Industry News

On May 7, 2024, the Center for Retirement Research (CRR) at Boston College released its issue brief, Does Temporary Disability Insurance Reduce Reliance on Social Security? According to CRR, policymakers are considering access to paid leave for American workers including Temporary Disability Insurance (TDI). Some supporters believe that TDI may help to reduce reliance on Social Security’s Disability Insurance (DI). 

The findings indicate that:

• Access to TDI may significantly reduce DI applications, slightly decrease DI awards and increase employment for workers with severe disabilities.
• For those with less severe conditions, TDI may lead to earlier retirement for those with less severe conditions.

The brief concludes, “Policymakers at the state and federal levels are increasingly focused on expanding access to paid leave. Advocates argue that providing medical leave to older workers (TDI) may reduce their reliance on the federal DI program and keep them in the labor force.” It adds, “access to TDI does both: reducing the DI application rate and increasing employment up to four years after a health shock for workers with severe disabilities. These responses also result in a small decline in the disability rolls. On the other hand, for those with less severe conditions, who are unlikely to qualify for DI, TDI seems to lead to earlier retirement.”

The brief is available here.