If you're like a lot of people across the nation, then at some point in your adult life -- or perhaps even before then -- you have heard someone mention Social Security Disability Insurance and Supplemental Security Income. Because both federal programs provide cash assistance to people with disabilities, some people have mistakenly assumed that these programs are one and the same, believing that they are just two different names for the same program.
But as our more frequent readers know, although these two programs do provide benefits to people with disabilities, the programs are different from one another. In this week's blog post, we'd like to highlight their differences, thereby answering the question above: is there a difference between SSI and SSDI?
Employment history. This is one of the requirements for SSDI that is not found in the SSI program. To be eligible for SSDI, a person must have made a certain amount of FICA contributions throughout their work history. For people applying for SSI, there is no work history requirement, meaning children are eligible for these benefits.
Source of payments. Although SSI is funded by general tax revenues, just like the general Social Security retirement fund, SSDI is funded by a trust fund, which is then funded by a "fixed proportion […] of the taxes received under the Federal Insurance Contribution Act and the Self-Employment Contributions Act."
Payment amounts. Because SSDI requires a work history, monthly payments are calculated by looking at a "worker's lifetime average earnings covered by Social Security." It's important to note that the amount can be affected if you are receiving other disability benefits, such as those received by workers' compensation.
SSI payments on the other hand are based on the Federal Benefit Rate, which is adjusted from year to year depending on changes to the cost of living. There are deductions for SSI as well that can affect the amount you receive.
Health insurance. Although SSI and SSDI both provide health insurance coverage to beneficiaries, SSI uses Medicaid while SSDI uses Medicare.
State supplemental payments. Although recipients of SSDI do not receive any additional payments through the state for their disability, the same is not true for people who collect SSI. In some states, such as here in New Jersey, an additional supplement is added by the state government to federal payments, increasing the amount received.
Sources: The Social Security Administration, "2014 Red Book," Accessed Jan. 22, 2015
The Social Security Administration, "Disability Insurance Trust Fund," Accessed Jan. 22, 2015
The Social Security Administration, "Supplemental Security Income (SSI) In New Jersey," Accessed Jan. 22, 2015