The Difference Between SSI & Disability Benefits
There are two disability programs administered by the Social Security Administration: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). The definition of disability is the same for both, but SSI is a needs-based welfare program, and SSDI is available to disabled people who either have a sufficient work history or who have a parent or other relative who does.
Definition of Disability
To be considered disabled by the SSA, you must have a mental or physical impairment that prevents you from performing any significant work. The impairment must be documented by a medical professional, either a physician or psychiatrist. The SSA uses a five-step test to determine whether your impairment qualifies. It doesn't matter whether you can't do the work you previously performed, as long as the agency determines that you can do any meaningful work. If it is determined that you can't do any meaningful work, then you will be considered disabled.
If you have worked in five of the past 10 years, and you have a disability, you are eligible to collect SSDI. The amount you collect each month will be based on your earnings for those years. If you are older than 18 and were disabled before the age of 22, and you have a parent who is retired, disabled or deceased, you may be able to collect SSDI based on your parent's work record. When you qualify for SSDI, you also qualify for Medicare, after a two-year waiting period.
If you or your parents do not meet the work requirements for SSDI, you may be eligible to collect SSI benefits. SSI is a welfare program for the disabled or elderly who have insufficient work credits and who have little or no resources or income. You are allowed to own a car and a house and have less than $2,000 in other assets. SSI benefits were $698 per month, as of 2012. With SSI, you immediately qualify for Medicaid.
Each program has incentives to promote work. Under SSDI, there is a nine-month trial work period, during which you can earn any amount without losing your benefits. After the trial work period, you will lose your benefits if your gross monthly earnings (in 2012) exceed $1,010. If you are receiving SSI, you will lose 50 cents of benefits for each dollar of earnings, after the first $65 per month. Each program offers other incentives that may curtail the loss of benefits. They are fairly complicated, so check with SSA to learn how working might affect your benefits.
Richard Friedkin has many years of experience as a Certified Public Accountant, a Certified Financial Planner and a corporate CEO. He has been a writer for more than 30 years, writing everything from dense technical memos to whimsical children's stories. Friedkin's work has been published locally and performed on stage.