How SSI and SSDI can impact estate planning
It is essential for you to understand the advantages and programs that you may be eligible for if you or your relative have a disability.
Finity Law firm helps individuals in estate planning who have concerns about SSI and SSDI requirements. These are typically factors that must be taken into consideration when someone wishes to provide for the special needs of a loved one.
For more information on how Supplemental Needs Trust a/k/a Special Needs Trust can be utilized to protect your or a loved one’s SSI and SSDI, click here.
SSI and SSDI give disabled people, who otherwise cannot be working gainfully, cash via monthly checks. Much uncertainty remains over the difference between the two programs which this article with highlight below:
What is SSI?
SSI is a direct payment program for people with disabilities who have been unable to work or can no longer work and contribute to the SSDI scheme. SSI is a benefit intended to fulfill the basic needs of people who do not have any other means of financial support.
You may be liable for SSI benefits if you: Meet the strict financial requirements; are under the retirement age of Social Security; and have not paid into the SSDI scheme by payroll deduction in the previous ten years.
SSI extends monthly coverage to those aged 65 or above, or to those with disabilities including blindness.
In many cases, there is an overlap between the SSI payments and the regular Social Security retirement or disability benefits that many people receive from the Social Security Administration. Still, those applicants who meet the eligibility requirements will theoretically get money from both schemes.
For exceptional cases, children under the age of 18 may be considered disabled and seek SSI coverage.
The condition may result in severe physical disabilities for a child to qualify and can be expected to cause death or have lasted or are expected to last longer than 12 months.
What is SSDI?
SSDI is a compensation program offered by the federal government to United States citizens who have already worked and paid taxes on social security. SSDI is granted to people who can not work because of a mental or physical disability.
In order to qualify for SSDI, there must also be a showing of an inability to work for at least one year beyond the previous work period.
SSDI can not be used to close an income gap due to temporary injuries as a short term benefit.
Similarities between SSI and SSDI
SSI and SSDI are both managed by the SSA and use the same means of determining if an individual is disabled. If a child has a medically determinable physical or mental disability that results in severe and significant functional impairments, and that has lasted for at least one year or leads to death, a child is considered disabled.
An adult shall be deemed to be disabled if he is not capable of significant job gain.
The difference between SSI AND SSDI
There is much ambiguity regarding the difference between the two programs Although both SSI and SSDI offer additional income for people with disabilities, and have similar names, they are entirely different programs
The significant differences between the two are:
- SSI is based on needs and based on the income and assets, whereas SSDI is not.
- SSDI applies to workers who have received a significant number of work credits, and SSI disability benefits are available to people with low incomes that either have never worked or have not obtained enough work credits to be eligible for SSDI.
- The beneficiary of an SSI will automatically qualify for Medicaid, whereas after 24 months of receiving disability payments, a person with SSDI will automatically be eligible for Medicare.
- The maximum monthly benefit of SSI is up to $1103, while for SSDI, it is up to $2687.
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