NCPA - National Center for Policy Analysis

Reforming the System of Review by Administrative Law Judges in Disability Insurance

September 18, 2015

The Social Security Disability Insurance (SSDI) program is going to be bankrupt by the end of 2016. The prevalence of disability in the working-age population has not increased, so why has the SSDI enrollment rate skyrocketed? A new study points to administrative law judges (ALJ) as the cause for the large taxpayer losses. By appealing to an ALJ, an applicant, even if denied twice before by the Disability Determination Service, can be awarded disability benefits. The decisions of these "outlier" judges will cost over $72 billion in the next 10 years.

Judges who continue to grant unnecessary disability benefits could cost the economy financially and increase the number of capable workers not contributing to the economy. Based on the study, analysis the following recommendations were made:

  • End lifetime ALJ tenure and implement a 15- year term limit.
  • Cap the number of cases heard by ALJs at 500 per year.
  • Require the Social Security Administration to conduct preeffectuation reviews of ALJ allowances.
  • Eliminate cases without proper documentation known as "on-the-record decisions."
  • Prevent anyone from applying for disability benefits more than once in a three-year period.
  • Increase accountability of ALJs by escalating the number of random reviews of ALJ decisions.

Source: Mark J. Warshawsky and Ross Marchand, "Reforming the System of Review by Administrative Law Judges in Disability Insurance," Mercatus Center, September 10, 2015.

 

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