SSI vs. SSDI: What's the Difference?

  • November 23rd, 2022

Mother walks outdoors with daughter who has Down syndrome.Parents of children with special needs are often daunted by the different government programs that fall under the general definition of "disability benefits." To make matters worse, two of the most common benefit programs available also have very similar abbreviated names — SSI (Supplemental Security Income) and (SSDI) Social Security Disability Insurance.

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."

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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. However, in order to receive SSDI benefits, a worker generally must have worked and paid into the Social Security system for at least 10 years prior to her disability. The rules are different if the individual can prove that she became disabled at or before the age of 22, in which case her benefits will be based on her parents' work records.

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 2022, the maximum federal benefit for an individual is $841 a month, although 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 beneficiary may receive. This means that once an SSI beneficiary's income reaches a certain level, his SSI benefit will come to an end.

An SSDI benefit, on the other hand, is based on the beneficiary's previous income, their family size, and 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 beneficiary's other income.

Health Care Coverage

SSI as well as SSDI recipients may receive government-funded health care based on their disability.

SSI beneficiaries automatically get health care coverage through the Medicaid system immediately upon qualifying for SSI. In general, Medicaid covers all of the beneficiary'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, SSDI beneficiaries must wait two years from the date they became eligible for SSDI before they will begin to be covered by Medicare. Those SSDI beneficiaries whose incomes are below the SSI benefit amount can also qualify for SSI and receive both Medicare and Medicaid health coverage.

Take Note, Parents

Finally, while a parent's income and assets will affect the eligibility for SSI of a child under age 18, upon reaching 18 years of age an individual with special needs may qualify for SSI based on his own resources and income without regard to those of his parents, even if he's still living with them.

Also, not all parents are aware that if they become disabled, their nondisabled children under the age of 18 may be able to receive SSDI benefits based on the 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, a beneficiary 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. (Although the criteria are far too detailed to be described here, generally speaking, a disabled recipient must earn less than $1,350 a month, in 2022, from work.) It is vital to understand 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.

Last Modified: 11/23/2022
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