Empirical Considerations of an Unsolved Conundrum: Disability Payments and Work

There is considerable evidence that among people with serious mental disorders receipt of disability income is associated with a reduced likelihood of participation in vocational rehabilitation programs¹ as well as of participation in competitive employment.^2,3 Even receipt of housing subsidies among homeless adults is associated with a reduced likelihood of employment.⁴ The negative association of disability benefits and employment likely reflects four separate processes: (1) an income effect (a receipt of disability income reduces the incentive or need for employment), (2) the direct effect of a disabling impairment (patients who are less capable of working because of poor health are more likely to receive disability benefits), (3) the SSA eligibility rules require beneficiaries earn no more than a minimal level in order to keep their benefits, and (4) apprehension about working, for fear of losing needed income and insurance benefits.

Although receipt of benefits has been associated with reduced sense of purpose, and greater anhedonia in one longitudinal study of early episode psychosis⁵ it seems unlikely that this represents an intrinsic worsening of underlying psychopathology but rather the secondary effect of reduced economic incentives for paid employment. It should be assumed that people with psychotic disorders respond to economic incentives much like others and the psychological consequences of their rational choices should not be understood as psychopathology.

It has been hoped that psychiatric rehabilitation, especially the Independent Placement and Support model might obviate the need for disability benefits altogether, but even the highly successful Mental Health Treatment Study of supported employment for SSDI recipients, which included reduction in financial disincentives for paid employment, showed limited increases in employment earnings, from $791 per month to only $1131 per month, with participant incomes still well below the poverty level⁶ and with only 0.2% earning their way out of their reliance on SSA disability.⁷

The overwhelming fact is that people with psychotic disorders are typically very poor. Among early episode patients in the RAISE ETP program, which included an effective rehabilitation component, most patients were not working after 2 years, and those who were working earned an average of only $900 per month,⁸ only half the average income of typical SSA beneficiaries 29–40 years of age.⁹

This brief review lends empirical support to the dilemma clearly identified by Collins et al (this issue) that disability benefits have some easily understood adverse effects but that these are outweighed by the prospect of deep poverty, reflected, perhaps most dramatically in the high risk of homelessness among people with psychotic disorders. There has long been widespread awareness of this dilemma and many policy efforts have been made to minimize these unintended adverse effects of disability payments, most recently the Ticket to Work program, but evidence of their effectiveness is weak at best.¹⁰ A Universal Basic Income program, with adjustments for severe disability, might substantially lessen the motivational problem but it is highly controversial and, while not currently feasible, should be evaluated. Such a program, which is becoming increasingly popular in the United States,¹¹ would allow people with psychotic disorders to decide whether or not to earn additional funds without facing the risk of abject poverty.

In the absence of an imminent solution to this dilemma, the policy must be guided by judgment about the balance between the magnitude of the adverse effects on motivation imposed on the already low level of disability benefits as compared to the effects of grinding poverty. Mental health researchers and providers may be inclined to put more emphasis on the psychological disincentive effects because that is their area of specialization. While understandable, this should not occasion insensitivity to the life-threating effects of poverty, which has its own adverse effects on mental health.