Montana labor news., 1945-05-24
F. DISABILITY
. INSURANCE
PROPOSED

a. AF(OAR4 "a H0AA
PROPOSED
The following article on disability in
surance is printed so that our readers
may understand why disability protection
should be included in any revision Of
the Social Security Act
Much progress has been made in re-
cent years in caring for aged persons
after their working days are over. But
no similar protection is available to the
worker forced to leave gainful employ
ment because OF disability.
The social insurance method is apple
able to the risk of disability as well as
old age Through social insurance, cash
benefits can be provided for the dis
abled worker; the resources Of families
which often must be used for the sup
port of the disabled can be set free to
meet the important needs Of children,
upon whom the future Of society rests.
What is permanent disability?-A dis
ability which last more than six months
is customarily regarded as permanent.
More than two million persons Of
working age are disabled-At any one
time some s.4 million persons in the
United States have disabilities which
have lasted six months or more. From
one third to one-half of these are per
sons aged 1886 who would normally be
working. Only a small fraction of the
group are disabled by work connected
accident. Workmen's compensation,
which protects workers against industrial
injury-and in few states, also occu-
pational disease therefore compensates
for only a small fraction of the wage
loss from permanent disability.
Permanent disability often cuts off
family income when responsibilities are
greatest Permanent disability is a great
er threat to family security than old
age. Studies indicate that relative in
comes in families in which the head Of
the family is disabled are decidedly lower
than in those in which the head is age
65 or over. Wage earners who are dis
abled in early adult life often have young
children to support and many years to
wait before the children can contribute
to the family income. Physical disabil-
ity of one or both parents was the rea-
son for granting aid to one out of five
families added to the rolls for aid to
dependent children in the United States
in the latest year for which figures are
available Without substantial savings or
insurance protection nearly all families
must seek public or private aid when the
chief wage Garner is permanently dis
abled
Why private insurance does not solve
the problem-Insurance against perma-
nent disability on an individual basis is
very expensive, because the people who
take it out tend to be those who think
themselves bad risks Because Of the
high costs incurred by life insurance
companies in covering this risk few
commercial insurance companies now
offer insurance of this type.
Other countries have found disability
insurance acticable.-While disability
insurance on a voluntary individual
basis is costly, costs are not great when
a minimum level of benefits is provided
under a compulsory social insurance
system with wide coverage Of workers
and risks. Some 30 nations have com |
pulsory social insurance for wage earn
ers to protect them against interruption
of earnings from permanent disability |
Many of these systems have operated
successfully for several decades and
have weathered severe changes in eco
nomic conditions. The United States
and Spain are the only two countries
in the world which insure workers
against old age without insuring them
also against permanent or chronic dis
ability.
Some retirement systems in the Unit
ed States now cover disability-There is
nothing essentially foreign or new in
including disability protection with old
age insurance. Most public retirement
systems for government workers give
some protection against permanent dis
ability before retirement age. The Rail-
road Retirement Act and some large
private employer pension plans make
similar provisions for workers with long
years of service. The vast majority of
wage earners in the United States, how
ever, lack this protection except for
the disability Of old age-those past 65
Old-age and survivors insurance pro
lection is now reduced by permanent
disability workers who are now
contributing toward old-age and surviv-
ors insurance will lose the protection of
that program if they are permanently
disabled in their younger years or in
middle age. The amount of retirement
or survivor benefits for others may be
greatly reduced. II the old-age and
survivors insurance system included pro-
lection against permanent disability no
one who suffered such disability before