Social Security Disability Insurance (SSDI) & Supplemental Security Income (SSI) - The Basics

Steve Richardson from the Social Security Administration gave an overview of the Supplemental Secu­rity Income (SSI) and Social Security Disability Insurance (SSDI) programs at the February 8 th Com­munity Resource Center Informa­tion Session.

The Social Security Administra­tion (SSA) administers several cash assistance programs that aid eligible Americans, including SSI and SSDI in addition to retirement benefits, survivor’s benefits and Medicare.

SOCIAL SECURITY DISABILITY INSURANCE (SSDI)

Qualified Work

This program covers only those who have paid into the Social Security system through qualified work. Generally one has to have earned 40 quarters of qualified work to qualify, and of these, five years of work (or 20 out of the 40 quarters) have to have been within the past 10 years. Younger adults (age 30 or younger), are required to have worked a prorated number of quarters. See http://www.ssa.gov/pubs/10072.html#number for specific work requirements based on age of onset of disability.

Onset Date

The SSA ‘approved onset date’ is the month and year someone was last physically able to work. It determines when benefits will start and often differs from the date of application. One advocacy note: this doesn’t always exactly match the last date of employment either. Question patients closely about their work history. It is not uncommon for SSA to contact an employer and find that they were really “carrying” an employee for some time who really was not physically able do their job. In these cases SSA may find that the date of onset is earlier than the last date of employment.

Waiting Period and Retroactive Benefits

SSDI has a five month waiting period before benefits begin. The program was designed under the assumption that workers either do or should have five months of savings they can draw on. There is often confusion about this waiting period and retroactive benefits. As an example, SSA determines that Mr. X has a date of onset of disability nine months ago. He would be due retroactive benefits for four months (9 months disabled – 5 month waiting period = 4 months benefits due). SSDI can pay up to 12 months of retroactive disability. It is important to apply in a timely manner to avoid forfeiting payment for months beyond that limit.

It usually takes 3 to 5 months to process an application. So if someone is beyond the five month waiting period at application she or he would also be due these months retroactively.

Benefits

SSDI benefits are determined by a formula that takes into account the applicant’s income and age. Currently the highest benefit is $2,056 a month. The formula assumes that the beneficiary, had she or he not become disabled would have earned raises of 3% a year. So someone who is disabled relatively young is assumed to have a higher earning potential and would get a higher benefit than someone older who is disabled at the same income.

Special Case- Disabled Adult Child

If a disabled adult has an adult disabled child that child can get SSDI benefits once the parent comes onto the rolls (this is true also for a non-disabled parent who starts receiving retirement benefits or if the parent is deceased).

SURVIVOR’S BENEFITS

When a person who has worked and paid Social Security taxes dies, certain members of the family may be eligible for survivors benefits. The same “qualified work” rules used for SSDI apply.

Social Security survivors benefits can be paid to:

• A widow or widower -- full benefits at full retirement age, or reduced benefits as early as age 60
• A disabled widow or widower -- as early as age 50
• A widow or widower at any age if he or she takes care of the deceased's child who is under age 16 or disabled, and receiving Social Security benefits
• Unmarried children under 18, or up to age 19 if they are attending high school full time. Under certain circumstances, benefits can be paid to stepchildren, grandchildren, or adopted children.
• Children at any age who were disabled before age 22 and remain disabled.
• Dependent parents age 62 or older

SOCIAL SECURITY INCOME (SSI)

Social Security Income (SSI) is a needs based program. One does NOT have to have paid into the social security system to qualify for benefits – it is funded through general tax revenues.

Eligibility

• To get SSI benefits, one must be disabled, blind, or at least 65 years old.
• The program is needs based, but relatively generous. A single parent with two children might be eligible with income up to the low $40K/year range. Explained in more detail below, but basically if one earns less than the monthly benefit and are otherwise eligible, one can receive benefits.
• The SSI asset/resource limits are $2,000 for an individual and $3,000 for a couple.
• Living arrangements are part of the equation. Whether one is living alone or sharing lodging and expenses affects income eligibility.
• Massachusetts is among a minority of states who supplement SSI benefits (32 states do not).

Income

Examples of payments or services not counted as income for the SSI program (not a complete list):

• the first $20 of most income received in a month;
• the first $65 of earnings and one–half of earnings over $65 received in a month;
• the value of food stamps;
• income tax refunds;
• home energy assistance;
• assistance based on need funded by a State or local government;
• small amounts of income received irregularly or infrequently;
• interest or dividends earned on countable resources or resources excluded under other Federal laws (effective July 1, 2004);
• grants, scholarships, fellowships or gifts used for tuition and educational expenses (effective June 1, 2004);
• food or shelter based on need provided by nonprofit agencies;
• loans (cash or in–kind) that have to be repaid;
• money someone else spends to pay recipient’s expenses for items other than food or shelter (e.g., someone else pays recipient’s telephone or medical bills);
• income set aside under a Plan to Achieve Self–Support (PASS). See below or Plans to Achieve Self–Support for more information.

Determining Individual Income Limits and Benefit Levels

Step 1: SSA subtracts any non- countable income from the total gross income. The remainder is the "countable income".

Total Income - non-counted income  = Countable income

Step 2: SSA subtracts "countable income" from the SSI Federal benefit rate. The benefit rate varies based on living arrangement and type of qualifying disability. The result is the recipient’s monthly SSI benefit.

Maximum federal benefit* - countable income =  Individual SSI Federal benefit

*The maximum federal benefit is officially called the SSI Federal Benefit Rate. The 2010 Federal Benefit Rate is $674 for an individual and $1,011 for an eligible individual with an eligible spouse. It generally changes yearly. For 2010, however, the rate is the same as in 2009 because cost of living indicators actually went down.

SSI Work Incentives

The Plans to Achieve Self–Support (PASS) allows a blind or disabled SSI recipient to accumulate more than the usually allowable total resource limit to be used to further the recipient’s employability.

A plan must:

• be in writing and be approved by SSA;
• have a specific work goal which the recipient can probably reach;
• say how long it will take for the recipient to reach the goal;
• say what income or resources the recipient will set aside and how it will be spent;
• explain how the recipient will keep the income or resources set aside separate from other money; and
• describe any goods and services needed to reach the goal and explain why they are needed.

The PASS application Form SSA–545–BK is available from local Social Security offices or online at www.socialsecurity.gov/online/ssa-545.html. SSA also has contracts with different organizations to assist disabled beneficiaries who want to work. For more information, go to the Social Security work site at: www.socialsecurity.gov/work/.

Other SSI work rules such as work expense exclusions, the student earned income exclusion, and continued Medicaid coverage may help an SSI recipient while working.

-Thanks to Steve Richardson for his presentation.

2/07