SSI and SSDI: Confusing Initials
I agree. It really is confusing. Why the government used the initials SSI and SSDI as shorthand for two of the most important government benefits is bewildering. With 26 letters in our alphabet, there were many opportunities to avoid this confusion.
SSI and SSDI are two government benefits with similar names but offering quite different benefits to the recipients.
SSI and SSDI: Defined
Supplemental Security Income, better known by the initials “SSI” is a federal government benefit program available to low-income individuals who are disabled, blind, or elderly and have limited income and few assets. SSI eligibility rules form the basis for most other government program rules.
Social Security Disability Insurance, better known by the initials “SSDI” or “SSD” is a federal government benefit program available to individuals with a disability who either have sufficient work history proper to becoming disabled or are entitled to receive benefits by virtue of being a dependent or survivor of a disabled, retired, or deceased insured worker. There is no “means” test which means that eligibility is not based on limited income or assets. If you qualify for SSDI you may also be eligible to qualify for SSI and/or Medicaid benefits.
SSI and SSDI: Eligibility Rules
As previously explained, the primary program with financial eligibility restrictions is SSI, the Supplemental Security Income program. Since many other programs use the SSI eligibility rules, the SSI rules are important to understand.
SSI eligibility requires limited income and assets. SSI rules have a simple way of differentiating between income and assets. Money that is received in a specific month is counted as income in that month. Any portion of income that remains on the first day of the following month is counted as an asset.
An SSI recipient is permitted to receive a small amount of income without reducing the SSI benefits. The rules related to what is a countable income is quite complicated and will not be addressed here. However, the limitation on assets for SSI eligibility is easier to understand. A single person must have no more than $2,000 in available resources in order to qualify for SSI. Some types of assets are not counted. These non-countable assets include the beneficiary’s home, one automobile, household furnishings, pre-paid burial, tools of the beneficiary’s trade, and a handful of other less important items. Each of these non-countable assets are subject to special rules and exceptions.
In the event that a SSI eligible recipient is to receive an inheritance or settlement of a lawsuit that would otherwise disqualify the SSI eligible recipient, it may be necessary to create a Supplemental Needs Trust (often called a Special Needs Trust or simply an SNT). The essential purpose of a Supplemental Needs Trust is to improve the quality of an individual’s life without disqualifying from eligibility for public benefits. Since the benefits are quite valuable and the failure to follow the rules can result in liability, it is advised to seek a qualified attorney to provide competent legal advice.
SSI and SSDI: The Probate Pro to the Rescue
The estate planning team at The Probate Pro is happy to provide clarity on the differences between SSI and SSDI.