There are a lot of people who think that Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are the same, and many use the terms interchangeable for programs that are very different. This article will explain the difference, how the programs are funded, who is eligible, who can receive benefits, and how much they pay.
How the programs are funded:
Social Security Disability Insurance (SSDI) is a program funded by social security taxes paid by workers, employers, and the self-employed. This means that the program is based on an employee’s past work history and is not a welfare program. The money used to fund this project is usually taken right out of an employee’s paycheck by their employer each pay-period. This deduction is commonly known as “FICA.”
Social Security Income (SSI) is funded through general revenues from taxes, and has no relation to your work history. This welfare based program is funded by the general tax revenue and has no relation to past work history. Each recipient receives a payment based on their need, if their income and assets are below a certain threshold.
To be eligible for SSDI benefits, the worker must earn sufficient credits based on taxable work credits to be insured for social security purposes. An employee can earn a maximum of four quarters each year, and you generally need 20 credits from the time the individual became disabled to be eligible. If you are under the age of 31, certain exceptions apply.
Finally, in order to receive the benefit, you must be a disabled worker, a widow(er), or an adult disabled since childhood. You must be under the age of 65 and have a significant physical or mental condition that is expected to last for at least 12 months, or a condition that is expected to result in death.
To be eligible for SSI, the recipient must have limited income and their resources must meet the living arrangement requirements. In addition, the recipient must be a United States citizen or national, or in one of certain categories of aliens. If this is met and your income and assets are below the eligibility levels, you are entitled to disability benefits.
For an individual to be eligible, their assets must be below $2,000. A married couple is eligible if they have combined assets below $3,000. There are also asset limits for families with children. For a complete list, please see the list at USA.gov. Assets typically include real estate, bank accounts, cash, stocks, and bonds. Some of the things excluded include the individual’s primary home, life insurance policies with face value of $1,500.00 or less, a vehicle (regardless of value if used as a primary transportation for the family), burial plots for individual members of his or her immediate family, and up to $1,500 in burial funds for the individual. Possessions may also be excluded if the resource cannot be readily liquidated, e.g., within 20 days, obviously with certain exceptions per case.
SSDI – The amount of the monthly disability benefit is based on the Social Security earnings record of the insured worker. This means that the amount is directly related to the amount of time you have been in the work force and the amount of money that you were earning during that time period. This is never a guaranteed amount of money. Things like workers’ compensation or state compensation benefits may reduce the amount paid by SSDI.
SSI – The monthly payment varies up to the maximum rate set by the federal government, which is often supplemented by the recipient’s state. The maximum federal benefit rate is $674.00 for an individual and $1,011 for a couple to help meet the costs of basic needs of food and shelter. Individuals who receive SSI are usually eligible to receive other benefits, such as food stamps, energy assistance, and section 8 housing. They may also be eligible for Medicaid and supplemental income from the state through the state’s supplemental program. States like Massachusetts will increase the cash assistance by over $100 for disabled individuals living independently.
SSI benefits will continue for as long as the individual is disabled. If medical improvements of the individual’s condition is possible, his or her case may be reviewed periodically to determine if he or she is still disabled. If the individual has enough credits from his or her work history to receive social security retirement benefits, he or she must apply for early retirement at age 62.