Massive Layoffs, Cause of Delay in Claimants' Benefits

April 12, 2009

Baltimore, Maryland - Social Security Administration (SSA) commissioner Michael Astrue has announced that benefits of thousands of Americans with severe disability are postponed due to massive layoffs implemented by local officials and businesses.

In an interview, SSA commissioner Michael Astrue said that many local officials’ response to the financial crisis “is illogical” and has delayed benefits and claims of disabled people.

For the past few months, state’s officials have resorted to hiring freeze, workforce reduction, and unpaid leaves to workers in line with its cost-cutting measure amid financial crisis.

California governor Arnold Schwarzenegger even ordered state employees to have two days of unpaid leave until June 2010.

Meanwhile, the SSA commissioner wrote a letter to Schwarzenegger to express his concern over the decision.

Astrue said that resorting to such measures “will not allow the states to save money but only delays disability claims of people who need this monthly financial assistance for their everyday living.”

Meanwhile, the SSA said that disability claims will rise to nearly 3 million this year compared to 2.6 million in 2008. With this increase, the agency estimated that it spends more than $12 billion every month in paying for disability benefits of 13 million recipients.

According to some experts, the rise of disability claims is not surprising as this usually happens when the economy is in recession and there are massive layoffs happening in a country.

In February, President Barack Obama has signed the $500 stimulus package that will be used to finance disability claims.