Furthermore, to reduce the risk a beneficiary faces in trading guaranteed monthly income and subsidized health coverage for the uncertainties of employment, the Congress has established various work incentives intended to safeguard cash and health benefits while a beneficiary tries to return to work. Structural and Operational Weaknesses in DI and SSI Impede Return to Work

In a series of reports, we have discussed how DI and SSI design and operational weaknesses do not encourage beneficiaries to maximize their work potential. As a result, the work capacity of DI and SSI beneficiaries may be understated. Beneficiaries have generally been uninformed about the availability of VR services and have been given little encouragement to seek them. Work incentive provisions that are complex, difficult to understand, and poorly implemented further impede return-to-work efforts. Encouragement to work from family, friends, health professionals, and coworkers was also critical, according to respondents. impairments cited these factors as helpful to being employed. Difficult Challenges and Trade-Offs Involved in Improving Work Incentives

Because the current work incentives have either impeded or played a limited role in helping beneficiaries return to work, the Congress and others have recognized the need to reform the current work incentives, particularly those in the DI program. In addition, changing work incentives may or may not increase the work effort of current beneficiaries, depending on their behavior in response to the type of change and their capacity for work and earnings. This point is emphasized by economists who have noted that improving work incentives may make the program attractive to those not currently in it. Social Security: Federal Disability Programs Face Major Issues (GAO/T-HEHS-95-97, Mar. 2, 1995). Additional copies are $2 each.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed return-to-work issues facing the Disability Insurance (DI) and Supplemental Security Income (SSI) programs, focusing on: (1) structural and operational weaknesses in the current DI and SSI programs that impede return to work; (2) factors that working beneficiaries believe are helpful in becoming and staying employed; and (3) challenges that exist in improving program incentives to work.

What GAO Found

GAO noted that: (1) program eligibility requirements and the application process encourage people to focus on their inabilities, not their abilities; (2) moreover, work incentives offered by the programs do not overcome the risk of returning to work for many beneficiaries, and the complexities of work incentives can make them difficult to understand and challenging to implement; (3) also, there is little encouragement to use rehabilitation services, which are relatively inaccessible to beneficiaries seeking them; (4) some DI beneficiaries who work despite these program weaknesses cited improved ability to function in the work place, resulting from successful health care, and encouragement from family, friends, health care providers, and coworkers as the most important factors helping them find and maintain work; (5) GAO's analysis of some of the proposed changes to work incentives--such as gradually reducing the DI cash benefit level as earnings increase--indicates that there will be difficult trade-offs in any attempt to change work incentives; and (6) moreover, determining the effectiveness of any of these proposed policies in increasing work effort and reducing caseloads would require that major gaps in existing research be filled.