SSI and WHO IT IS FOR

You may hear the Social Security disability program called "SSI."  However, SSI is not the same as Social Security disability (SSDI).

SSI stands for "Supplemental Security Income," a welfare-like program for claimants who have little financial resources.

SSDI - is "Social Security Disability Insurance," earned by working and paying into the trust fund over a period of years.

The major differences include:

1.  Work Credits.  You are not required to have worked and paid any FICA tax to be covered for SSI but this isn't true for SSDI.  SSDI requires the claimant to have worked a certain amount and paid into the trust fund to be "insured."

2.  Means Testing.  SSDI is not means tested.  A claimant doe not need to have few financial resources or restricted income to qualify for SSDI.  However, SSI is for persons with very limited household income and few financial resources.

3.  Very Different Benefit Amounts.  The maximum federal benefit for SSI is currently $750 per month.  Many claimants get less, but $750 is the most you can get.  However, SSDI may pay a maximum of $2,788 per month.  The actual amount is based on your average wages.

4.  Comes with Different Health Insurance.  SSDI benefits come with Medicare insurance but SSI benefits come with Medicaid.

TWO CASE STUDIES

Alice worked for 15 years and paid FICA tax to Social Security with each paycheck through payroll deduction, which is mandatory.  She has earned enough quarters of coverage at work to be covered by SSDI under Title II of the Social Security Act.  Alice became disabled and applied for SSDI benefits.  She has substantial savings and also owns investment property worth more than $100,000.  She was awarded SSDI benefits and receives a monthly payment of $2,145 per month.

Zachary once worked but stopped working in 2011. He lives alone.  Zachary inherited some money and property when his parents died.  The property is worth $50,000, not including the house he lives in.  He has about $3,000 in a savings account at the bank. In 2019, he became disabled and files for SSDI.  He is told that he doesn't have sufficient work credits to be covered by SSDI.  Zachary protests that he worked for many years and paid FICA tax up until 2011.  However, that was not recent enough and his SSDI coverage had expired on 12/31/16.  Zachary then files an SSI claim because it requires no work credits.  However, his SSI claim is denied because Zachary has too many financial resources.  He is disqualified because of the property he owns and the $3,500 in savings.  He is told that SSI is like Welfare; it is only intended for persons with very restricted income and resources.  In fact, an individual is qualified for SSI only if he/she has less than $2,000 in countable resources.

So, Alice had a great deal of financial resources and even some income from her investment property but was still able to receive $2,145 per month in SSDI benefits from Social Security.  The rationale is that Alice paid into the system recently enough to have SSDI insurance coverage and there are no income/resource restrictions on SSDI.  However, Zachary has not worked recently enough to have SSDI insurance coverage (expired 12/31/15).  And he has too many resources to qualify for SSI.

These two case studies illustrate the fundamental differences between SSDI (Title 2) and SSI (Title 16). 

Both SSI and SSDI are administered by the Social Security Administration and both get called "Social Security disability."  But this is not true, as you have seen.  They are very, very different programs.

So, which program should you apply for if you become disabled?  The answer is SSDI (Title 2) if you can qualify.  It will probably pay a higher benefit and has no requirement that you be poor or have limited resources.  However, if you don't have the required work credits, you should check on SSI.  Sometimes, SSI is available when SSDI is not.
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