What’s the Difference between Social Security Disability Insurance (SSDI) & Supplemental Security Income (SSI)?

The Social Security Administration (SSA) manages the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. While both of these programs offer cash benefits for people with disabilities, the eligibility requirements for each are different.

What Is SSDI?

SSDI is funded through payroll taxes. To get SSDI, you must be an adult between the ages of 18 and 64 and have earned a certain number of “work credits” by working and paying into the Social Security system for a certain amount of time. After you receive SSDI for two years, you’ll become automatically eligible for Medicare.

Under SSDI, the spouse and children of a person with a disability are eligible to receive partial dependent benefits even if they don’t have a disability themselves.

Social Security disability benefits are paid after you have been disabled continuously throughout a period of five full calendar months. Disability benefits are paid beginning with the sixth full month after the date your disability began.  You’re not entitled to benefits for any month during this five-month waiting period. The amount of the monthly benefit after the waiting period is based upon how much you’ve earned while working.

What Is SSI?

SSI is a program that is strictly need-based, according to income and assets, and is funded by general fund taxes. To meet the SSI income requirements, you must have limited income and resources.

An adult or child who has a disability must meet all of the following requirements:

  • Have limited income;
  • Have limited resources;
  • Be a U.S. citizen or national or in one of certain categories of aliens; and
  • Live in the U.S. or Northern Mariana Islands.

Social SecurityThe monthly payment is based strictly on financial need and varies up to the maximum federal benefit rate. Some states add money to federal SSI payments. Approval for benefits generally takes three to six months. Once you’re approved for SSI, you’ll get benefits retroactive to the date of your application.

If you have a disability which prevents you from working, and you appear to meet all other eligibility requirements, it is possible to get SSI earlier. Sometimes on the day you apply.

In most states (including Michigan), people who get SSI are automatically eligible for Medicaid.

What Does “Disabled” Mean for an Adult?

If you are age 18 or older we may consider you “disabled” if you have a medically determinable physical or mental impairment (including an emotional or learning problem) which:

  • results in the inability to do any substantial gainful activity; and
  • can be expected to result in death; or
  • has lasted or can be expected to last for a continuous period of not less than 12 months.
What Income Does Not Count for SSI?

Examples of payments or services Social Security does not count as income for the SSI program include but are not limited to:

  • the first $20 of most income received in a month;
  • the first $65 of earnings and one–half of earnings over $65 received in a month;
  • the value of Supplemental Nutrition Assistance Program (food stamps) received;
  • income tax refunds;
  • home energy assistance;
  • assistance based on need funded by a State or local government, or an Indian tribe;
  • small amounts of income received irregularly or infrequently;
  • interest or dividends earned on countable resources or resources excluded under other Federal laws;
  • grants, scholarships, fellowships or gifts used for tuition and educational expenses;
  • food or shelter based on need provided by nonprofit agencies;
  • loans to you (cash or in–kind) that you have to repay;
  • money someone else spends to pay your expenses for items other than food or shelter (for example, someone pays your telephone or medical bills);
  • income set aside under a Plan to Achieve Self–Support (PASS). See the SSI Spotlight on Plan to Achieve Self–Support;
  • earnings up to $1,780 per month to a maximum of $7,180 per year (effective January 2015) for a student under age 22. See the SSI Spotlight on Student Earned Income Exclusion;
  • the cost of impairment–related work expenses for items or services that a disabled person needs in order to work. See the SSI Spotlight on Impairment–Related Work Expenses;
  • the cost of work expenses that a blind person incurs in order to work. See the SSI Spotlight on Special SSI Rule for Blind People Who Work;
  • disaster assistance;
  • the first $2,000 of compensation received per calendar year for participating in certain clinical trials;
  • refundable Federal and advanced tax credits received on or after January 1, 2010; and
  • certain exclusions on Indian trust fund payments paid to American Indians who are members of a federally recognized tribe

Still confused?  Please call The Probate Pro (248) 399-3300 for help.