and the economy are still unclear. Therefore, the potential effects 

of the pandemic are not reflected in these assumptions.

The disability assumptions are: 

• The ultimate disability incidence rates by age group and sex,

• The ultimate disability death rates by age group and sex, and

• The ultimate disability recovery rates by age group and sex.

Compared to the values assumed for the 2019 Trustees Report, these assumptions include lower 

disability incidence rates for all alternatives. The death and recovery rate assumptions are the 

same as those used for the 2019 Trustees Report, and there are no significant method changes in 

the disability model for the 2020 Trustees Report. 

The alternative II age-sex-adjusted disability incidence rate was lowered from 5.2 in the 2019

Trustees Report to 5.0 in the 2020 Trustees Report. The lower disability incidence rates assumed 

for the 2020 Trustees Report reflect to a small extent the historically low level of recent 

incidence rates. Recent incidence rate data indicate a continued decline since the peak in 2010 to 

levels for 2018 and 2019 that are 4.1 and 4.0 respectively, as compared to a longer-term

historical average close to 5.0. Applications and incidence rates are both near historic low levels. 

Possible explanations for the recent decline in disability applications and awards include the low 

unemployment rate, the drop in hearings allowance rates, and the greater availability of health 

care because of the Affordable Care Act. However, the largest and most persistent factor 

affecting incidence rates appears to be the changing nature of work, which allows more people 

with limiting impairments to become employed and to continue employment. The following 

table shows the ultimate summary measures for the assumptions. 1

 1 The ultimate disability death summary measures increased slightly due to data and methodology updates. The 

death rates shown are for the last year of the 75-year projection period. For the 2019 and 2020 Trustees Reports, the 

last years are 2093 and 2094, respectively. There is a small amount of mortality improvement reflected in the death 

rates between 2093 and 2094.
Disability, Page 4

Key Disability Summary Measures for the Long-Range (75-year) Projection Period

2019 Trustees Report and 2020 Trustees Report

2019 Trustees Report 

Alternative

2020 Trustees Report 

Alternative

2020 Trustees Report 

Less 2019 Trustees 

Report 

I II III I II III I II III

Age-sex-adjusted Disability Incidence 

Rate per 1,000 in the last year of the 

75-year projection

4.2 5.2 6.2 4.0 5.0 6.0 -0.2 -0.2 -0.2

Age-sex-adjusted Disability Death 

Rate per 1,000 in the last year of the 

75-year projection

18.9 12.0 7.1 19.0 12.1 7.2 0.1 0.1 0.1

Age-sex-adjusted Disability Recovery 

Rate per 1,000 in the last year of the 

75-year projection

12.5 10.3 8.2 12.5 10.3 8.2 0.0 0.0 0.0

The assumed ultimate disability incidence and recovery assumptions are applied for the twentieth 

projection year and thereafter. During the first ten years of the projection period, the long-range 

model reconciles with projections from the short-range model. There is a transition between the 

rates at the end of the short-range period and the implementation of the ultimate rates as of the 

twentieth projection year. The age-sex adjusted incidence rate in year 10 is very close to the 

ultimate. Therefore, the transition from years 10 to 20 is very small.

The lower ultimate disability incidence rate assumption results in a 0.04 increase (improvement)

in the long-range OASDI actuarial balance. Also including recent disability data, the new 

regulation to remove the inability to communicate in English as an education category in the 

disability determination process, and changes in near-term assumptions increased (improved) the 

actuarial balance by a combined total of 0.05 percent of payroll. 

The remainder of this paper provides details regarding the historical values and future values for 

each of the disability assumptions, and the basis for the assumptions.

