Difference Between SSDI and SSI

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are similar in that they serve as a safety net for individuals who would otherwise likely find themselves in severe poverty.

The two federal programs adhere to the same strict definition of “disabled,” which is that recipients must be blind, terminally ill or severely limited in function or gainful employment for at least year. The acronyms are similar as well, so it’s understandable the two are frequently confused.

But as our Boston disability attorneys at Jeffrey Glassman Injury Lawyers can explain, that’s about where the likeness ends. SSDI and SSI were established at different times and under different circumstances, are financed in different ways and usually serve different people (though in some cases, individuals can obtain both kinds of benefits).

Here, we offer a breakdown of the history of both programs and some key differences. The purpose is to help potential claimants discern which is probably best for the current situation they face.

SSDI is a type of earned benefit that is available to individuals who suffer severe physical and/or mental impairments that prevents them from working. The ailment must be at least 12 months in duration (or expected to last that long) or else be considered a terminal condition.

The Social Security Disability Insurance program was first considered by lawmakers in the 1930s. However, in its initial form, the definition of “disability” was strict, requiring the underlying condition render a person totally unable to secure substantial gainful employment for life.

When it was passed in its more modern form by Congress in 1956, it was only available to people who were 55 and older. The rules were amended in 1960 to allow benefits for disabled workers of any age, as well as their dependents. Benefits were granted based on one’s previous work record, including length of service and wages.

SSI, meanwhile, is a strictly need-based program that was implemented in 1974 – fourteen years after the passage of SSDI – in order to replace a disparate patchwork of state-level programs for those who were disabled or in need.

Specifically, aid to the blind, permanently and totally disabled and the elderly were federalized and put under the jurisdiction of the Social Security Administration. Initially, those who created the policy envisioned it would mostly serve the elderly. However, by the mid-1990s, two-thirds of the recipients were disabled younger adults and children. That trend has continued.

SSI benefits have never tied to a person’s work record the way SSDI benefits are.

Although both programs are administered by the Social Security Administration, they are funded by two separate sources.

• SSDI funding source – Social Security tax rolls
• SSI funding source – General revenues from the U.S. Treasury

While the SSI program doled out $54 billion in benefits in 2013 (which included $3 billion in federally-administered state supplementation), the SSDI program paid about $134 billion that same year. SSI served about 8.4 million people, paying on average $529 a month per person, while SSDI served 10.2 million, with an average monthly benefit of $1,146.

• SSDI average recipient – Men (52 percent), average age of 53, about a third of those suffering from a mental disorder.
• SSI average recipient – Women (53 percent), nearly 60 percent between the ages of 18 and 64, with 90 percent obtaining eligibility on the basis of disability and more than half having no other income aside from SSI payments.

Because it is paid solely through payroll taxes, only those who have paid into it are eligible to collect it. That brings us to the biggest difference between the two programs:

• SSDI eligibility – Requires a fairly extensive work history in a job for which worker paid Social Security Disability Insurance taxes, creating a “point” system threshold for benefits;
• SSI eligibility – Requires evidence of financial need, as determined by an analysis of one’s income and assets.

SSDI recipients aren’t limited in the amount of assets or unearned income they can have the way SSI does. However, the Social Security Administration does limit the amount of money that can be earned through work when receiving SSDI. The idea is if you can earn an income, you aren’t disabled. In 2015, that limit was $1,090 for disabled applicants and $1,820 for blind applicants. The rules differ slightly for owners of businesses. Also, unlike SSI, there is no limit for SSDI recipients on unearned income, such as that collected from investments, interests or a spouse’s income.

Once benefits are awarded for SSDI, the Social Security Administration will review a recipient’s file every 3 to 7 years to determine whether the disability is ongoing. In the case of SSI recipients, benefits are reviewed every year.

A recent report from the Social Security Administration revealed that 1 in every 8 recipients of SSDI was also receiving SSI benefits.