October 15, 2014

What’s the difference between Supplemental Security Income (SSI) and Social Security Disability Income (SSDI)?

SSI is a needs-based program which provides a monthly income. In order to be eligible, the individual’s resources and income cannot exceed certain limits. The resource limit is $2,000. The person’s income limitation is dependent on a formula which is based on the type of income–earned, unearned, and in-kind support.

Most disabled children are not eligible for SSI until age 18 because Social Security counts the parent’s income until age 18. After that, the parent’s income is not counted in determining eligibility.

In New York State, if an individual is deemed eligible for SSI, he or she will also receive Medicaid. This will entitle the person to certain medical and prescription benefits, as well as make the individual eligible for adult Medicaid services such as housing, respite, day programs, etc.

SSDI is not a needs-based program. If an individual retires, dies, or becomes disabled, he (and his family) is entitled to SSDI benefits based on the individual’s work history. A disabled individual who has been deemed eligible is entitled to benefits for her lifetime as long as she remains disabled. Dependent family members are also entitled to benefits, up to the Family Maximum Benefit.

There are advantages to a disabled individual having SSI prior to receiving SSDI. One of these advantages is that there will be no spend-down requirement in the event the SSDI benefits exceed the SSI benefits. (SSDI is considered unearned income by the Social Security Administration and is subtracted dollar-for-dollar from the SSI benefit after certain allowances.) Having SSI benefits in place first avoids the cost and inconvenience of creating and administering a first-party Supplemental Needs Trust that would most likely be needed to avoid the spend-down.

Supplemental Needs Trusts and spend-downs will be addressed in another blog.