The Social Security Administration (SSA) receives payroll tax contributions from employed professionals, business owners and independent contractors. The funds that workers submit to the SSA help support multiple different benefit programs.
Many people only ever contact the SSA after they retire. Social Security retirement benefits can augment personal savings and pensions. However, some people require support from the SSA before they reach retirement age. Individuals with disabling medical conditions may become incapable of working due to factors outside of their control.
They may require financial support from specialized benefits programs. The SSA oversees the Social Security Disability Insurance (SSDI) program. People may also be eligible for Supplemental Security Income (SSI) benefits.
What are the main differences that separate SSDI benefits from SSI benefits?
SSDI is an earned benefit
Not everyone with a debilitating medical condition qualifies for SSDI benefits. The SSA has a very strict standard of disability for those seeking SSDI benefits. People generally need to be completely incapable of maintaining gainful employment and should have a condition that lasts at least a year or that is terminal.
Additionally, the applicant needs to have an adequate work history. The SSA tracks credits based on the income that workers earn. Applicants generally need to have multiple years of employment on record to qualify for SSDI benefits.
SSI is an entitlement program
Unlike SSDI benefits, SSI benefits are available to people who may not have made any employment-related contributions to Social Security. There are also more circumstances in which people could be eligible for SSI benefits, but there are also strict rules limiting an applicant’s income and assets.
Children with significant disabling medical conditions may be eligible for SSI despite never having worked. People who are legally blind may also qualify for SSI benefits, as do those with disabling medical conditions. Older adults with limited income and savings during retirement may also be eligible for SSI benefits.
Applying for either SSI or SSDI benefits can be a challenging process. Applicants may need help determining which program better suits their needs and navigating the bureaucratic red tape involved, and that’s okay. Learning the basics ahead of time can help people determine whether they need to apply for SSI or SSDI benefits.