4 Types of Social Security Benefits: Do You Qualify
We will break down each type for you and how it can affect eligibility.
Retirement benefits are perhaps the most well known of the Social Security benefits. Arguably, this is not a benefit at all. Retirees who have paid into the system are merely getting that money back upon attaining retirement age.
These benefits are likely the second most popular benefit. Survivor benefits permit a widow or widower, are 60 years of age or greater, to receive a benefit when the worker that supported them has passed away.
A lesser used benefit under this category is for disabled survivors. If an individual is over the age of 50 and disabled, that widow or widower can receive benefits under their deceased spouse’s account.
Benefits under this section are generally used when the deceased spouse’s account provides a greater benefit than the disabled widow or widower’s account would.
Disability Insurance Benefits (SSDI)
In order to receive disability insurance benefits a claimant has to meet a two-prong test for (a) eligibility and (b) disability. Eligibility is met when a claimant pays into the system and ultimately accumulates enough work credits. The second prong, actually being disabled, requires an individual to satisfy SSA’s definition of disability.
The definition requires that an individual be unable to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment(s) that is either expected to result in death or has lasted or is expected to last for a continuous period of at least 12 months. In layman’s terms, you have to be unable to work because of an illness for at least a year.
There are some exceptions to the disability prong of this test for things like the grid rules. The grids are discussed in more detail here.
After satisfying that two-prong test the claimant will receive a monthly disability insurance benefit until they attain You are eligible for reduced retirement benefits from age 62 until full retirement age at 67. More, at that point they will be transitioned to a retirement benefit.
The amount that a beneficiary will receive under SSDI is similar to how retirement benefits are calculated. It is dependent upon how much the worker has paid into the system over their working life. We have created a handy calculator to help estimate what your specific benefit could be.
Supplemental Security Income
SSI is a needs-based program. It is not funded by the Social Security System, but rather from the general tax fund. SSI benefits are provided to individuals whose resources and income fall below certain limits. “Financial need” is the first prong of the two-prong test.
The second prong can be divided into two categories. The first is for disabled individuals. The definition of disability under the SSI program is the same as it is under the SSDI program.
The individual must be unable to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment(s) that is either expected to result in death or has lasted or is expected to last for a continuous period of at least 12 months.
The second category is for individuals who are receiving a retirement benefit but still have that financial need despite receiving the retirement benefit. This usually happens to individuals who have paid very little into the system, which results in a very low retirement benefit.
The SSI benefit becomes ‘icing on the top’, of the retirement benefit. In theory, the two benefits combine result in a total benefit that is enough to lift the beneficiary out of poverty.
How Does Receiving One Social Security Benefit Impact Eligibility for the Others?
In short, the only benefit that you can receive at the same time as another SS benefit is SSI.
In terms of the retirement benefits; Normal Retirement Benefit and Survivors Benefits, the beneficiary should pick the one that provides the larger monthly monetary benefit. You are not able to receive both at the same time.
In terms of the disability benefits, a beneficiary would receive either SSDI under their own account or under a deceased spouse’s account (survivor benefits) until he or she becomes eligible for normal retirement age retirement benefits.
The SSDI benefit provides a monthly monetary payment from date of disability until normal retirement age. At normal retirement age, the benefit is converted to the appropriate retirement benefit.
As mentioned above, SSI is needs based, if your disability or retirement benefit is so low that your income is below the threshold amount, then you will be eligible for the extra SSI payment in addition to your disability or retirement benefit.