Social Security is the major source of income for most of the elderly, but it provides more than just retirement benefits.
While both Social Security Disability Insurance (SSD or SSDI) and Supplemental Security Income (SSI) are popular benefits programs, do you know how both are funded? Where does the money come from that is paid out to beneficiaries?
Below, disability attorney Michael Hartup explains how both programs are funded and who is eligible to receive those benefits.
What is Social Security Disability Insurance?
Social Security Disability Insurance is a program run by the Social Security Administration (SSA) that provides benefits to sick, injured, or disabled people in need of financial aid. For those who can no longer work, SSDI helps to replace some of their lost income.
How is Social Security Disability Insurance Funded?
Social Security Disability Insurance funds come from workers and their employers. Employees work and pay Social Security taxes on their earnings. They also earn coverage for benefits. Currently, the tax rate for Social Security is 6.2% for both the employer and the employee.
Where does this money go so that people receiving SSDI benefits can use it? A Disability Insurance Trust Fund is a separate account in the United States Treasury. Taxes are deposited in the fund every business day.
This trust fund can pay out monthly benefits to disabled workers and their dependents, without the SSA needing to request money from Congress.
Who is Eligible for SSDI?
To be eligible for SSDI benefits, you must meet the SSA’s definition of disability under the Social Security Act. Qualifying as disabled means you:
- Cannot work due to severe medical condition that has lasted (or is expected to) more than 1 year or result in death
- The condition must prevent you from doing work you did in the past
- The condition must prevent you from adjusting to other work
You must apply for disability benefits online or in your state’s local SSA office. From there, your state’s Disability Determination Services office will decide whether you qualify for SSDI or not.
If you qualify, your payments usually begin with your sixth full month of disability. The date you’re paid depends on the birthdate of the person who qualified.
What is Supplemental Security Income?
Supplemental Security Income, is another financial aid program run by the SSA. While SSDI awards benefits to workers who paid Social Security taxes, SSI awards benefits based on financial need. It helps aged, blind, and disabled people who have little or no income.
How is Supplemental Security Income Funded?
SSI is a Federal income supplement program funded by general tax revenues, not Social Security taxes. This program is financed by general funds of the U.S. Treasury — personal income taxes, corporate and other taxes.
SSI benefits are based on the Federal Benefit Rate, which is adjusted annually. As of January 1, 2020, the rate is $783 for an individual and $1,175 for a couple. Some states supplement the Federal SSI benefit with additional payments, making the total benefit levels higher in those states.
Who is Eligible for SSI?
To qualify for SSI benefits, you may not earn income that exceeds the Federal Benefit Rate. You must generally also be:
- Age 65 or older
- Blind or otherwise disabled
However, some individuals who meet the age requirement but do not have disabilities are eligible to receive SSI benefits. Likewise, children who are blind or disabled and whose parents meet the income requirements may also be eligible.
You can apply for SSI online or with your local SSA office. Your application will be reviewed to see if you meet the SSA’s basic requirements for disability benefits. Your state’s Disability Determination Services office will decide whether or not you qualify.
If you qualify, you’ll receive a letter from the SSA outlining when your payments will start and how much they’ll be. The SSA calculates your first SSI payment from the first full month after you applied or became eligible for SSI. The amount depends on income and other factors, and it may not be the same every month.
Do I Need an Attorney to Apply for SSDI or SSI?
You’re not required to hire a lawyer to apply for either program, but having an experienced disability lawyer on your side can help a great deal.
Many initial applications are denied every year if your work history or medical is incomplete, your disability date is incorrect, or you’ve failed to follow your doctor’s instructions.
A lawyer can help you file your initial application correctly, raising your chances of approval. And if your application is denied, a lawyer can help you appeal the claim.
If you or a loved one is seeking disability benefits in Tennessee, contact disability lawyer Michael Hartup at (731) 424-5559 or fill out our online contact form. You can also find more resources and law firm updates by liking and following our Facebook page.
The Law Offices of Michael Hartup can assist you with applying for SSDI or SSI benefits, as well as appeal a denied claim. Schedule your free consultation with our attorneys today.