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Committee Staff Report On The Disability Insurance Program

Creator:  House Ways and Means Committee (authors)
Date: July 1974
Source: Social Security Online History Page

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The Development of the Disability Program Under Old-Age Survivors Insurance, 1935-74

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CONSIDERATIONS OF DISABILITY INSURANCE, 1935-39

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(a) The 1935 Report to the President of the Committee on Economic Security -1-

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-1- See hearings before the Committee on Ways and Means, 74th, Cong., 1st sess. (1935), on H.R. 4120, p. 17 et seq.

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This report recognized the problems of earnings lost during periods of disability, but specific consideration was not given to the problems of perma-nent and total disability.

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(b) The Final 1938 Report of the Advisory Council on Social Security to the Senate Committee on Finance -2-

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-2- See hearings relative to the Social Security Act Amendments of 1939 before the Com-mittee on Ways and Means, vol. 1, p. 18 et seq.

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The Council recognized the desirability of providing benefits to an insured person who becomes totally and permanently disabled and to his dependents. However, a difference existed in the Council on the timing of the introduction of these benefits. Those in favor of immediate introduction argued that perma-nently disabled persons (except the blind) were the only category of permanent social casualties who receive no insurance or assistance under the Social Security Act, and that no other group was more completely dependent or in a more desperate economic situation. Those Council members in favor of further study before establishing disability benefits argued that costs were unpredictable and that the initiation of the new benefits should wait until probable total program costs could be more accurately projected. They also envisioned many difficult administrative problems of a character apart from the rest of the program, such as the necessity for a skilled staff to make disability determinations in each case and for intensive and sustained local investigation to prevent abuses.

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(c) The 1938 Annual Report of the Social Security Board to the President -3-

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-3- Ibid, p. 3 et seq.

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In recommending changes in the Social Security-Act, the Board gave considerable thought to whether the system should be espanded -sic- to include pro-visions for benefits to workers who become permanently and totally disabled, before reaching age 65, and to their dependent's. Recognizing the difficult but not insuperable administrative problems and the increased cost of the provision, the Board made no positive recommendation. The Board did state that the extent of the increase in costs would depend upon the definition of disability, and that a strict definition at the beginning would keep costs within reasonable limits. Later, with experience, the definition could be made more liberal if this was considered socially desirable. It was suggested that any plan for permanent total disability insurance should have adequate provisions for hospitalization and other institutional care, and vocational rehabilitation.

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(d) The 1939 Report to the President on National Health by the Interdepartmental Committee to Coordinate Health and Welfare Activities -4-

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-4- H. Doc. No. 120, 76th Cong., 1st sess. (1939).

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After a survey of the problems of disabled persons, the Committee con-cluded that wage earners and their families need protection against loss of income during periods of temporary or permanent disability. The Committee recommended the development of social insurance to replace in part wages lost during temporary or permanent disability. It suggested that insurance against permanent disability should be effected through a liberalization of the old-age insurance system, paying benefits at any time prior to age 65 to qualified workers who become permanently and totally disabled.

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(e) Social Security Act Amendmenta -sic- of 1939

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There were no provisions on disability in the 1939 amendments to the Social Security Act; nor was any mention made of disability in the Committee reports accompanying the bill which later was enacted by the Congress.

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Considerations of disability insurance, 1940-50

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(a) Annual reports of the Social Security Boardjrom -sic- 1940 to 1950

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Throughout this period, the Social Security Board (and its successor, the Social Security Administration) recommended in its annual reports the payment of social insurance benefits to permanently and totally disabled persons. Some of the specific proposals made to implement this recommendation were as follows:

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(1) Benefits should be payable only after a 6-month waiting period and then only if the disabled-person dad -sic- been in covered employment within a reasonably recent period, for a reasonably substantial time, and with reasonably substantial income.

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(2) Benefits should be paid to dependents of disabled workers.

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(3) Vocational rehabilitation for beneficiaries should be financed from the trust fund.

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As for the definition of disability, the Board stated that for "permanent" disability to imply a concept of lifetime disability, requiring a medical prognosis of permanency, was socially and administratively unsatisfactory. Instead, benefits should be paid for loss of earnings after a suitable waiting period (6 months) and for the duration of total incapacity for substantially gainful work.

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