Phillips & Ingrum

The Difference Between Social Security and SSI

By Grayson Cannon

Phillips-Ingrum-Headshots-15_finalClients frequently have questions about the difference between Social Security and SSI.  Some people even use the terms interchangeably, but they are NOT the same and mean two very different things.  There are disability (and retirement) benefits available under both programs, but it’s important to understand the differences between them in order to understand what getting each type of benefit might mean.

First, let’s discuss what’s the same about the programs.  From a disability standpoint, the Social Security Administration applies the same medical standards to determine whether a person is disabled for both programs.  The financial aspects of each program are where the differences lie.

SSI stands for Supplemental Security Income benefits.  These are available under Title XVI of the Social Security Act.  SSI is a needs based program and a recipient of this type of benefit may not have more than $2000 in resources for a single individual and $3000 for a couple.  The maximum monthly SSI benefit is $733 per month (this amount is subject to annual cost of living adjustments).  Because there is a dollar for dollar offset for both earned and unearned income, a benefit recipient may not have income in excess of the SSI maximum in any form.  If an SSI recipient is receiving housing from another, the max benefit is reduced by 1/3 to $488 per month.  An individual need not have any recent work history, or any work history, to qualify.  SSI recipients are eligible for Medicaid, which is called TennCare in Tennessee.

Social Security Disability Insurance (SSDI) benefits under Title II of the Social Security Act are based on the work history of the applicant and how much they have paid into the Social Security system through their years of FICA taxes.  If a person has not worked, or has not worked recently, they might not be eligible.  The amount of the monthly benefit is based on how much the worker has paid in, but the maximum amount payable no matter how much a person’s earnings have been, is about $2600 per month.  SSDI is not sensitive to unearned income, so a person may receive unlimited amounts of inheritance, gifts or non-work earnings like interest on an investment account.  There are also no resource limitations, so if an SSDI recipient has accumulated savings, retirement or other wealth, it will not prevent them from receiving benefits.  There is an $1130 per month limitation on earned income from one’s mental or physical labors, which is also adjusted for cost of living each year.  SSDI beneficiaries may also have auxiliary benefits available for minor children or spouses.  SSDI beneficiaries can get Medicare (just as if they were retired) after about two years of being disabled.

As you can see, the distinction between these benefits is very important.  If you are thinking of leaving a disabled person a bequest in an estate plan, for example, you should know which type of benefits they receive in order to determine whether your gift would affect their right to benefits.  If you have questions about eligibility for benefits under either or both Social Security programs, call us.  We can help answer your questions.