What’s the Difference Between SSI and SSDI Law?

 

The chief difference between Social Security Disability (SSD, or SSDI) and Supplemental Security Income (SSI) is the fact that SSD is for workers who have accumulated a sufficient number of work credits, while SSI disability benefits are for low-income individuals who have either never worked or who haven’t earned enough work credits to qualify for SSD.

Though many people don’t or can’t tell the difference between SSI (Supplemental Security Income) and SSDI (Social Security Disability Insurance), they are two completely different governmental programs. While both programs are overseen and managed by the Social Security Administration, and medical eligibility is determined in the same manner for both programs, there are very different aspects between the two.

What Is SSI?If I Move to a Different State Will I Lose My Disability Benefits?

Supplemental Security Income is a program that is stringently need-based, according to income and assets. SSI is funded by general fund taxes. SSI is called a “means-tested program,” which means it has nothing to do with work history, but only with financial need. To meet the SSI income requirements, you must have less than $2,000 in assets (or $3,000 for a couple) and a severly limited income.

Disabled people who are eligible under the income requirements for SSI are also able to receive Medicaid in the state they live in. Many who qualify for SSI will also qualify for food stamps, and the amount an eligible person will receive depends on where they live and the amount of regular, monthly income they have. SSI benefits will begin on the first of the month when you first submit your application.

What Is SSDI?

Social Security Disability Insurance is funded through payroll taxes. SSDI recipients are considered “insured” because they have worked for a certain number of years and have made contributions to the Social Security trust fund in the form of FICA Social Security taxes. SSDI candidates must be younger than 65 and have earned a certain number of “work credits. If a disabled person has received SSDI for two years, they are then eligible for Medicaid.

Under SSDI, the spouse and children dependents of the disabled are eligible to receive partial dependent benefits. These are called auxiliary benefits. Although, only adults over the age of 18 can receive the SSDI disability benefit.

There is a five-month waiting period for benefits. This means that the SSA won’t pay you benefits for the first five months after you become disabled. The amount of the monthly benefit once the waiting period ends depends on your earnings record, a lot like the Social Security retirement benefit.

Do you need help navigating it all? Contact us today.

 

ABLE Act of 2014

ABLE Act of 2014

The ABLE Act (The Achieving a Better Life Experience) Act was introduced in the 113th Congress by a bi-partisan, bicameral set of Congressional Champions. These champions include Senators, Robert Casey Jr. and Richard Burr and Representatives Ander Crenshaw, Chris Van Hollen, Cathy McMorris Rodgers and Pete Sessions. Support has been growing for this Act, which may become law this year.ABLE Act of 2014

Under ABLE, individuals receiving Supplemental Security Income (SSI) and Medicaid could establish tax favored accounts to cover qualified expenses for medical care, housing, schooling and transportation. This would be done by amending Section 529 of the Internal Revenue Service Code of 1986 to create these accounts for individuals with disabilities. This bill would supplement but not supplant, benefits provided through private insurances , the Medicaid program, the SSI program, the beneficiary’s employment and other sources.

The ABLE Act provides individuals with disabilities the same types of flexible savings tools that all other Americans have access to through college savings accounts, individual retirement accounts and the like. This is overall , a good thing.

There is controversy, however, because as it stands, ABLE is really a bill to help the disabled family members/children of middle class and wealthy individuals. These individuals can use ABLE accounts to transfer funds to their disabled family members. Most people on SSI and Medicaid rarely have the ability to accumulate assets on their own in an ABLE account. ABLE could help middle class and wealthy families at the expense of people who apply for SSI in general due to its proposed “pay-fors” that would:

  • -Eliminate the percentage and dollar cap on the user fee that those representing Social Security claimants pay for processing direct payment of fees for representing Social Security claimants.
  • -End the Single Decisionmaker pilot currently used in twenty states.
  • -End the Reconsideration elimination pilot currently used in ten states.

Ending the single decisionmakeer and reconsideration elimination pilots, would make it more difficult to be approved for disability benefits in states affected by ABLE. Some suggest that the pilots be extended to all states and ABLE be part of a comprehensive effort to update the income and resource provisions of SSI and Medicaid. SSI’s provisions have not been updated since SSI came into existence about 40 years ago.

Additionally, eliminating the percentage and dollar caps on the user fee would reduce the net income of those who represent Social Security Claimants which is already a high overhead, low profit margin business. Social Security Representation could become a thing of the past.

Want to learn more about SSI? Check out:

The Appealing Process of Disability

Five Things Social Security Won’t Tell You

Five Things Social Security Won’t Tell You

Five Things Social Security Won't Tell You

POTENTIAL BENEFIT CUT: In recent years, the number of people collecting disability benefits has really spiked. Some of the change can be attributed to more women entering the workforce over the past several decades, and as baby boomers age, more of them are qualifying for and collecting disability, as well psychiatric disorders increasing over recent years. Additionally, the slow economy caused some workers to lose their jobs or find that there were fewer they qualified for due to their disability so they applied for disability benefits.Five Things Social Security Won't Tell You

All of these factors are draining the Social Security Trust Fund faster than expected and it could be depleted by 2016. If this happens and congress doesn't act, those receiving benefits could be facing a 20% cut.

SOCIAL SECURITY USED TO BE A BETTER DEAL: Employees today pay more in Social Security taxes than previous generations did. Additionally, when it's their turn to retire, they're also more likely to receive smaller benefits relative to the taxes they paid in. As the number of eligible beneficiaries grows and the funds deplete, taxes are raised and will probably continue to be raised.

In 1965, workers paid 3.6%. They now pay 6.2%. For example: an individual who retired at the age of 65 in 1980 and made $44,600 would have paid $98,000 in Social Security taxes and received $207,000 in benefits. Now, an individual retiring in 2030 making about the same money will pay $404,000 in Social Security taxes and only receive $339,000 in benefits.

IF YOU WANT MORE BENEFITS, KEEP WORKING: Those approaching retirement age have been doing the math. How much do they get if they wait to take payments? To get the biggest bump in benefits, you have to wait beyond full retirement age. For every additional year you wait, you get an increase in benefits of up to 8% until age 70. You can visit the Social Security Website to calculate your date and yearly rate of increase.

IT'S POSSIBLE TO COLLECT UNEMPLOYEMENT AND SOCIAL SECURITY: According to the National Employment Law Project who advocates for seniors to collect both, a growing number of seniors are doing so and it's perfectly legal as long as you report it to both parties.

IF YOU MAKE TOO MUCH, YOUR BENEFITS WILL BE TAXED: Many Americans think they can't be taxed on their Social Security Benefits since they come from taxes, but they'd be wrong. If you receive substantial taxable income from other sources such as dividends, self employment, investment interest and pensions, or IRA or 401k distributions, your Social Security benefits could be taxed.  The rule is if your combined income (other sources plus half of your Social Security benefits) exceeds $25,000 for an individual and $32,000 for a married couple then, you may be taxed on up to 85% of your benefits.

See also:

Social Security, Disability and Brain Injuries

How Many Work Credits Do I Need for SSDI Eligibility?