Resolving the Paradox of Payroll-Tax-Based Social Insurance for Disability: Lessons from the Canadian Disability Benefit Act

Mark C. Weber (DePaul University), Resolving the Paradox of Payroll-Tax-Based Social Insurance for Disability: Lessons from the Canadian Disability Benefit Act, (Osgoode L. Stud. Research Paper) (forthcoming 2023):

This paper discusses contributory social insurance for disability—a social scheme in which workers or employers or both pay into a government fund that is then used to pay pensions to workers who experience disability before the age at which they would ordinarily retire. These arrangements are common throughout the world, and are found in Canada and the United States. Although generally viewed as a successful policy innovation, plans of this type present problems. First, there are tensions with a central insight of the disability rights movement: that physical and mental impairments do not necessarily disable, and that disability should be addressed by creating accommodations in the workplace and the rest of the social environment rather than pensioning off individuals with impairments. Second, contributory social insurance typically privileges those people whose disabilities occur later in life, after they have amassed a work history, by providing a higher level of benefits based on earnings rather than the sub-poverty-level income maintenance amounts typically allotted those whose conditions, under current levels of accommodation, keep them perpetually in the fringes of employment or out of the labor force altogether. It seems likely that this inequality will be present with regard to the Canadian system of income support even after the Canadian Disability Benefit program is implemented. Social insurance for disability also entails other inequalities that might be considered problematic. This paper will put forward defenses of social insurance while acknowledging these inequalities. The paper will weigh public policy advantages and disadvantages of contributory social insurance for disability, drawing insights from the disability rights movement and taking into consideration differences among forms of disability and inequalities along the axis of the gender. It will also consider the impact of policy reforms, including the Canadian Disability Benefit, and suggest improvements in contributory social insurance inspired by the Canadian Disability Benefit.