The Social Security Administration oversees two programs that provide benefits to disabled individuals: Social Security Disability Insurance (SSD) and Supplemental Security Income (SSI).
While the programs share similarities, the differences between SSD and SSI can make them confusing—particularly to sick, injured or disabled people who are in need of financial aid but new to seeking benefits through Social Security.
In this post, experienced disability attorney Michael Hartup—who serves clients from the greater Jackson, Tennessee, area—provides an overview of key differences between the SSD and SSI programs.
SSD and SSI Eligibility
One of the primary differences between SSD and SSI is eligibility. To receive SSD or SSI benefits, applicants must meet the Social Security Administration’s disability criteria, which defines a disability as a physical or mental impairment that prohibits work and has lasted or is expected to last for at least 12 months or result in death.
SSD benefits are earned through payroll tax contributions. These contributions are issued to the program’s trust fund and are allocated to disabled individuals based on a calculation of credits. SSD benefits may be paid to blind or disabled workers, as well as their dependents.
Unlike SSD, SSI is funded by general tax revenues, not contributions paid by employees and employers. SSI is a need-based program for low-income individuals and may be paid to disabled adults who meet income restrictions, children who are blind or disabled, or individuals age 65 and older who lack disabilities but meet financial limitations.
Calculating SSD Benefits
SSD benefits are based on a worker’s lifetime average earnings covered by Social Security, which includes a complex calculation of credits. Credits are earned by every employee who contributes to Social Security, and up to four credits can be earned every year—one credit per quarter.
In addition to meeting the Social Security Administration’s disability criteria, eligible SSD applicants must:
- Be disabled for at least five months prior to applying for benefits
- Have between six and 40 earned Social Security credits (depending on age)
- Have earned at least 20 credits within 40 calendar quarters that end when the disability began (for example, if you became disabled in the quarter you turned 31 or older, you would generally need to have worked for at least five years out of the 10-year period that ends in the quarter your disability occurred)
The SSD program is designed to help those who have already contributed significantly to Social Security. There are, however, exceptions for younger workers and the blind.
It should be noted that individuals applying for SSD benefits face a growing backlog and that during the initial application phase only about one-third of all SSD applications are approved. Working with a knowledgeable disability lawyer can improve your chances for approval upon your initial application or the appeal of a denied application.
Calculating SSI Benefits
SSI benefits are based on the Federal Benefit Rate, which is adjusted annually. To qualify, eligible recipients may not earn income that exceeds the Federal Benefit Rate. SSI payments are calculated by subtracting a recipient’s countable income from the Federal Benefit Rate then adding any state supplement.
In addition to meeting the Social Security Administration’s disability criteria and income restrictions, eligible SSI applicants must generally also be:
- Age 65 or older
- Blind or otherwise disabled
Again, some individuals age 65 and older who don’t have disabilities are eligible to receive SSI benefits. Children who are blind or otherwise disabled and whose parents have little income or resources may also be eligible for SSI benefits. In addition, some states add supplemental money to the basic SSI benefits.
SSD Payable Benefits and Duration
Payable benefits for SSD are calculated based on a worker’s previous earnings, or the average indexed monthly earnings (AIME): This calculation is an average of the worker’s earning over the lifetime of employment.
Eligible workers receive benefits equal to the primary insurance amount (PIA). PIA is adjusted annually per changes to the national average wage and the consumer price index. In 2017, the average SSD recipient received $1,171 per month or about $14,000 a year.
SSD recipients are grouped in one of three categories:
- Medical Improvement Expected (MIE)
- Medical Improvement Possible (MIP)
- Medical Improvement Not Expected (MINE)
The frequency of eligibility reviews is determined by the category in which an individual is placed. Eligibility reviews can be expected as follows:
- Medical Improvement Expected (MIE): Approximately every six to 18 months
- Medical Improvement Possible (MIP): Approximately every two to five years
- Medical Improvement Not Expected (MINE): Approximately every five to seven years
If at any time the Social Security Administration determines an SSD recipient can return to work, the benefits will stop. SSD recipients can collect benefits up to age 65, at which time SSD benefits convert to traditional Social Security retirement benefits.
SSI Payable Benefits and Duration
Unlike the SSD application process, there is generally no waiting period for SSI benefits, and in most cases accompanying Medicaid benefits are immediately available. In 2017, the average SSI recipient received $735 per month or about $9,000 a year.
SSI benefits may generally be received as long as the recipient’s income doesn’t exceed eligibility standards, even after the individual turns 65. Current SSI income requirements stipulate that:
- A single recipient has no more than $2,000 in assets
- A single recipient has no more than $750 per month in counted income
Not all income is counted toward the SSI counted income limit. For example, food stamps and tax refunds are excluded from the total counted income. Benefits are subtracted dollar-for-dollar for any amount over the Federal Benefit Rate; as countable income increases, SSI benefits will decrease.
How a Disability Lawyer can Help
Thousands of people in Tennessee rely on SSD and SSI benefits.
In 2016, more than 10 million Americans were paid SSD benefits—87 percent of recipients were disabled workers; the average age was 54. The same year, approximately 8.3 million Americans collected SSI—57 percent of SSI recipients had no income other than their SSI payment.
Tennessee has a high number of SSD and SSI recipients compared to other states. Approximately 7 percent of the state’s population collects SSD benefits and nearly 3 percent collects SSI.
Yet many disabled individuals who are eligible for benefits don’t get the financial assistance they need. Some get frustrated with the cumbersome application process; others give up if their initial application is denied.
Although you’re not required to work with an attorney to seek SSD or SSI benefits, hiring a disability benefits lawyer can help ensure that your application is properly completed and filed. Having an attorney on your side can also improve your chances for a successful appeal if your initial application is denied.