SSDI and SSI - Understanding the Programs and How They Can Help You
by Don Drake, Connelly Law Offices, Ltd. 9.8.24
"The distinction between Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) often creates a great deal of confusion, prompting us to address these variances multiple times yearly in our blog," explained RJ Connelly III, a professional fiduciary and certified elder law Attorney. "Both programs employ identical medical criteria to assess disability based on medical evidence and functional capabilities, and they fall under the jurisdiction of the Social Security Administration, contributing to the misconceptions surrounding their disparities."
SSDI is classified as an "entitlement" program, with benefits supported by Social Security taxes paid by workers, employers, and the self-employed. These taxes are designated to specific trust funds. Eligibility for these benefits depends on an individual's work history or, in some cases, their spouse's or parent's work history. The benefit amount is based on the individual's earnings.
In contrast, SSI is a needs-based program designed for individuals with limited income and resources. Here, resources refer to an individual's assets or possessions. Unlike the Social Security benefit programs, SSI is financed by general tax revenues rather than the Social Security trust funds. The benefit amount is determined by Federal and State laws, taking into consideration the recipient's place of residence, household composition, assets, and total income.
With that in mind, let's look at SSDI and SSI - Understanding the Programs.
Supplemental Security Income
Supplemental Security Income (SSI) is a vital program that provides financial support to individuals with limited income and assets. This program is based on financial need rather than a recipient's work history, and it is financed not by the Social Security trust fund but by general tax funds.
Eligibility for SSI necessitates very constrained income and assets, and qualified individuals may also be entitled to Medicaid in the state of their residence based on income requirements. Furthermore, SSI recipients may be eligible for food stamps, with the amount received contingent on their location and monthly income.
To qualify for Supplemental Security Income, individuals must meet the Social Security Administration's (SSA) disability criteria. These criteria signify an inability to engage in substantial gainful activity due to a lasting or expected-to-last medical condition or a condition resulting in death.
Moreover, SSI applicants must possess limited assets of less than $2,000 (or $3,000 for a married couple), with select assets such as a primary residence and one vehicle not factored into this limit.
Income plays a pivotal role in SSI eligibility, with individuals with minimal income from any source more likely to qualify. SSI payments are reduced by each dollar of countable income received, with the government considering various sources of income, including non-cash assistance.
The maximum SSI payment for 2024 is $943 per month for an individual and $1,415 monthly for a couple.
State Supplements for SSI
The SSI State Supplemental Payment (SSP) program provides a supplementary sum to individuals receiving federal Supplemental Security Income (SSI) and certain non-SSI recipients. This program aims to assist low-income individuals with disabilities and elderly adults with limited resources to cover their daily expenses.
Rhode Island offers varying supplement amounts depending on the living arrangement. For individuals residing in their household, the supplement is $39.92 per month, while those living in the household of another receive $51.92 per month. Couples residing in their household are entitled to $79.38 per month, and those living in the household of another qualify for $97.30 per month. Moreover, individuals in a Title XIX facility are eligible for a supplement of $20.00 per month.
In Connecticut, residents receiving Supplemental Security Income (SSI) may be eligible for a state supplement of up to $150 per month in additional cash assistance. This supplement is available for individuals living independently and does not apply to those residing in a boarding home or residential care facility.
In Massachusetts, the 2024 Supplemental Security Income (SSI) State Supplement (SSP) varies based on living arrangement and disability status. Individuals with shared living expenses receive $30.40 per month, while those in assisted living receive $454. Individuals living independently are eligible for a supplement of $114 per month, and married couples with disabled spouses can receive up to $528.50 per month.
Social Security Disability Insurance
The Social Security Disability Insurance (SSDI) program is funded through the payroll taxes of employed individuals. Those who receive SSDI benefits are considered "insured" due to their work history and contributions to the Social Security trust fund through Federal Insurance Contributions Act (FICA) Social Security taxes. Eligibility for SSDI requires a specific number of work years, a defined number of work credits, and an age limit of sixty-five.
