When you have a long-term illness or disability and struggle to pay your bills, aid programs can be the light at the end of a very long tunnel. The trick to reaching that light is understanding the difference between various aid programs and their requirements for eligibility.
SSI (Supplemental Security Income) and SSDI (Social Security Disability Insurance) are two programs that are both administered by the Social Security Administration and that offer benefits to disabled individuals. However, this is where the two program’s similarities end. It’s important to know the difference between the two so that you don’t waste time, money, and energy applying for the wrong program.
Below, we explain the main differences between SSI and SSDI.
Supplemental Security Income (SSI)
The Supplemental Security Income is a program funded by general taxes that serves individuals who are blind or disabled as well as those over 65 years of age.
This program is need-based, which means that you must have limited income and assets (less than $2,000 for an individual and $3,000 for a couple) in order to be eligible for the program. It is designed to provide basic needs, helping people who would otherwise be unable to pay for food and shelter.
SSI offers cash benefits, paid on the first of every month. The monthly payment is calculated by starting with the Federal Benefit Rate (FBR) of $735. (Each year, the FBR is adjusted to account for inflation and cost of living increases.) Then, any countable income is subtracted, and finally the state supplement (if any) is added. In addition to this, SSI offers access to Medicaid, a joint state and federal health insurance program, in order to help pay for health care costs.
SSI, unlike, SSDI, is not tied to your work history. This means that you can apply for SSI regardless of the number of years you have worked.
In the SSI program, there is no waiting period to receive benefits. If your application is accepted, you will begin receiving benefits on the first day of the month after your acceptance.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance is a program funded by payroll taxes. This means that your eligibility for this program is directly tied to your work history. The program offers cash benefits as well as health insurance through Medicare.
SSDI determines whether a person may receive benefits through a somewhat complex system, based on covered earnings which are the wages you paid Social Security taxes on while working. The Social Security Administration (SSA) uses your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA) to come up with your monthly benefits amount. To find your AIME, the SSA will look at what you earned over up to 35 working years. Your PIA, on the other hand, is the total of three fixed percentages taken from your AIME. As you can see, it’s a fairly complicated algorithm.
To give you an idea of the payments that people on SSDI receive, in 2017, the average benefit amount is $1,171 a month. The max monthly benefit amount is $2,687.
In addition to this system, SSDI requires that an individual pass two tests: the “recent work test” and “duration of work test.” The requirements for each test vary based on the person’s age. The older you are, the longer you must have worked in order to be eligible. Like the name suggests, the recent work test requires you to have worked in recent years. If, for example, you apply at age 24, you must have worked for 1.5 of the past three years. The duration work test requires you to have worked a certain number of years total. If you became disabled between the ages of 31 and 42, you need to have earned 20 credits and worked five years.
The SSDI program, unlike the SSI program, also offers benefits to the disabled individual’s family. Spouses, ex-spouses, minor children, stepchildren, and even grandchildren can qualify for SSDI benefits. In some circumstances, the surviving family of a person with disabilities may collect benefits.
A spouse qualifies for benefits if he or she cares for the disabled person’s minor children (up to age 16) or if her or she is 62 years old (or older) and can’t get Social Security benefits alone. An ex-spouse can get benefits upon turning 62 if he or she was married to the disabled individual for at least 10 years and the disabled individual never re-married.
The amount of auxiliary benefits (those given to the family) is up to 50 percent of the disabled person’s monthly amount. The maximum family amount is 150 percent of the disabled individual’s benefits. For example, if you are eligible for $1,000 monthly and have a spouse and two children, your maximum family amount would equal $1,500.
In addition, since getting approved for SSDI can take quite a bit of time, when you are approved, you may qualify for back pay. The number of months of back pay will depend on when you applied and the date the Social Security Administration approved you (also known as your established onset date).
If you have not worked enough to be eligible for SSDI, you may still be able to get SSI benefits if you can show that you have financial need.
In the SSDI program, there is a five-month waiting period before you begin to receive benefits. There are some exceptions to this rule; if you are applying for dependent benefits, for example, you do not have to wait.
In some cases, a person can receive both SSI and SSDI benefits. This can happen if the person receives very little assistance from SSDI. In this case, the person may receive SSI benefits to bring his or her total benefits to $735 (the FBR). It’s important to note that a person still has to meet the means requirement of SSI to receive benefits from both programs. A disabled individual with a high income or a lot of assets won’t qualify for SSI, no matter how little he or she receives from SSDI.
We’re Here to Help
Navigating the SSI and SSDI programs can be very complicated, and it can be difficult to do on your own. These programs deny 70 percent of first-time applications; Casper & Casper Law is here to make sure that yours isn’t one of them. We’ll advocate on your behalf so that you receive the SSI or SSDI benefits that you are entitled to.