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SSDI and SSI, What’s the Difference?

A lot of people get confused about the difference between SSI and SSDI, and some of our clients have spent years applying for disability without any grasp of the two programs. If you’re wondering about the difference, then this is for you.

Let’s start with how the programs are similar. SSDI and SSI both provide monthly benefits for those who are disabled, and the standards for what is a “disability” are virtually identical. Both apply a five-step analysis that grants disability if you are not working, so long as you have a severe impairment that either:

a) meets/equals the medical criteria the government set in its Listing of Impairments, or else:

b) prevents you from performing your past work and any other work in the economy.

And both programs are subject to the lengthy appeal process (initial determination, followed by a reconsideration determination, then a hearing, and finally Appeals Council review). So, if you apply for SSI and SSDI, chances are good that both applications will be jointly decided by the same Stage agency and the same judge.

SSDI – Time is Your Worst Enemy

Let’s talk about how the programs are different. SSDI, for instance, was added to the Social Security Act in 1956, and it’s best understood as a disability policy that you purchase through the federal government. While working, you (the insured) pay into the Social Security Trust fund, which is managed by the insurer (the federal government). The idea being that, if you become unable to work, you can file on your disability policy and get benefits based on what you had paid in. The amount you paid in affects how much you can draw out, and in addition to monthly benefits, you also receive Medicare—although that’s subject to a very long wait period.

Perhaps the most important component of any SSDI case is the applicant’s insurance status. Just as you couldn’t collect disability benefits on a policy you had with an employer whom you no longer work for, the same is true with SSDI. When you stop working, you stop paying into your “policy,” and sooner or later, your insurance status will expire. That’s known as the date last insured, or “DLI.” For individuals 31 and older, the DLI expires when they no longer have 20 work credits out of the past 40 work credits (the 20/40 rule). And when that happens, it doesn’t matter how disabled you are—if the disability arose after the DLI, you get nothing.

That’s one of the reasons I always encourage prospective clients to file sooner rather than later. Some of the saddest cases are when the person stops working for personal reasons unrelated to their health and then, later, contracts a terminal illness. In those instances, sometimes there is no relief available because their disability didn’t arise until after their DLI. And even if it arose before the DLI, the longer the person waits, the harder it is to prove the disability existed. Also, you can only receive SSDI benefits starting no earlier than 1 year before the application date, and even there, SSDI has a five-month wait period, so you have to be disabled for five, full months before you can even draw an benefits. With SSDI, time is your worst enemy.

SSI – Cover Your Assets

SSI, on the other hand, doesn’t have any insured requirement, and unlike SSDI, the program did not exist in its current form until 1972 (implemented in 1974). Prior to that, it was known as the “Aid to the Aged, Blind and Disabled” had been delegated to the various states. In 1974, the Nixon administration decided to shift the program to a federally administered program.

What is unique to SSI is the eligibility requirements. The program was intended to provide for the needy, and in 1974, the program set forth eligibility based on income and resources. The income restrictions are both stringent and complex, depending on marital status and whether income is classified as “earned” or “unearned.” The resources component is easier to state: you must not own assets worth more than $2000 for a single person/$3,000 for a married couple. (Note, the limit was last raised over twenty years ago; isn’t it about time for an update?).

SSI is also unique in that benefits are capped at the federal benefit rate, which isn’t much. Although the FBR is periodically adjusted based on changes in the cost of living, for 2020, the FBR is $783/month for individuals and $1,175 for couples. And while some states supplement that amount, Texas is not one of them. Remember, that’s the most you can get, and SSI will not pay benefits prior to the application date. So it’s not uncommon that a person is awarded SSI only to get little or nothing because they have other sources of income, or they waited too long to apply. However, it can sometimes still be worth it because the SSI recipient also receives Medicaid (as opposed to SSDI, which comes with Medicare). And the benefits are not subject to the 5-month wait period that applies to SSDI, so that can be helpful as well.

SSDISSI
Nature of Program:Disability insurance policy for those who pay FICA taxesSafety net for the indigent, blind, and disabled
Requirements:Must be insured and have a disability beginning before your date last insured. For most people, they must have at least 20 quarters of coverage out of the last 40 quarters.Must have limited income and resources less than $2000 (individual)/$3000 (couple)
Payout:Based on your earnings record, adjusted for cost of living increasesBased on federal benefits rate, and deducted for earned and unearned income as well as other sources of support.
Retrospective Benefits:Can go back 1 year prior to application:Benefits not payable prior to application.
Wait period:Five monthsN/A
Medical Assistance:Medicare (usually subject to a 2-year wait period)Medicaid

This only scratches the surface of all the ways SSDI and SSI are interrelated. If you have questions about whether you’re eligible for SSDI, SSI, or both, speak with a qualified SSDI attorney as soon as possible.

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