There is a lot of confusion about SSDI and SSI, the two types of disability benefits that can be received from Social Security. The definition of disability is the same under both programs, but that is where the similarity ends. The following is a very basic description of the disability programs provided under the Social Security Act, titles II and XVI.
Social Security Disability Insurance
Security Disability Insurance (SSDI) is a benefit that is available to workers and certain family members if he or she has worked long enough and paid Social Security taxes (via wages or self- employment taxes).
Is financial need considered in entitlement to SSDI?
No. There is no means test. Assets, financial worth and unearned income have no bearing on entitlement.
What is the benefit rate for a disabled worker?
A disabled worker will draw a benefit amount approximately equal to the amount he or she would draw at normal retirement age. When the individual reaches normal retirement age, the benefit is converted over to retirement benefits.
What are the other benefits that go along with SSDI?
A worker who is approved for SSDI also gets a “period of disability” meaning the work record is frozen for the duration of the disability. Years of no earnings due to disability are not counted in the averaging formula used to calculate the monthly benefit amount. Everyone is focused on the disability income. Few know the benefits of having the years of “zero” earnings excluded from their benefit calculations and the determination of work credits for benefit entitlement.
What about medical insurance?
A disabled worker is entitled to Medicare. However, there is a waiting period. Medicare coverage begins after the worker has been entitled to disability benefits for 24 consecutive months. Medicare covers only the disabled worker and does not extend to family members.
What about benefits for the worker’s family?
Dependent minor children and a spouse caring for those children may be entitled to monthly benefits. These benefits are subject to a “family maximum” which is derived from the worker’s benefit rate and earnings record.
Can family members draw a disability benefit from the worker’s record?
A widow(er) or divorced widow(er) may be entitled to an early survivor benefit off the earnings record of a deceased worker if he or she is disabled, is between the age of 50 and 60, is unmarried and meets certain other non-disability requirements.
A child of the wage earner may be entitled to a disability benefit if the child is unmarried, is under a disability that began before age 22 and is dependent on the wage earner. This benefit can be paid during the life of the worker if he or she is receiving disability or retirement income. It is available to a surviving disabled adult child after the worker’s death.
Supplemental Security Income
Supplemental Security Income (SSI) is a disability benefit that can be received by an adult or child under age 18 who is disabled and has limited income and resources.
Financial need is a key criteria.
Applications are screened for financial qualifications before the application proceeds to a disability evaluation. In adult claims, excluded resources include the claimant’s home, one automobile and up to $2,000 in countable resources. Income and “in kind” income such as food and shelter can reduce the SSI benefit to which the claimant is otherwise eligible.
Benefit rates are the same for all claimants and are set by statute and regulations.
The maximum rate for SSI can be reduced by earned income, unearned income and “in kind” income such as food and shelter.
There are no family benefits.
Only the disabled individual can receive a monthly benefit.
Medicaid provides medical coverage.
An individual receives Medicaid coverage for any month in which they are eligible for SSI disability.
SSI is available to disabled children.
Children may be eligible for SSI if they meet a separate (very strict) test for disability that is based very heavily on medical criteria.
The financial eligibility is determined by family composition, household income, and assets and resources of the child and parents.
*Special needs trusts can be established to create eligibility for a disabled child or adult where assets otherwise would prevent eligibility.
For Additional Information
The Social Security Act is very complex and there are many exceptions to almost every rule. Social Security has a very helpful website with a wealth of general information and downloadable PDFs on a multitude of subjects. The website also publishes a toll free number for those who wish to speak with a live representative. I am personally aware that the wait times to get a live person on the phone can be very long and that the quality and accuracy of the information varies from one representative to another.
Please feel free to contact me for additional information or clarification. I can be reached via my website or via email to [email protected]
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