Understanding the Disparate Impacts of the Social Security Disability Insurance Family Maximum Rules

Many dependents of DI beneficiaries – including spouses caring for children, and minor and disabled children – are eligible for additional DI payments. The aim of this project is to understand how the DI family maximum rules affect the economic security of households with DI beneficiaries, and whether the application of these rules increases or decreases socioeconomic disparities. To do this analysis, I use the Consumer Expenditure Survey and the National Beneficiary Survey as two complementary data sources. I present information on differences by “potential dependents” – children aged under 18 and spouses where such children are present. I find that there are large gaps in income and expenditure between DI and working households that generally increase with the number of potential dependents. More surprisingly, larger DI households generally have lower incomes than smaller DI households. Having the lowest absolute income is particularly concerning when one considers that no adjustments are made here for the number of people in a household. Given that DI is generally providing similarly sized dependent payments for one dependent as for multiple dependents, and lower dependent benefits for DI beneficiaries with poor earnings histories than for DI beneficiaries with better earnings histories, these results suggest that DI is doing better at insuring smaller households with dependents than larger households. The Social Security Administration (SSA) could consider doing more in general for DI beneficiaries with dependents, especially those with many dependents.