TYPES OF SOCIAL SECURITY DISABILITY BENEFITS
While there are several types of Social Security disability benefits, there are two main types. One is Social Security Disability Insurance (“SSDI”), and the other is Supplemental Security Income (“SSI”). Both types pay benefits to disabled people and they both have the same medical eligibility rules. However, they each have different non-medical eligibility rules and pay different benefits. Disabled people can qualify for one type of benefit or the other, and sometimes even both! When people qualify for both multiple types of benefits it is a good idea to file under all of them in order to maximize their potential benefits.
Supplemental Security Income (“SSI”)
Supplemental Security Income (“SSI”) is the federal welfare program for disabled or aged persons. SSI claims are not based on an applicant’s work history. An applicant can qualify for SSI even if he or she has only worked a little bit, worked a long time ago, or never worked at all! Unlike SSDI, there is no date last insured in SSI claims. SSI applicants do not have to show that their disability started before a particular date in order to qualify for benefits.
The SSI benefit amount has nothing to do with how much FICA an applicant paid. Instead, the amount is set by law and depends on what state the applicant lives in as well as his or her living situation. In California, the 2017 SSI monthly SSI amount (including both the federal and state contributions) was $654.24 for individuals living in someone else’s household, $895.72 for individuals living independently, and $982.04 for individuals living independently but have no cooking facilities. If both spouses are disabled, the combined SSI benefit is $1,147.75 if they are living in someone else’s household, $1,510.14 if they are living independently, and $1,682.77 if they are living independently but have no cooking facilities.
SSI is a “needs-based” program, which means in order to qualify you must have “limited” resources and income.
Resources. A resource (or asset) is money as well as something that one can own and can turn into cash. Examples of resources are property, stocks and bonds, and bank accounts. To qualify for SSI, an applicant’s countable resources must not be worth more than $2,000 if he or she is single and $3,000 if he or she is married. This is called the resource limit. Fortunately, some resources are considered “exempt” and do not count toward the resource limit. These include the house you live in (even if it is worth a million dollars!), one vehicle if you or a member of your household use it for transportation, burial plots, and life insurance policies with face amounts of $1,500 or less.
Income. This does not mean just cash. It also means anything “in kind” that can be used to meet one’s needs for food and shelter, which could be food or shelter itself, or something that can be used to obtain food or shelter.
SSA counts income each month. To the extent income is “countable,” there will be a dollar-for-dollar reduction in one’s SSI benefit. If an applicant’s countable income is higher than his or her SSI benefit, the SSI benefit is reduced to zero. Income is either “earned” or “unearned,” and the SSA has different rules for counting each type. Earned income is wages, net earnings from self-employment tax, certain royalties and honoraria, and sheltered workshop payments. Unearned income is income that is not earned, such as Social Security benefits, pensions, state disability payments, unemployment benefits, interest income, and cash from friends and relatives. Examples of payments or services which SSA does not count include: (1) the first $20 of “unearned” income received in a month; and (2) the first $65 of earned income received in a month; and (3) ½ of earned income over $65 per month; (4) small amounts of income received irregularly; (5) income tax refunds; (6) grants, scholarships, fellowships or gifts used for tuition and education expenses; and (7) loans that must be repaid.
If an applicant is married and living with his or her spouse, or with his or her parents, the spouse’s or parents’ income will be counted as the applicant’s income under the SSA’s “deeming” rules.
As you can see, SSI’s non-medical eligibility rules are tricky. The main thing to remember is that even small amounts of resources or income can be enough to reduce one’s SSI payment or even totally disqualify someone from SSI eligibility.
SSI applicants have an ongoing duty to report certain life changes which may affect their eligibility to receive SSI or the amount of their benefit, such as changes of address, changes in living arrangements, changes in income or resources, death of a spouse or someone else in the household, change in marital status, change in immigration status, change in school attendance, change in help with living expenses, and incarceration in jail or prison. If an SSI recipient fails to report a change which would have reduced or eliminated SSI eligibility, SSA my eventually find out and charge the recipient with an “overpayment” which will have to be paid back. We strongly recommend that applicants report these changes in writing, in case SSA claims that you failed to report.
Unlike SSDI applicants, successful SSI applicants are not subject to a 5-month waiting period. SSI applicants are eligible to receive back pay retroactive to the beginning of the month following their application (assuming their disability started by then). This is called the SSI entitlement date.
Successful SSI applicants do not qualify for federal Medicare insurance, but they do qualify for state Medicaid (in California this is called “Medi-Cal”) insurance. Medicaid eligibility starts one month after the SSI entitlement date.
As stated above, SSDI retroactive back pay is paid as one lump sum. For SSI, small amounts of back pay (up to three months’ worth of payments) are paid in a lump sum. However, larger amounts of back pay are split into three payments, six months apart.