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As Economy Struggles, More Get Federal Disability Benefits

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Disabled workers in New Jersey receiving federal benefits have increased nearly 40 percent in a decade, part of a nationwide surge in people leaving the work force for disability aid.

The Social Security Administration recently said the disability trust fund will be depleted by 2016.

"The recession is a large part of it. It lasted so long that people got discouraged," said Richard Perniciaro, director of Atlantic Cape Community College's Center for Regional and Business Research. "You read all kinds of accounts of the long-term unemployed who won't go back to work after age 55. They test the waters with disability."

And more worker conditions now count as disabled, at least under the revised definitions of the law, Perniciaro said.

"We've gotten much more in tune with medical disabilities. We've accepted more and more of it through the Affordable Care Act," he said.

The surge in benefits has prompted increased scrutiny, and Brigantine resident Craige Werner, 28, said he is afraid disabled workers will face an unfair public backlash. Werner has muscular dystrophy and uses a ventilator to help him breathe. He receives $720 per month in federal disability benefits and relies on family and his girlfriend for daily help at his Brigantine home.

Werner said he doubts large numbers of unemployed workers in New Jersey are using phantom injuries or illnesses to get fraudulent disability benefits. The application process, in his experience, is rigorous and thorough.

"It's a small minority of people who commit fraud that people hear about," he said. "There is fraud. Any time you're dealing with any program like this, there's going to be some amount of fraud."

The Office of Inspector General launched 31 investigations of disability fraud in New Jersey between October and March, but ended up ceasing benefits in just three cases, saving $270,375.

A bigger national problem, the agency found, was inefficient termination of benefits once a medical review determines injured or sick workers are well enough to work again. In nearly 1 in 3 cases audited from 2005 to 2010, workers continued to receive benefits two months or more after a periodic medical review cleared them to return to work.

The Social Security Administration approved 76,983 disability applications nationwide in April, bringing the total disabled receiving federal aid to an all-time high of 12 million people.

More than 80 percent of them, or 8.8 million people, are disabled workers. About 18 percent, or 1.9 million, are children. And fewer than 2 percent, or 160,000, are spouses of disabled workers.

Compare that with 1990, when there were barely more than 3 million recipients of federal disability benefits.

In New Jersey in 2011 there were 211,385 workers ages 18 to 64 receiving disability benefits, a nearly 40 percent increase from the 151,947 in 2001.

With nearly 4 percent of its total working population on disability, New Jersey ranks near the middle of the 50 states. Alabama, Mississippi and West Virginia each has more than 10 percent of its adult work force on disability.

Social Security pays New Jersey's disabled workers $237 million each month -- and $260 million in all for their families.

The Congressional Budget Office expects disability beneficiaries to continue to climb over the next decade, albeit less sharply than in the past decade. The expanding rolls have drawn scrutiny from policy analysts.

"Some have argued that the programs have become relatively more attractive to low-wage individuals and those with moderate disabilities, especially during economic downturns," economist Jeffrey Hemmeter wrote in a study this year for the Office of Retirement and Disability Policy.

Nearly two in five workers in New Jersey receiving disability benefits do so because of a mental disorder such as schizophrenia or depression. One in four disabled workers can't work because of musculo-skeletal injuries or connective-tissue damage such as a bad back or torn shoulder.

Disability fraud makes easy headlines. For example, a North Carolina postal worker who claimed that pain kept her from reaching or lifting was convicted of fraud this year after riding a zipline on a Caribbean cruise and spinning the Big Wheel on "The Price is Right."

The Office of Inspector General cracked down on Social Security fraud in October, launching the first of 3,963 investigations that led to the arrest of 275 people nationwide and $170 million in savings.

One possibility for funding disability benefits beyond 2016 would be to siphon money from the larger Old Age and Survivors trust fund that the Social Security Administration pays retirees. The funds combined could last until at least 2033.

Experts say there are several reasons more Americans are seeking disability benefits.

Some states are leading efforts to shrink their state-funded welfare rolls by pushing welfare recipients onto federally funded disability programs.

Some point to the downturn in the economy, which drives unemployed workers who can't find jobs to seek alternatives such as public support. Social Security approves about 1 in 3 applications for federal disability. Injured or disabled workers sometimes must apply multiple times before receiving approval.

Since the recession in 2007, the agency has approved nearly 1 million new applicants each year.

Werner said more disabled workers in New Jersey are eligible for public benefits because of lost salary from downsizing, layoffs and other cutbacks from the recession. Disabled workers who work generally receive less in public benefits on a sliding scale that reflects their income.

The Congressional Budget Office found that while economic downturns historically boost applications for disabled benefits, they do not necessarily lead to more claims being granted.

But Kathy Ruffing, a senior fellow at the Center on Budget and Policy Priorities, a liberal think tank in Washington, said there is a much less nefarious reason behind America's increasing disability enrollment. The American work force is getting older, working longer and is subject to more disability-related issues.

"The important message is that most growth in the program stems from demographics. Some of the growth stems from the economic downturn. None of it has been shown to come from program abuse," she said.

Disabled workers face hurdles such as transportation that present a challenge for much of the rest of the work force in South Jersey.

Cape May County's Fare-Free Transportation program gives some disabled workers transportation to and from their jobs. The program provided 168,892 trips in 2012 for its disabled, impoverished or elderly clients.

"Given the logistics of the county's geography, transportation is a huge barrier, which is why they rely on us so heavily," said director Lisa Damico, of Lower Township. "We try to help people as much as we can."

Damico said it is not always easy for disabled workers to get a ride from a friend or family member.

"The average person might have access to a vehicle but not to wheelchair loaders. They don't always have a way to move handicapped accessories," she said.

Like many other social-service programs, Fare Free is facing the prospect of funding cuts from the state grants upon which it relies. Damico said the program is looking at alternatives to raise money, including billboard advertising on its buses and seeking reimbursement of certain costs through Medicare.

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