What is the Difference Between SSDI and SSI?

For those who are disabled by an injury or an illness or medical condition and can no longer work, the Social Security Administration offers help. Social Security offers two different programs to help the disabled with cash benefits. These programs are Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Beyond providing cash to the disabled, these programs have very little in common.

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What is SSI?

SSI is Supplemental Security Income. This is a government program established in 1974 as part of a welfare reform package. SSI was intended to replace federal-state adult assistance programs. These programs, that each state administered were not consistent in their eligibility requirements from one state to another. So, they replaced these “welfare” programs with SSI and added it to the Social Security Act Title XVI (16).

At this time in 1974, President Richard Nixon was attempting to reform the welfare programs where federal funds were given to the states and they administered programs such as Aid to the Permanently and Totally Disabled, Aid to the Blind and Aid to the Elderly. These programs were eliminated and replaced with Supplemental Security Income (SSI). The Social Security Amendments of 1972 were signed into law on October 30th, 1972. SSI began operating on the first day 0f 1974.

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Congress chose the Social Security Administration to administer the new Supplemental Security Income Program because they were already administering the Social Security Disability Insurance (SSDI) for workers since 1956. As a part of the Social Security Administration, through the Disability Insurance Benefits program (DIB), SSDI was funded through a payroll tax deduction from the Federal Insurance Contributions Act (FICA).

SSI, on the other hand, is funded through the General Fund NOT through the Social Security trust fund. Supplemental Security Income program is a means-tested program that gives assistance in the form of cash and health benefits to those who meet its criteria.

What is SSDI?

SSDI is Social Security Disability Insurance. Funded by workers and employers through a payroll tax, SSDI is a federal program managed by the Social Security Administration. The aim of the program is to supplement income to those who cannot work due to severe disability. Unlike SSI, the Social Security Disability Insurance is not a means test but rather a test of the individual’s disability.

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A legitimate disability must be proven for someone to receive SSDI, no matter what their financial situation is. Also, unlike SSI, the Social Security Disability Insurance was signed into law in August of 1935 by President Roosevelt. By 2011 the SSDI rolls showed 10.6 million American on SSDI. The Social Security Administration was amended in 1985. This act was called the Social Security Disability Benefits Reform Act of 1984. This law loosened the medical restrictions by paying more attention to the patient’s “pain and discomfort” than medical testimonies.  It loosened the criteria for screening mental illness, said that a multiple of several small problems that were not severe could be considered a disability and paid more attention to what the applicant’s physician said than to the medical records. All of these changes opened the door for a lot more individuals to find their way into the program, straining the ability of the trust fund to cover it through the years.

SSDI has changed again in 2017 when the final rules were entitled “Revisions to Rules Regarding the Evaluation of Medical Evidence.” This loosened the restrictions even more by expanding the definition of the ‘acceptable medical source’ to physician’s assistants and nurse practitioners as well as doctors. If you qualify for SSDI, you receive a monthly cash benefit based on your earnings over the years. In 2017 there were 8.8 million people receiving SSDI.

SSI vs SSDI

Even though both SSI and SSDI are managed and administered by the Social Security Administration but they are very different when it comes to their financial requirements. SSI has a financial “means” test and provides cash funds to the blind, disabled and elderly who meet the test. SSI is available to everyone regardless of finances if they meet the disability requirements and the previous work requirements.

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The difference between SSI and SSDI lies not only in the way it decides who receives benefits but also in where those funds come from. SSI is not an entitlement program. It is paid for out of the General Fund while SSDI is an entitlement program paid for out of the payroll taxes collected for Social Security.

Most people who receive SSI also receive Medicare services from their state. Medicare provides a full slate of health care services for them. On the other hand, those receiving SSDI are eligible to get Medicare two years after receiving Social Security Disability Insurance payments. Medicare does not cover as much as Medicaid does. In fact, Medicare has enough gaps that many people use Advantage Plans or a Medicare Supplemental Insurance Policy.

The other difference between the two is the amount of money one receives in benefits. In 2015 the average SSI payment was $773 while the average SSDI payment was $1,165 per month. This is because the income from SSI is based on a person’s financial situation and could be less than $773. The income from SSDI has nothing to do with one’s financial situation but is based on what the person earned over the last ten years. Some people receive both SSI and SSDI.

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So, there are several major differences between the two programs. SSDI vs SSI is really not a comparison at all. They just happen to both be administered by the Social Security Administration and both provide benefits to the disabled. SSDI requires that you have worked, and accumulated work credits and SSI recipients are low-income people who either don’t have enough work credits for SSDI or never worked at all.

Many people get confused about the two programs or think they are the same things. However, this information has made it clear that these are very different programs, with very different requirements for qualification and very different benefits.

What is the difference between Social Security and SSI?

There is also some confusion between Social Security and Supplemental Security Income. Many people are confused because the initials that are used for the programs are similar and because both programs are administered by the Social Security Administration. Both programs are paid from the U.S. Treasury Department, but they are not paid out of the same budget funds. Many people are confused about that as well. We now know that SSI is Supplemental Security Income and is a need-based program for the blind and disabled, while Social Security is a payroll tax based program, providing cash benefits to retirees and their dependents, based on the work history.

You can receive funds from both SSI and Social Security if you qualify for both. SSDI is a part of the Social Security System. Another difference between the two programs is that Social Security Benefits can be extended to dependents or spouses if the recipient dies. These benefits are almost automatically extended. If the recipient who dies gets a higher benefit from Social Security than the spouse, the spouse will receive the deceased benefits and give up their own.

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Children can receive Supplemental Security Income under certain circumstances as well. If the child is blind or disabled and the parents’ resources and income qualify, then the child is eligible for SSI. Children who qualify for SSA but don’t earn more than allowed by SSI may be eligible as well. But for the most part children and spouses do not keep SSI if it was designated for the deceased.

What IS the difference SSI and SSDI?

In review, there are several differences between SSI and SSDI.

Supplemental Security Income – SSI

  • Strictly a needs-based program based on the assets and income of the applicant.
  • Work history is not relevant in fact most people have worked very little or never at all.
  • Those who are eligible for SSI are also eligible for Medicaid.
  • Most will also be eligible for Food Stamps as well.
  • SSI benefits are paid on the first of the month.
  • SSI applicants are more likely to be women than men.
  • SSI is managed by the Social Security Administration but paid out of the General Fund, not the Social Security Trust Fund.

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Social Security Disability Insurance – SSDI

  • Based on medical/mental disability and work history. You must have a disability that is approved by SSA and that you will either not be able to work for 12 months or you are terminal.
  • Income is not a factor in SSDI eligibility. Work history in the last ten years is critical. Applicant must have enough work credits and half of them must have been in the last five years.
  • Those who are eligible for SSDI are automatically eligible for Medicare two years after starting SSDI. Most recipients either purchase “Gap Insurance” or a Medicare Advantage Program and Drug Program.
  • SSDI is paid depending upon your last name either early, middle or end of the month.
  • Approval rates are higher for SSDI than for SSI because applicants have higher incomes and long work histories.
  • More men than women are approved for SSDI.
  • SSDI is paid out of the Social Security Trust Fund that comes from the payroll taxes FICA that workers and employers pay for Social Security and Social Security Disability Insurance.

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1 thought on “What is the Difference Between SSDI and SSI?”

  1. Marco Antonio Garcia

    Extremely helpful page. Probably saved me 250 dollar bill from attorney. After reading the complete information provided, all my questions, and then some, were answered. Thx 🙂

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