2 Disability Incidence Rate

2.1 Effects of Economic Cycles and Policy Changes on DI Incidence Rates

Disability incidence rates are the proportion of workers in a given year, insured for but not 

receiving disabled-worker benefits (exposed population), who file for and are awarded disabledworker benefits. The age-sex-adjusted historical and short-range projected alternative II 

incidence rates are shown in Chart 1. A number of specific economic and policy drivers have 

influenced disability program cost historically and will continue to have an effect on disability 

incidence. Periodic economic recessions, as indicated by the civilian unemployment rate in red 

in Chart 1, have been associated with temporary increases in disability incidence. Incidence rates 

tend to increase temporarily in bad economic times. Some individuals who gradually develop 

conditions that would qualify for DI benefits based on the severity of their medicallydeterminable impairment are able to continue work at a level in excess of substantial gainful 

activity (SGA) given the opportunity and needed assistance during a period of strong economic 

activity and demand for workers. But with elevated unemployment rates like those seen in the 

last recession, many of these individuals will lose employment and will seek DI benefits.
Disability, Page 5

The recession that began in December 2007 resulted in an increase in disability applications and 

incidence to peak levels in 2010 that were exceeded only by the peak in 1975. One apparent 

exception to the relationship between disability incidence and economic recessions is the strong 

recession of 1981-1982. The effect of that recession appears to have been offset by the net 

effects of the 1980 Amendments, which: (1) sharply increased the levels of pre-effectuation 

review of disability allowances and continuing disability reviews of current beneficiaries; (2) 

introduced the extended period of eligibility to encourage work; and (3) lowered the maximum 

family benefit for DI beneficiaries.

Additional policy changes over the years had significant effects on disability incidence. Doubledigit ad-hoc benefit increases in 1970 through 1974 made disability benefits more 

attractive. The 1984 Amendments may have offset the effects of a strong economic recovery 

with increased emphasis on multiple impairments and mental listings, and the requirement to 

show medical improvement for benefit cessation. The SSI outreach to disabled adults likely 

added to the effects of the 1990-1991 recession. Also, the effects of a strong economic recovery 

from 1995 to 2000 on lowering incidence rates may have been enhanced by the 1996 

Amendments which eliminated drug addiction and alcoholism as disabling conditions.

Incidence rates have fallen steeply since 2010, concurrent with the recovery from the 2007-2009

recession. Incidence rates have recently dropped to levels well below those expected over the 

long-term, and even below the levels that would be expected from the economic recovery alone, 

due to reasons mentioned above. Future policy changes and economic cycles will undoubtedly 

continue to cause fluctuations in disability incidence rates. 

2.2 Assumed Future Disability Incidence Rates

As previously mentioned, the disability incidence rate (the percent of the exposed population that 

is newly awarded benefits in the year) rose sharply in the recent recession, and has declined since 

the peak in 2010 to an extraordinarily low level by 2016. Some small portion of this decline has 

resulted from an increase in the disability case backlog, especially at the hearings level. In 2017,

SSA efforts resulted in a substantial reduction in the hearings backlog, producing the temporarily 

elevated level of incidence for that year and to a lesser extent for years through 2021. However, 

persistent declines in applications through 2018 and continuing low numbers of applications in 

2019 resulted in very low incidence rates in 2018 and 2019, as seen in the blue line in Chart 1. 

With the disability backlog expected to be eliminated by 2021, new disabled-worker 

determinations are projected to be completed on a timely basis after 2021. In this year’s report, 

incidence rates are assumed to rise more gradually early in the short-range period than in last 

year’s report, and are lower later in the period. In 2029, at the end of the short-range period, agesex-specific incidence rates approximate the ultimate rates assumed for the long-range period.