After receiving SSDI benefits for two years, disabled individuals become eligible for Medicare. Additionally, under the SSDI program, the spouse and dependent children of a disabled individual are entitled to receive partial dependent benefits. However, only adults over eighteen can receive the SSDI disability benefit.
A mandatory five-month waiting period for benefits requires claimants to wait five months after becoming disabled before receiving SSDI benefits. Once the waiting period has passed, the monthly benefit amount is calculated based on the individual's earnings record, similar to the Social Security retirement benefit calculation.
Approval rates for SSDI are generally higher than those for Supplemental Security Income (SSI). To qualify for SSDI benefits, individuals must meet medical and non-medical criteria. The medical requirement involves meeting the government's definition of disability, rendering the individual unable to work for at least a year due to a medical condition outlined in the SSA Blue Book. Additionally, individuals must have worked and paid taxes for specific years, typically requiring forty work credits for eligibility.
Earning up to four credits each year is possible, with the required amount for a work credit subject to change from year to year. For instance, in 2024, 1 credit can be earned for each $1,730 in wages or self-employment income, and four credits can be earned once $6,920 is earned for the year.
Social Security Disability benefits can remain active if the individual is disabled. If benefits are received until age 65, SSDI benefits will cease, and retirement benefits will commence. In essence, SSDI benefits transition to Social Security retirement benefits. In 2024, the maximum monthly amount an individual can receive from the SSDI program is $3,822.
In 2024, individuals receiving Social Security Disability Insurance (SSDI) can earn up to $1,550 a month ($2,590 for blind workers) without any reduction in benefits. This provision can double a beneficiary's income, receiving the average benefit of $1,538. During a nine-month trial work period and a three-month grace period, beneficiaries may earn unlimited amounts without jeopardizing their benefits while testing their ability to return to work. Furthermore, SSDI beneficiaries are eligible for extended Medicare coverage to assist their transition back to the workforce. Given the relatively low SSDI benefits, it is expected that beneficiaries would seek to supplement their income by taking advantage of these provisions if they can do so.
Mix of SSI and SSDI?
Qualifying for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) is possible and offers two key advantages. Firstly, applying for both programs may result in higher monthly payments. Additionally, while there are waiting periods for SSDI, SSI does not have the same waiting period. Consequently, if you are approved for benefits quickly but still have to wait for your first SSDI check, receiving interim SSI payments can provide essential financial assistance.
It is important to note that not everyone will meet the criteria for both programs. Nonetheless, there is no disadvantage in applying for both as long as accurate information is provided. SSI and SSDI utilize the same application process, and in certain scenarios, applying for both can be beneficial. You may receive what the Social Security Administration (SSA) terms "concurrent" benefits if eligible for both.
Although anyone may apply for SSI and SSDI simultaneously, specific circumstances require submitting a dual application. For instance, if immediate financial support is necessary due to an anticipated quick disability approval, applying for both programs is advisable. SSI payments commence upon application approval, while SSDI has a five-month waiting period.
Moreover, if immediate health insurance is needed, Medicaid can be obtained through SSI once the application is approved. Conversely, SSDI has a 24-month waiting period before Medicare benefits can be received. If immediate benefits are required, applying for SSI is advisable. While SSDI may offer greater long-term benefits, it entails several waiting periods before benefits can be received, even after prompt application approval.
A Final Word
"Both Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are designed to provide financial assistance to individuals who are unable to work due to disability," said Attorney Connelly. "The eligibility for each program is determined by various factors, such as work history, financial resources, and the benefits each program offers. Determining the most suitable program for an individual requires careful consideration of these variables."
Please note that the information provided in this blog is not intended to and should not be construed as legal, financial, or medical advice. The content, materials, and information presented in this blog are solely for general informational purposes and may not be the most up-to-date information available regarding legal, financial, or medical matters. This blog may also contain links to other third-party websites that are included for the convenience of the reader or user. Please note that Connelly Law Offices, Ltd. does not necessarily recommend or endorse the contents of such third-party sites. If you have any particular legal matters, financial concerns, or medical issues, we strongly advise you to consult your attorney, professional fiduciary advisor, or medical provider.
Comments