We've tried to smooth disabled people's path back to work - It isn't helping

Paul Khouri, 34, has strong, broad shoulders from rock climbing. He loved talking to customers about the sport in the five years he worked at the outdoors outfitter REI on Rockville Pike - the good spots to climb outside in the area, and important things to know for safety.

But as the years went by, he was never promoted and was gradually called in for fewer and fewer hours of work. In time, he wasn't working enough to qualify for health insurance. And he had to have health insurance: Khouri was born with a rare condition that left him hard of hearing and with low vision, slightly slurred speech and hefty bills for the drugs that keep his endocrine system running smoothly.

So instead of going out and trying to support himself with another job, Khouri took the safer option: He applied for Social Security Disability Insurance and Medicaid. It was a long process, requiring visits to doctor after doctor. The final approval brought some relief - until he realized that returning to work would bring new complications. If he earned more than about $1,000 a month, he would quickly lose the medical assistance he desperately needed.

"It's really scary when you're worried about how much money you can make, because you don't want to make too much," Khouri said. "But at the same time, the benefits aren't enough." The average federal disability check is about $1,200 a month, which puts people right around the poverty line. Khouri lives in his parents' house to save on rent.

The prospect of falling over the "cash cliff," as the sudden drop-off in disability insurance is known, is part of what's keeping people with disabilities out of the workforce, despite programs put in place over the years to reduce that disincentive. In 2013, 31,591 people left the rolls because of employment, which amounts to less than one-half of 1 percent of beneficiaries.

And the problem has been getting worse. The proportion of working-age disabled adults in the labor force - that is, working or looking for work - fell from 25 percent in 2001 to 16 percent in 2014, continuing a long slide from the early 1990s. By contrast, the rate for the general population dropped from about 67 percent to 63 percent.

The disincentives built into disability benefits can be particularly acute in a high-cost area such as Washington, as Khouri has discovered. After he was approved for disability insurance, he got a full-time internship at Disability Rights International in Washington and was excited about getting his foot in the door in a field he was passionate about. But the position paid $15 an hour, threatening to put him over the earnings limit for his disability benefit, so he had to work most of his hours on a volunteer basis.

Fortunately, the organization specialized in disabilities, so it instantly understood the problem. "Had I done that with another job, they would've been like, 'Why?' - and it's really tough to have to explain that when you're a new person," Khouri said.

Researchers and advocates for the disabled say the cash cliff is baked into the very definition of "disability" for the purpose of earning benefits: To receive a subsidy, a person is required to prove an inability to participate in what is technically known as "substantial gainful employment." Trouble is, many find it hard to make the leap to regular work if the risk is losing coverage.

The federal government is aware of the problem. Over the past year, House and Senate committees held hearings on how to get more disabled people back to work. But at the end of October, Congress missed a key opportunity to make changes that many scholars have advocated: In heading off a financial shortfall for the nearly-exhausted Disability Insurance Trust Fund as part of the budget deal, it made only small programmatic adjustments.

Many attempts at reform have fallen short. To test recipients' ability to be self-sufficient, for example, the government has experimented with allowing them to earn unlimited money for a nine-month trial period before their benefits cease. There's also the "Ticket to Work" program, in which specialized support services are brought in to help people prepare for, and hold down, a job.

But participation in those programs is low, which disability rights groups attribute to their complexity and red tape. Sluggish record keeping has also resulted in tens of thousands of dollars in overpayments, which then have to be recovered, making many leery about participating.

All of that might not matter if it were evident that decent pay awaited on the other side of the thicket of rules and programs. But on average, correcting for certain demographic and labor market characteristics, people with disabilities are paid 37 percent less than their fully abled peers.

An enduring stigma - or a lack of understanding of what disabled people can accomplish - accounts for some of that disparity.

And there are other obstacles. After leaving REI, Khouri worked and interned for several disability rights organizations. Some of those employers, as conscious as they were of the need for special accommodations for various conditions, maintained office environments that were hard to navigate.

At one workplace, "the desks all faced the wall, so when someone's talking to me for 10 minutes behind my back, I have no idea what they're saying," he said. He finally asked one boss to email him instructions.

The Social Security Administration has been testing a mechanism that would make the cliff into more of a slope, decreasing disability insurance benefits by one dollar for every two dollars a person earns, with some positive early results.

More fundamentally, however, researchers say that disabled people need to be supported in returning to work as quickly as possible - the longer you spend away from work, the harder it is to return. The state-based vocational rehabilitation agencies could help with that, but a substantial funding increase would be needed in order to be up to the task.

There are other ways to build support systems for disabled people at work. The Netherlands, for example, shifted much of the responsibility for paying disability benefits to employers and required them to invest more in accommodations to help people keep working through their recovery. That helped improve employment rates and slow the rise of the number of people on the rolls.

There's general agreement among lawmakers to get more disabled people back to work - one of the rare pieces of common ground in Washington.

"That should be the spirit of (disability insurance). It will be there for you if you can't work," then-House Ways and Means Committee Chairman Paul Ryan, a Wisconsin Republican, said at a hearing in July. "But if you want to work, we won't get in the way. We should recognize everybody has something to offer. Everybody can contribute."