SSDI vs SSI Benefits: Key Differences You Need to Know

Exploring the Essentials of SSDI and SSI Benefits

Learning about different government benefit programs can feel overwhelming. Two such programs, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), are confusingly similar. In this guide, we will illuminate key differences so that you can feel confident in doing what is right for you or your loved one.

Understanding SSI Benefits

SSI benefits are monthly payments designed to help individuals with limited income and resources meet their basic needs for food, clothing, and shelter who do not have sufficient wage contributions to Social Security. SSI is a needs-based program, with medical and financial eligibility criteria, funded by general federal tax revenues. SSI is specifically targeted toward individuals who may not have a significant work history but require financial assistance. On the other hand, SSDI benefits are based on your work history payroll contributions to Social Security. The amount of wage contributions required in order to qualify for this benefit depends on your age. A Social Security Disability attorney can assist in navigating the application process and maintaining eligibility, ensuring that applicants receive the support they need from either program.

This valuable benefit is why even though working “under the table” for cash may seem attractive, the long term consequences can mean that you will not have the support you need in terms of income or health care if you become disabled. We are all just an injury, illness, or accident away from needing this support.

Key Differences Between SSDI and SSI

Although SSDI and SSI share the goal of providing financial relief, their fundamentals differ. Here are the primary differences:

• Eligibility: SSDI is available to individuals who have accumulated sufficient work credits through employment and contributions to the Social Security system. In contrast, SSI is available to individuals based on financial need, regardless of work history.
• Funding Sources: SSDI benefits are funded through payroll taxes under the Federal Insurance Contributions Act (FICA). SSI benefits are funded by general tax revenues.
• Benefits Amount: SSDI payments are calculated based on the recipient’s work history, duration, and earnings, resulting in potentially higher benefit amounts. SSI payments, on the other hand, are capped at a federal maximum rate, which is adjusted annually. Some states also supplement SSI benefits.
• Healthcare Coverage: SSDI beneficiaries automatically qualify for Medicare after a two-year waiting period, while SSI recipients in most, but not all, states automatically qualify for Medicaid, which begins immediately upon approval.

Concurrent Benefits: When SSDI and SSI Benefits Meet

Occasionally, individuals discover they meet the criteria for both SSDI and SSI benefits at once. These concurrent benefits may arise when someone’s SSDI payment leaves them below the SSI threshold. Managing two separate programs with distinct guidelines can become complicated. An experienced Social Security attorney can help applicants remain compliant and retain as much support as possible.

Why Understanding These Differences Matters

Choosing the right program to apply for, or understanding eligibility for both, is crucial for securing the financial assistance needed to cover living expenses and healthcare costs. Missteps in the application process or misunderstanding requirements can cause delays, get your application denied, or mean you miss out on benefits entirely.

Moving Forward with Confidence

Choosing the best path—SSDI, SSI, or even both—can make everyday life more manageable. Michigan Law Center understands that balancing financial obligations, health concerns, and long-term plans is not easy. To learn more nuances of these benefits, watch our free webinar: Preparing for and Managing Supplemental Security Income Benefits where we offer more guidance to effectively manage your benefits.