Social Security Disability (SSDI) and Supplemental Security Income (SSI) seem very similar on the surface, but they are actually quite different. They function like two sides of the same coin, helping those who need help most in the areas where they are most vulnerable. If you are considering applying for SSI or SSDI benefits, make sure to read this article so you know which program or programs you should apply for. Applying for the correct program or programs makes sure you will get all the benefits you are eligible for.
What is Social Security Disability (SSDI)?
Social Security Disability Insurance is funded via payroll taxes, and as the name suggests, it’s considered a form of insurance. This insurance is automatically earned by people who have worked for five of the ten years preceding disability, and by so doing, have contributed to the national Social Security trust fund. Aside from the work requirement, to qualify for SSDI disability benefits, candidates must be between 18 years old and full retirement age. Once an insured person reaches full-retirement age they become eligible for retirement benefits instead of disability benefits.
The Social Security Administration does not pay SSDI benefits for the first five months after a person becomes disabled, which is why it’s very important to apply as soon as it becomes clear that the benefits will be needed. Those who reach retirement age while on SSDI will have their disability benefits converted to retirement benefits.
Spouses and children of people who receive SSDI benefits may be able to receive dependent benefits (auxiliary benefits) while they are still in high school or under the age of 18 for children or while they are caring for a child under the age of 16 for spouses. After receiving SSDI for two years, beneficiaries become eligible for coverage under Medicare.
What is Supplemental Security Income (SSI)?
Supplemental Security Income is a need-based program that is funded by general fund taxes. To qualify for SSI, candidates must have less than $2,000 in assets for individuals or $3,000 for couples. Their income must also be very limited.
SSI benefits begin on the first of the month when after the month application was first submitted. These benefits come in the form of monthly cash payments. People who receive SSI benefits are also eligible for Medicaid, food stamps, and often times housing assistance or other similar programs.
What’s the Difference?
Aside from the differences in definition outlined above, SSI and SSDI have several distinctions.
Approval Rates
Approval rates for SSDI are generally higher than they are for SSI. This is likely because judges and claims examiners tend to give more credibility to applicants with a long work history, and because SSDI applicants have higher incomes and insurance coverage which allows them to see a doctor on a regular basis.
Taxes
The majority of SSDI and SSI benefits are not taxable, but SSI is less likely to be taxed than SSDI due to differences in average income. If total income is less than $25,000 for an individual or $32,000 for a married couple filing jointly, then benefits are not subject to income tax. Total income above that threshold becomes subject to tax. If a married couple filing jointly receives SSDI benefits as well as another source of income, taxation is more likely.
Qualifications
SSI is for people who haven’t worked five out of the last ten years and have limited income and resources. SSI can apply to citizens and nationals of the United States, as well as aliens who meet certain requirements, and the recipient must live in the U.S. or Northern Mariana Islands unless they are living abroad for education or military reasons. Marital status also affects eligibility for SSI because a spouses income and resources can be deemed family resources. People who are older than full retirement age can qualify for SSI if they meet the income and resource limits regardless of whether they meet the disability requirements. Otherwise, the test for disability with SSI and SSDI is the same.
Means Testing
Means testing looks at the annual income of Social Security beneficiaries and uses that data to determine what kind of benefit check they should receive, if at all. The theory behind means testing is that it should help ensure that benefits are going to people who really need them, which is how the program was originally designed in the mid-1930s. This will help save the program money in the long run, delaying asset reserve depletion.
The SSI program is means-tested. The SSDI program is not means-tested, but beneficiaries are subject to losing eligibility if their work-related income rises over a certain threshold called substantial gainful activity.
Can I Apply for Both SSDI and SSI?
Yes. It is possible for you to qualify for both. As long as your SSDI monthly benefit is lower than the maximum payment for SSI then you can get both types of benefits. This means you can also qualify for both Medicare and Medicaid too. If you have worked five of the 10 years prior to your disability but your work was minimal you should consider applying for both types of disability.
Knowing whether you qualify for SSI or SSDI or both makes you more likely get all the benefits you may be entitled to. If you are trying to decide what type of benefit to apply for, it also helps to get advice and assistance from a disability lawyer or disability attorney throughout the process. Barnes Disability has an experienced team of professionals that can assist you through every part of the disability process, so contact us today for a free consultation.