Social Security • April 17th, 2020

What's the difference between SSI and SSDI?

Gail Kellner

Key Takeaways
  • SSI is based on need, SSDI is based on your work history and amount of earned income credits.
  • Both programs have the same definition of a disability.
  • SSI recipients automatically qualify for Medicaid; SSDI recipients qualify for Medicare after 24 months.

Are you eligible for SSI benefits? How about SSDI? What’s the difference? The Social Security Administration offers these two different disability benefits. They have different eligibility requirements and serve slightly different demographics. When you’re planning how to fund your retirement, you need to be familiar with these two types of Social Security programs, what you need to qualify, and how to apply.

What is SSI?

Supplemental Security Income, or SSI, is based on financial need. Your income must be below a certain amount. This program gives cash assistance to aged, blind, and disabled people who have very limited financial resources. You can qualify regardless of whether you worked and paid into Social Security. Adults 65 and older can collect SSI even if they do not have an underlying disability provided they meet the financial limits.

The maximum monthly payments for SSI in 2020 are:

  • $783 for an eligible individual
  • $1175 for an eligible individual with an eligible spouse

How to qualify for SSI

SSI disability benefits are based on income. You can qualify if you are disabled, blind, or over 65. The Social Security Administration is relatively narrow as it considers you disabled only if you:

  • Cannot do the work that you did before
  • Cannot do any other type of work
  • Your disability is expected to last for at least a year or result in death

In addition, you must have “limited resources” or less than $2,000 for a child or $3,000 for a couple. Resources are:

  • Cash
  • Bank accounts, stocks, bonds
  • Land
  • Vehicles
  • Personal property
  • Life insurance
  • Anything you own that could be converted to cash and used for food or shelter

They don’t count your primary residence as an asset.

Everyone starts with the same monthly benefit for SSI, but there’s a formula that the SSA uses to determine if they need to reduce your benefit. The first $65 you earn isn’t considered, but after that every two dollars you earn results in a one dollar reduction in your benefits.

In most states, if you qualify for SSI you automatically qualify for Medicaid.

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What is SSDI?

Social Security Disability Insurance (SSDI) program is for disabled people who have a qualifying work history. The Social Security Administration bases your SSDI monthly payment on your lifetime average earnings. Here is how long you need to have worked, based on your age:

  • If you are 24 or younger when you become disabled, you need to have worked for 1.5 of the previous 3 years prior to becoming disabled.
  • If you are between 24 and 30, you need to have worked for at least half the time between 21 and the time you became disabled.
  • If you're older than 31, you need to have worked for at least 5 years of the previous 10 years prior to becoming disabled.

If you still work, and you make over a certain amount, the SSA doesn’t consider you disabled. Someone receiving SSDI benefits qualifies for Medicare after 24 months of receiving disability payments.

How to qualify for SSDI

Since SSDI is based on work history, benefits can vary. You earn work credits based on income. When you have earned at least 40 work credits, with 20 of them being in the last ten years, you can apply for SSDI. Each work credit in 2020 equals $1,410 in wages or self-employment income.

The SSA has a list of medical conditions which they consider so severe they prevent someone from engaging in substantial gainful activity. They are broken down by category, for example, neurological disorders, immune system disorders, etc. You’ll need medical documentation to support your claim.

What if your disability is not on the list? The SSA evaluates those on a case-by-case basis.

It’s possible to receive SSI and SSDI at the same time, but money you receive from SSDI counts as income. If you earn too much in SSDI, you will exceed the income limits for SSI.

When you apply for SSDI, you should be screened for SSI benefits as well.

Tip: In the majority of cases, you cannot recieve both SSDI and Social Security retirement benefits at the same time. You can, however, potentially switch from retirement benefits to disability benefits if you took your retirement benefits before your full retirement age.

How to apply

You can apply for SSDI benefits online. To apply for SSI, you can file online or you can go to your local Social Security office or apply over the phone. You’ll need:

  • Social Security card
  • Proof of citizenship or documented alien
  • Proof of income
  • Proof of resources
  • Proof of living arrangements
  • Medical sources
  • Work history

For both programs, the SSA will review your application and supporting documents and make a decision as to whether or not you qualify for benefits. If you don’t agree with their decision, the letter they send you should have information on how to appeal.

Bottom Line

This is a lot of information to wade through. How do you make sure you get all of the benefits you qualify for? A Certified Financial Planner® from Retirable can help you figure out what you qualify for and how to apply.

Author

Gail Kellner

Gail Kellner lives with her husband, two sons, and various fur-children. She writes about personal finance and insurance mostly, with a little bit of parenting thrown in. She also writes YA Fantasy fiction in her spare time, and her first YA novel will be published later this year.