Social Security Disability Insurance and SSI – What’s the Difference?
What is the difference between Social Security Disability (SSDI) and Supplemental Security Income (SSI)? This is a question I hear time and time again from clients. There is one main difference between SSI and Social Security Disability. SSDI is available only to workers who have a enough work credits. While SSI is available to low-income individuals who have never worked, or who have worked, but do not have enough credits to qualify for SSDI.
Financial and work credit criteria differ for each program. But both programs are overseen and managed by the Social Security Administration. Both programs also define “disability” the same way.
Social Security Disability Requirements
Social Security Disability is funded through payroll taxes. SSDI recipients make contributions to the Social Security trust fund through their taxes. To be eligible for SSDI, you must be younger than 65 and have earned enough work credits to qualify.
What is a work credit?
According to the Social Security Administration
“We base Social Security credits on the amount of your earnings. We use your earnings and work history to determine your eligibility for retirement or disability benefits or your family’s eligibility for survivors benefits when you die. In 2016, you receive one credit for each $1,260 of earnings, up to the maximum of four credits per year. Each year the amount of earnings needed for credits goes up slightly as average earnings levels increase. The credits you earn remain on your Social Security record even if you change jobs or have no earnings for a while.”
From “How You Earn Credits” brochure form the Social Security Administration.
Self employed, military and certain other jobs have different requirements. See the brochure referenced above for all the details.
There is a five month waiting period for SSDI benefits. This means that the Social Security Administration will not pay you benefits for the first five months of your disability. Once the waiting period is over, the monthly benefit you receive will depend on your prior earnings record.
After receiving SSDI for two years, a disabled person will become eligible to receive Medicare, regardless of their age.
On the other hand, SSI is need-based. This means that to receive SSI benefits, you must have less than $2,000 in assets for an individual, and less than $3,000 in assets for a couple. This is a very limited income.
Qualifying for SSI benefits can open the door to other government benefits. Disabled people who are eligible under the SSI income requirements can also be eligible to receive Medicaid from their state. Most people who receive SSI benefits will also qualify for food stamps, depending on the amount of monthly income they have.
SSI benefits do not have the same waiting period as SSDI benefits. SSI benefits will begin on the first of the month when you first submit your application.