For alternative II of the 2020 Trustees Report, the Trustees assume an ultimate age-sex-adjusted 

disabled-worker incidence rate of 5.0. This rate was 5.2 awards per thousand for the 2019 

Trustees Report, and 5.4 awards per thousand for the 2012 through 2018 Trustees Reports. The 

5.0 ultimate incidence rate is 2 percent lower than the historical average experienced from 1995 

through 2019 (5.1 awards per thousand) and is 2 percent higher than the most recent ten-year 

historical average experienced from 2010 through 2019 (4.9 awards per thousand). These new 

ultimate incidence rates are calculated by age group and sex using a no-lag unemployment rate 
Disability, Page 6

regression model for the years 1995-2018. The ultimate long-term unemployment rate 

assumption of 5.0 percent was incorporated into our regression model. We began our regression 

model in 1995, instead of 1990 (the first year we have unemployment rates by age group and 

sex), to better capture recent higher levels of female disability incidence rates. For ages 60-64, 

rates are increased from the regression results to reflect the planned increase in the Social 

Security Normal Retirement Age from 66 to 67. We calculated rates for ages 65 and older using 

a weighted average of our base incidence rates and projected exposure. We further adjusted these 

rates with a 0.3 percent discount for the reinstatement of the reconsideration step of the disability 

appeals process and a 0.25 percent discount for the removal of the inability to communicate in 

English as an education category in the disability determination process. The Office of the Chief 

Actuary will continue to monitor experience closely and review the disability incidence

assumption. 

The 2011 Technical Panel suggested raising the 2011 Trustees Report ultimate alternative II 

incidence rate assumption of 5.2 to 5.8. The 2015 Technical Panel agreed with the ultimate 

alternative II incidence rate assumption of 5.4 and suggested that OCACT closely monitor 

experience. The 2019 Technical Panel suggested lowering the disability incidence rate to 4.9,

consistent with the Panel’s lower long-term unemployment rate assumption of 4.8 percent and 

taking into account some of the recent drop in incidence. The 2019 Panel also recommended 

continued monitoring of trends in the incidence rate (including external consultation with experts 

in the private disability industry) and linking the disability incidence rate and unemployment rate 

assumptions. The Congressional Budget Office raised their ultimate disability incidence rate to 

5.6 for their 2013 through 2015 Long-Term Budget Outlooks, and reduced the assumption to 5.4 

for their 2016 through 2018 reports, matching the Trustees. For the 2019 Long-Term Budget 

Outlook, they reduced the assumption to 5.2, again matching the Trustees.

Chart 2 shows age-adjusted historical and ultimate alternative II incidence rates for males and 

females. For males, the age-adjusted incidence rate has averaged 5.2 new disability awards per 

thousand exposed workers from 1995 through 2019. The female age-adjusted incidence rate has 

averaged 5.0 from 1995 through 2019. Since 1980, the age-adjusted incidence rate for females

has increased to a level much closer to the rate for males. The male and female ultimate ageadjusted disability incidence rate assumptions under alternative II for the 2019 Trustees Report 

were both 5.2, assuming that females have caught up to males. For the 2020 Trustees Report, the 

Trustees assume ultimate age-adjusted disability incidence rates for both males and females are 

5.0 new disability awards per thousand exposed workers. 

Chart 3 and Chart 4 show the historical and ultimate alternative II incidence rates by age group

for males and females, respectively. The table below shows the 2020 Trustees Report alternative 

II ultimate incidence rates by age group for 2094, the last year of the projection period. 

Disability Incidence Rates per 1,000 Exposed for 2094, 2020 Trustees Report Alternative II

Age Group

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

Male 0.4 1.4 1.6 2.0 2.6 3.7 5.1 8.6 14.7 18.4 10.0

Female 0.3 0.9 1.4 2.0 3.0 4.3 5.8 9.2 14.1 15.6 8.6
Disability, Page 7

Because the low-cost and high-cost alternative ultimate disability incidence rates are determined 

by adjusting the incidence rates from the intermediate alternative down and up by roughly 20

percent, respectively, rates for these alternatives are not included in the charts. 

