A staff report prepared for the Office of Management and Budget warns that the increasing misuse of disability retirement programs by workers could lead to crisis proportions, citing D.C. police and fire disability programs as examples of past problems.
The report, obtained by The Washington Post, is being circulated to a number of state and federal agencies which deal with pension programs and the new President's Commission on Pension Policy.
In examples of two of the worst cases of disability misuse, the report cites programs in the military that until recently allowed 40 to 50 percent of retiring generals and admirals to retire on disability.
At one point in the District, 98 percent of police and firemen's retirements were for disability, the report said.
The report, which hasn't been endorsed by OMB, reveals a number of startling trends:
Per capita benefits, generally have grown more rapidly than workers earnings and the difference has been getting larger since 1970. Cash benefits are sometimes larger than the worker's predisability pay.
More people are calling themselves disabled because it is no longer considered a social evil.
Some programs never terminate disability benefits although the person receiving benefits may have recovered.
Despite marked increases in disability claims and benefits received, medical evidence shows no increase in physical or mental impairments.
Between 1965 and 1975 disability payments have grown from $10 billion, or 1.4 percent of the gross national product, to $34 billion, or 2.2 percent of the GNP.
Dramatic increases in persons requesting and getting benefits and larger cash payments "may be somewhat repeating the . . .'welfare crisis' of the 1960s..."
One of the report's findings is that "disability programs appear to be used -- or rather misused -- as a substitute for retirement programs. Incentives for such misuse include the higher benefits often available to the disabled, and the earlier age at which a person can cease working and collect a benefit if he is disabled."
Recently John W. Rhoads, 43, the former Prince George's County police chief who retired with a tax-free $29,700 disability pension from a claimed back injury, began seeking a $30,000 law enforcement job in Orange County, Fla.
One Prince George's County council member echoed some of the report's findings.
"It bears out my suspicions that he was looking for a loophole in our retirement system," Council member Sue V. Mills said at the time.
Others include former D.C. police chief Maurice J. Cullinane who retired on a $31,000-a-year tax-free disability; former assistant police chief Tilmon O'Bryant, who received about $33,000; and former D.C. Fire Chief Burton W. Johnson, who received about $29,000 in disability payments.
But not only prominent citizens take advantage of loopholes in disability programs, the report said. Social Security disability insurance, the largest single program, paid benefits to 1.3 million workers a decade ago. Today the number is 2.9 million although the covered work force has grown only about 30 percent, the report said.
It adds that, during the same time, there were 170,000 persons receiving federal civil service disability pensions and now there are more than 320,000, "although the covered work force has hardly changed in size."
The report also shows that from 1970 to 1975, for instance, the average nonsupervisory worker's spendable earnings in real, inflationary adjusted figures, grew by 0.1 percent while cash payments for Social Security disability insurance increased 3.5 percent, federal civil service disability benefits rose 5.5 percent and railroad program benefits grew by 4.3 percent.
The report distinguishes between impairment, a physiological or mental loss or abnormality, and disability, a health-related inability or limitation in performing roles and tasks. For example, it cites, "one person who loses the use of his legs may be unable to work, but another such person served for 13 years as president of the United States."
In another example the report said that some Sociel Security disabilities require that a person receiving disability cannot engage in any useful work and must take a prescribed rehabilitation course.
On the other hand, the federal civil service disability program does not require the claimant to try other work or seek rehabilitation and the person's job is not redesigned to accommodate him, the report said.