Impacts of the 2010 VA PTSD Rule Change on SSA Disability Program Participation

Background: In July 2010, the U.S. Department of Veterans Affairs (VA) introduced a new rule on post-traumatic stress disorder (PTSD) simplifying the process for obtaining disability compensation (DC) for veterans with PTSD. The new regulation eased the burden of proof for veterans who served in war zones but in non-combat roles. In previous work, we showed that self-reported rates of cognitive disability and VA disability compensation receipt increased significantly among combat zone veterans following the rule change. The present work examines whether the VA PTSD rule change is associated with increased or decreased receipt of Social Security Disability Insurance (SSDI) and Social Security Insurance (SSI) among veterans who self-report a cognitive disability. Because of the different requirements for SSDI, SSI, and DC, it is ex ante unclear whether VA DC and SSA benefit programs are complements or substitutes.

Study Design: We use the Annual Social and Economic Supplement (ASEC) of the CPS matched to SSA administrative data for the years 2009-2016. At present, we have preliminary results using just the public-use CPS-ASEC data and are in the process of including matched data that replaces self-reported proxy variables from the CPS-ASEC with administrative data as recorded by SSA. We use a difference-in-differences model with a matched comparison group using propensity score matching (PSM). We restrict the sample to individuals who self-report having cognitive disability and generate a comparison group of non-veterans who resemble the veterans in this subpopulation on observable characteristics. Designating 2009-2010 as the pre-period, we examine the impact of the rule change on SSDI participation, SSI participation, self-reported work disability, and VA DC receipt.

Principal Findings: We find that, following the 2010 PTSD rule change, SSDI participation among veterans fell relative to non-veterans. Before the rule change, veterans were more likely than non-veterans to be SSDI beneficiaries, whereas after the rule change they were less likely. We do not observe a substantial change in SSI receipt following the rule change. Our difference-in-difference estimates are not statistically significant using 2011 as the first post-rule change year. However, our descriptive results show that departures from trend are not seen until 2012. Given the long application and acceptance processes for Social Security benefits programs, it is likely that impacts would take effect with a lag. Indeed, sensitivity analyses using 2012 as the first year of the post period result in statistically significant estimates of the impact of the rule change on SSDI receipt. We also find that the rule change increased self-reported VA DC receipt and decreased self-reported work disability. The decrease in work disability could be related to the fact that DC benefits are not contingent on ongoing inability to work.

Conclusions: Our results indicate that VA DC and SSDI are substitute sources of income for veterans with disabilities, and that increased access to DC benefits for veterans with cognitive disability can not only reduce reliance on Social Security benefits programs, but can also reduce self-reported work disability.