Parents of children with special needs are often daunted by the different government programs that fall under “disability benefits.” Two of the most common benefit programs also have very similar names and acronyms. These are Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
However, these two important programs offer very different benefits and have different rules for determining who qualifies for them. Here’s an overview of the key differences between the two programs.
Needs-Based vs Entitlement
The major distinction between SSI and SSDI is that SSI is a “needs-based program” and SSDI is an “entitlement program.”
SSI is a monthly stipend provided to elderly, blind, or disabled persons based on financial need. It is only available to disabled individuals who have very limited income and assets.
SSDI, on the other hand, has no income or asset limits. To qualify for SSDI benefits, a worker generally must have fulfilled two requirements:
- They must have worked in the Social Security system for a minimum of 10 years before their disability.
- They also must have paid into the Social Security system during that time.
The rules are different if the individual can prove that they became disabled at or before the age of 22. If this is the case, their benefits will be based on their parents’ work records.
SSI vs SSDI: Differences in Benefits
Another main difference between the two programs is the size of the benefit received and the way that benefit is calculated.
The SSI benefit is a fixed amount. For 2023, the maximum federal benefit for an individual is $914 a month. Not that this differs somewhat from state to state based on the state’s contribution.
The benefit is reduced dollar for dollar for any other income the disabled individual may receive. This means that once their income reaches a certain level, their SSI benefit will come to an end.
An SSDI benefit, on the other hand, is based on the following:
- The previous income of the disabled individual
- The size of their family
- The amount they (or their parents) paid into the Social Security system before becoming disabled
Unlike SSI, an SSDI benefit is not affected by the recipient’s other income.
Health Care Coverage
SSI as well as SSDI recipients may receive government-funded health care based on their disability.
Those who receive SSI automatically get health care coverage through the Medicaid system immediately upon qualifying for SSI. In general, Medicaid covers all of the SSI recipient’s health care requirements.
SSDI recipients obtain health care through the Medicare program, which does not offer the same range of services as Medicaid. Furthermore, they must wait two years from the date they became eligible for SSDI before they will be covered by Medicare. Note that if you receive SSDI and your income is below the SSI benefit amount, you may also qualify for:
- Medicare health coverage
- Medicaid health coverage
Take Note, Parents
A parent’s income and assets will affect whether their child under age 18 is eligible for SSI. Disabled individuals may qualify for SSI based on his own resources and income upon turning 18, regardless of their parents’ resources. This is the case even if the individual receiving SSI is still living with their parents.
Children of a disabled parent may be able to receive Social Security Disability Insurance (SSDI) benefits. This is based on their parent’s work record. Adults with disabilities may also begin to receive SSDI payments when their parents retire and begin to collect Social Security. Thus, an individual who has been receiving SSI benefits may later become eligible for SSDI instead.
Similarities Between SSI and SSDI
In addition to both being administered by the Social Security Administration, SSI and SSDI have one other important similarity between them. Both programs use the same evaluation to determine whether an individual is disabled in the first place.
This evaluation focuses on whether an individual is capable of being gainfully employed. Generally speaking, a disabled recipient must earn less than $1,470 a month, in 2023, from work.) Note that unless an individual meets the test for disability, they will not qualify for SSI or SSDI benefits for themselves.
Be sure to connect with a special needs planner near you to learn more.