Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI or SSD) are both programs that are administered by the Social Security Administration (SSA).
They were created to provide cash benefits to disabled individuals. Although some eligibility requirements are different, the definition of ‘disability’ is exactly the same under both programs.
The ‘disability’ determination is actually made for both SSD and SSI claims at the same time and by the same Administrative Law Judge (ALJ).
Because of these similarities, the programs are routinely confused. All that being said, the two are totally different programs and they have some distinct differences that any disability applicant needs to be aware of.
|Financial Eligibility||Work Credits Required||Needs Based Program|
|Benefit Amount||Based on Lifetime Contributions||Based on Need|
|Back Pay||Up to 12 Months Prior to Filing||Only to Date Application Filed|
|Wait Period||5 months wait period||None|
|Medical Insurance||Generally, the federal health insurance program for people 65 and older or those that have been found disabled by Social Security for 24 months or longer. More||A joint federal and state program that helps with medical costs for people with low incomes and limited resources. Medicaid programs vary from state to state. For more information, see Medicaid.gov More|
|Funded by||Payroll Taxes||General Funds|
Differences Between SSI and SSD
All that being said, the two are totally different programs and they have some distinct differences that any disability applicant needs to be aware of.
SSD Generally, to be insured under the SSD program, an individual needs to accumulate 40 work credits over their lifetime, 20 of which were accumulated over the last 5 years.
In order to earn a work credit, you need to contribute to the social security fund via payroll or self-employment taxes. An individual can only accumulate 4 credits in a calendar year. In 2021, you need to have earnings of $1,470 to earn one work credit. Thus, in order to get the maximum of 4 work credits in a year, you need to earn $5,880.
Younger individuals, who as a result of lack of years in the workforce, do not have to accumulate the full 40 work credits to be insured under the system. The closer an individual is to 18 years of age, the less credits they need to accumulate.
SSI is a needs-based program. Whether or not an individual has worked is not relevant to eligibility for SSI benefits. I routinely tell people that if they are eligible for food stamps, they are likely to be eligible for SSI benefits.
The rules state that you cannot have more than $2,000 in assets to be eligible for SSI benefits.
2. Medical Eligibility
The definition of ‘disability’ is the same for both SSI and SSD.
To meet SSA’s definition of disability, you must not be able to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment(s) that is expected to result in death or has lasted or is expected to last for a continuous period of at least 12 months.
The determination as to whether or not someone meets that definition is made by the same employee of the SSA whether the claim is for SSD or SSI benefits.
Often one individual will decide a claim by the same person for benefits under both programs simultaneously.
3. Administered by
The SSA administers both the SSD and SSI programs.
4. Benefit Amount
SSD The maximum benefit an SSD recipient can receive is $3,148, while the average is a much lower $1,259. The amount of a recipient’s benefit is directly tied to a claimant’s total lifetime Social Security contribution. If you have typically earned the full amount subject to payroll tax ($142,800 for 2021) year after year then you are likely to receive the full amount.
If you barely obtain your 4 work credits per year, then the benefit you will receive is going to be much lower. As long as a beneficiary is not engaging in SGA, the claimant’s SSD benefit will only be changed due to annual cost of living adjustments. Spousal income, inheritances, pensions...etc will not have any impact on an SSD benefit.
SSI SSI benefits are figured differently than SSD benefits. Individual benefits start at $794 while families receive $1,191.
This initial amount is then reduced by things like personal income, assets, household income, gifts of food or housing, pensions, unemployment, SSD benefits…etc. SSI was implemented for those with a financial need so the more income or assets a person has coming in, the less that financial need is, thus the benefit is reduced accordingly.
As you just read, a claimant’s SSI benefit is reduced by the amount of an SSD benefit. Individuals can and often do get both SSD and SSI.
This occurs if the SSD benefit is less than whatever that individual’s SSI benefit would have been absent the SSD award. The SSI benefit is essentially icing on the top of the SSD benefit and is used to make up the difference between financial need and the SSD benefit.
5. Back Pay
SSD An individual can get up to 12 months of back pay prior to the date that they filed their application. It often takes up to two years to get disability benefits.
As a result, back pay could be up to three years after you combine the 12 months prior to the filing date and the time it takes from filing date to decision date.
SSI Benefits do not go back further than the day an applicant filed their disability application so technically you do not get back pay for SSI benefits, but as mentioned above it can take up to two years to be approved.
One could argue that SSI ‘back pay’ is due from the day you filed through the day you win your disability claim.
6. Wait Period
SSD There is a 5-month waiting period before you can get SSD benefits. In combination with the limit on 12 months of back pay, technically the furthest back that someone would want to be found disabled is 17 months.
Taking off the 5-month waiting period would allow an individual to get the maximum of 12 months of back pay. Conversely, if you were found disabled say 10 months ago, you would only get 5 months of pack pay after eliminating the 5-month waiting period.
SSI There is no wait period for SSI benefits.
7. Medical Insurance
SSD SSD recipients are eligible for Medicare 2 years after the date of their disability.
SSI Whether or not an SSI recipient gets Medicaid is dependent upon the state in which the beneficiary resides. In most states, SSI recipients automatically qualify for Medicaid and do not have to take any additional steps to get it.
In other states, being on SSI guarantees a recipient Medicaid, but you have to sign up for it. In still others, SSI does not guarantee Medicaid eligibility, but most people who get SSI will get Medicaid. In the states where beneficiaries do not automatically get Medicaid, the SSA will point the SSI recipient in the right direction to help them obtain it.
8. Funded by
SSD SSD benefits are funded by payroll taxes and come out of the social security administrations funds.
SSI SSI benefits are paid out of the general tax fund.