3 Disability Death Rate

Death rates are much higher for the disabled population than the general population, as seen in 

Chart 5. Base probabilities of death by duration, age, and sex (from an updated Social Security 

Disability Insurance Program Worker Experience Study completed by Tim Zayatz and Nettie 

Barrick that will be published soon) are applied to the disabled-worker population. In the first 

year of the projection period, the death rate is determined by fitting an exponential curve to 

historical death rates for disabled workers by age group and sex. For the rest of the projection 

period, death rate improvement factors are applied to the base probabilities of death to reflect the 

same rate of improvement as the general population for that age group and sex. The 

incorporation of lower projected mortality improvement in the general population results in 

slightly higher projected disability death rates for the 2020 Trustees Report. From the age-sexadjusted death rate of 24.8 per thousand beneficiaries in 2019, this rate decreases to a 

preliminary rate of 12.1 per thousand for 2094 under the intermediate assumptions for the 2020

Trustees Report. The low-cost and high-cost alternative disability death rates are determined by 

increasing and decreasing by 7.5 percent, respectively, the death rate in the first year of the 

projection period. Then the general population mortality improvement for that alternative is 

applied to project death rates for the remainder of the 75-year period.

The 2011 Technical Panel recommended a more rapid decline in disability mortality rates for 

both men and women from 2020 through 2030. The 2015 Technical Panel stated that they were 

comfortable with the Trustees’ assumption. The 2019 Technical Panel did not address this 

assumption.

4 Disability Recovery Rate

Beneficiaries stop receiving disability benefits when they (1) die, (2) covert to a retired-worker 

benefit at normal retirement age, (3) recover from their medically-determinable disabling 

condition, or (4) return to work for an extended period. Disabled-worker beneficiaries who return 

to substantial work for an extended period are deemed to have recovered, and their benefits are 

then terminated. The recovery rate is the ratio of the number of recoveries for reasons (3) and (4) 

to the average number of disabled-worker beneficiaries during the year. Base probabilities of 

recovery (from an updated Social Security Disability Insurance Program Worker Experience 

Study completed by Tim Zayatz and Nettie Barrick that will be published soon) by duration, age, 

and sex are applied to the disabled-worker population. 

Chart 6 shows age-sex-adjusted historical and projected alternative II recovery rates. The rate of 

recovery is, at times, affected by budget appropriations for continuing disability reviews, with no 

general upward or downward trend since 1985. The ultimate disability recovery rate under the 

intermediate alternative is equal to the average recovery rate by age group and sex for the years 

1985-2005, excluding 1997. The averaging period begins in 1985, after the Social Security 

Disability Benefits Reform Act of 1984 created medical improvement standards for continuing 
Disability, Page 8

disability reviews. The spike in recoveries in 1997 when drug and alcohol addictions were 

eliminated as bases for disability entitlement is excluded from the calculation.

The projected age-sex-adjusted recovery rate (medical improvement and return to work) under 

the intermediate assumptions decreases from the relatively high level of 18.9 per thousand 

beneficiaries in 2019 to the preliminary ultimate level of 10.3 per thousand beneficiaries under

the intermediate assumptions for the 2020 Trustees Report. The recovery rate has been high 

recently due to an ongoing administrative effort to work down a backlog of continuing disability 

reviews. The rate is expected to decrease as the backlog is reduced.

Because the low-cost and high-cost alternative ultimate disability recovery rates are determined

by adjusting the recovery rates from the intermediate alternative up and down by roughly 20

percent, respectively, rates for these alternatives are not included in the chart. 

The 2011 Technical Panel suggested reducing the ultimate alternative II recovery rate 

assumption from 10.7 to 8.7. The 2015 Technical Panel recommended reducing the ultimate 

alternative II recovery rate assumption from 10.4 to 10.1. The 2019 Technical Panel did not 

address this assumption.

