Key Differences Between SSI and SSDI
January 31st, 2017 by Attorney John Colvin
Applying for Social Security disability benefits can be confusing, especially if you don’t know which benefits are most appropriate for your situation.
The Social Security Administration offers two types of disability benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). The programs are similar, in that they both require proof of disability. But they differ in some fundamental ways, which are explained below.
SSDI Eligibility and Insured Status
The reason SSDI is a disability “insurance” is because workers pay into the Disability Insurance Trust Fund during their lifetime, usually by means of automatic payroll deductions. Just like with a private insurance policy , SSDI is a benefit you may never need, but you have to contribute to the fund in order to be insured, regardless.
If you should become disabled and wish to apply for SSDI benefits, the SSA will look at your work history to determine whether you’re financially eligible. That process involves calculating your Social Security work credits also referred to as quarters of coverage (QCs), which are essentially points you earn for working. The number of credits (QCs) you need to qualify for benefits depends on your age.
As a general rule, to be fully insured a claimant must have one quarter of coverage (QC) for every calendar year after the year in which he or she turned 21, up to the calendar year before becoming disabled, however, no more than 40 work credits (QCs) are ever required. For example: To be eligible for SSDI, an applicant who is age 62 or older generally needs 40 work credits – 20 of which must be within the 10 years preceding the disability. According to www.ssa.gov , “The amount of earnings required for a quarter of coverage (QC) in 2017 is now $1,300. In 2016, the amount needed was $1,260 for one quarter of coverage.” The Administration states on their website that “Quarter of Coverage” is a legal term used interchangeably with the term “Social Security credit” (or just “credit”). A QC is the basic unit for determining whether a worker is insured under the Social Security program. No matter how high your earnings may be, you can not earn more than 4 QC’s in one year. Accordingly, you can earn only four credits (quarters of coverage) per year, and the way credits are awarded may change from year to year. Let’s say for example in 2016, if you earned $1,260, you also earned one credit for the quarter in which it was earned. Therefore, a quarter of coverage is acquired on the first day of the quarter in which it is assigned.
The SSA also accounts for the fact that some people have not been in the workforce long enough to accumulate 40 credits (QCs). In regards to disability insured status for claimants over 31 years old, the rule is that they must have 20 quarters of coverage out of the 40 calendar quarters before they become disabled. The SSA refers to this requirement as the 20/40 Rule. Accordingly, workers between age 31 and 62 require fewer than 40 credits (QCs), but no fewer than 20 credits (QCs).
For claimants who become disabled before age 31 there is a reduced quarter of coverage requirement. The claimant between the ages of 24 and 31 must have earned credits (QCs) in one-half the calendar quarters beginning with the quarter after the quarter in which he or she attained age 21 and ending with quarter in which he or she becomes disabled. A minimum of 6 quarters of coverage (QCs) is required. For claimants that become disabled before age 24, the SSA applies yet another rule that establishes that the claimant must simply have 6 credits (QCs) in the 12 quarter period ending with the quarter in which disability began. For example, if you become disabled before age 24, you may qualify if you have at least six quarters of coverage in the previous three years. Unlike the reduced quarter requirement for claimants over age 24, there is no requirement that the credits (QCs) be earned after attaining age 21. SSI Nondisability Requirements and Resource Rules
You don’t need work credits to apply for SSI, because the program is based only on financial need. People age 65 and older that do not have a disability but meet income requirements may be eligible for SSI.
Generally, to qualify for SSI, an individual must have $2,000 or less in resources; a couple must have $3,000 or less in resources. Those resources include bank accounts, cash, stocks, bonds, and real estate (except your home and personal residential property).
The SSA will not count as resources any funds you receive from the Supplemental Nutritional Assistance Program, your personal vehicle, or the first $20 of income you receive each month. But the Administration may consider a spouse’s income, or parents’ income, in certain circumstances by applying a formula that is called “deeming.”
With the exception of SSI applicants age 65 and older, all applicants for SSI and SSDI must provide medical evidence that proves their disability prevents them from engaging in substantial gainful activity. In 2017, substantial gainful activity is defined as earnings of at least $1,170 per month, or $1,950 per month for people who are statutorily blind.
Different rules apply for minor children, of course, as there is no way to apply the substantial gainful activity rule. But they must meet the official criteria for disability. Children older than 18 with a disability that began before age 22 may also qualify for benefits in certain circumstances under their parents’ work credits history.
Learn More About The Key Differences Between SSI and SSDI
If you think SSI and SSDI benefits are complicated, you’re not alone. John R. Colvin, Attorney at Law, has helped many clients throughout Tennessee and Alabama who have needed guidance about applying for benefits. He has also assisted families whose benefit applications were denied. For advice on how to proceed next or if you have any questions about this topic, call 1-931-962-1044 or submit our online form. Put his bold approach and client focus to work for you.