A Behavioral Economics Assessment of Social Security Disability Insurance Earnings Reporting Documents

Background

Social Security Disability Insurance (SSDI) beneficiaries who work are often overpaid, with a median overpayment amount of over $9000. These overpayments occur when the Social Security Administration (SSA) pays benefits to beneficiaries not entitled to them because of work; beneficiaries are required to repay the debt to SSA. Work-related overpayments most often occur because beneficiaries work but do not follow SSDI program rules to report earnings and evidence suggests that SSDI beneficiaries are often unaware of reporting requirements.

Objective

To assess written earnings reporting reminders that SSA makes available to SSDI beneficiaries as a way of diagnosing a potential barrier to earnings reporting that contributes to overpayments.

Methods

Using insights from the behavioral economics literature, this article provides a comprehensive diagnosis of SSA's written communications that include earnings reporting reminders.

Results

Beneficiaries are infrequently notified or reminded of requirements, especially at points in time when that information is actionable; the content is not always clear, salient, and urgent; relevant text can be hard to find; and communications rarely emphasize how easy it is to report, what needs to be reported, deadlines for reporting, and the consequences of failing to report.

Conclusions

Potential shortcomings in written communications may contribute to limited awareness about earning reporting. Policymakers should consider the benefits of improving communications about earnings reporting.