5 Disability Prevalence Rates

The disability prevalence rate is the percentage of the disability insured population that is in 

receipt of disability benefits. Changes in prevalence rates are a direct result of changes in 

incidence rates and termination rates. Age-sex-adjusted prevalence rates have increased 

primarily because: (1) termination rates, in particular death termination rates, have declined; (2) 

incidence rates at younger ages have increased relative to rates at older ages (new beneficiaries at 

younger ages have more potential years on the disability rolls); (3) incidence rates have increased 

substantially for women to parity with men; and (4) the DI program has matured (disabled 

worker benefits became available to those over age 50 at the start of the program in 1957 and to 

younger workers in 1960, and disability insured status requirements were eased for those under 

age 31 in 1968). Age-sex-adjusted prevalence rates are projected to grow at a slower pace based 

on the assumed stabilization in incidence rates by age and gender and in DI program age and 

insured requirements. As these factors gradually stabilize, the declining death termination rate 

continues to have a small influence toward higher disability prevalence rates, because applying 

the same rate of reduction in death rates for the disabled as for the general population results in 

larger declines in the death rate for the disabled.

The projected age-sex-adjusted disability prevalence rate grows from 39.7 per thousand 

disability insured at the end of 2019 to 45.3 per thousand at the end of 2094. Chart 7 illustrates 

the historical and projected disabled worker prevalence rates for males and females. The female 

prevalence rate rises to the level of the male rate around 2010, and then is slightly higher than the 

male rate for the remainder of the projection period, because the disability death and recovery 

rates are higher for males than females. In 2094, the age-adjusted prevalence rate is 45.1 for 

males and 45.6 for females. 

As mentioned above, we project the growth in prevalence will slow relative to the historical 

period. The low-cost and high-cost alternative disability prevalence rates are determined using 
Disability, Page 9

the disability incidence rate, disability death rate, and disability recovery rate assumptions for 

that alternative.
Disability, Page 10

Chart 1: Effect of the Economy on DI Incidence Rate

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

0

1

2

3

4

5

6

7

8

9

10

11

12

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Unemployment rates (%) and incidence rates (per 1,000 exposed)

Calendar year

Age-sex-adjusted disabled worker incidence rate

Civilian unemployment rate

Historical Estimated

Recession + 

SSI (1974)

Recession

Recession

Recession

Recession

1970-74: Large

benefit increases

1980 Amendments: PER,

CDRs,Lower Family Max, EPE

1984 Amendments: Revised mental listing,

medical improvement standard for CDRs,

consideration of multiple impairments

1996 Amendments: DA&A,

special CDR funding

SSI Outreach 1990

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 11

Chart 2: New Disabled-Worker Awards per 1,000 Exposed (Incidence Rate)

Age-Adjusted (2000)

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

 2

 3

 4

 5

 6

 7

 8

1970197519801985199019952000200520102015202020252030203520402045205020552060206520702075208020852090

New Awards per 1,000 Exposed

Male

Female

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 12

Chart 3: Male Disabled-Worker Awards per 1,000 Exposed (Incidence Rate) by Age Group

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

 -

 5

 10

 15

 20

 25

 30

 35

197519801985199019952000200520102015202020252030203520402045205020552060206520702075208020852090

New Awards per 1,000 Exposed

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65+

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 13

Chart 4: Female Disabled-Worker Awards per 1,000 Exposed (Incidence Rate) by Age Group

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

 -

 5

 10

 15

 20

 25

 30

 35

197519801985199019952000200520102015202020252030203520402045205020552060206520702075208020852090

New Awards per 1,000 Exposed

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65+

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 14

Chart 5: Age-Sex-Adjusted Comparison of SSA General Population to Disabled-Worker Death Rates

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 15

Chart 6: Disabled-Worker Recoveries per 1,000 Beneficiaries

Age-Sex-Adjusted (2000)

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

Social Security Administration

Office of the Chief Actuary

April 22, 2020
Disability, Page 16

Chart 7: DI Disabled Worker Prevalence Rates through NRA (per 1,000 Insured Population)

Age-Adjusted to the 2000 Insured Population

Note: The projections reflect the Trustees’ assumptions for the 2020 Trustees Report.

 15

 25

 35

 45

 55

 65

197519801985199019952000200520102015202020252030203520402045205020552060206520702075208020852090

Disabled Workers per 1,000 Insured

Social Security Administration

Office of the Chief Actuary

April 22, 2020