Many people, including lawyers, confuse two very different government programs for disabled persons. Although both are overseen by the Social Security Administration (SSA), there are some significant differences both in how the programs are funded, and to whom the money is distributed.
Social Security Disability Income (SSDI)
SSDI is a program for disabled persons. It has no means test. In other words, there is no investigation into, or requirement based on, your finances to determine if you qualify for the program based on your income. You can receive SSDI if you have a physical or mental condition which prevents you from working for at least 12 months, or a disabling condition likely to lead to your death. Eligible candidates must be younger than 65 and have worked 5 out of the last 10 years.
A disabled person is eligible to receive Medicare after two years of receiving SSDI.
A person’s dependents are eligible to receive dependent’s benefits under SSDI.
Supplemental Security Income (SSI)
SSI is a means-tested program, which means qualifying for SSI is based on financial need and not work history. You must be blind, disabled or over the age of 65 to qualify. Additionally, you must have under $2,000 in assets and limited income. Children who are blind or disabled may also be eligible to receive SSI.
A disabled person on SSI is entitled to also receive Medicaid.
A person’s dependents are NOT eligible to receive SSI.
Dual SSDI and SSI
If a disabled person has worked enough to receive SSDI, but the benefit amount is less than the SSI amount, SSI will give you enough to equal the SSI monthly amount.
You can own your own home under both programs, however under SSI you must live in it, and you will not be paid the part of your SSI earmarked to go towards housing expenses.
You can work under either program, but the rules are very different for each program. It is especially important to know how many hours you can work under SSI before you lose your benefits since most people who receive SSI also receive Medicaid and cannot afford to lose their medical benefits.
Special Needs Trusts and SSI
If a disabled person is receiving SSI and receives a windfall by either a personal injury settlement or an inheritance, that beneficiary must establish a Supplemental Needs Trust to protect the SSI government benefit. Since SSDI is not means-tested, an SNT is unnecessary to protect you from losing your SSDI in the event of receiving a lump sum payout.