This question was asked by a concerned father on a Facebook group that I follow:
“What is the difference between SSI and SSDI? My son is disabled and currently receives SSI, but I have been asked by several others why he doesn’t get SSDI and that he should be getting SSDI instead of SSI. I struggled with the social security office years ago and am not familiar with applying for the right benefits for my son.”
I think this is a good question because I think that you can’t effectively advocate for your special needs child until you know and understand all the various benefit programs that he/she qualifies for.
Since misinformation is as bad as no information, I will share what I have learned in the past 16 years as a Special Care Planner about SSI and how it works. I will refer to the POMS or Program Operations Manual System. This is a primary source of information used by Social Security employees to process claims for Social Security benefits. You can also refer to the Social Security Handbook which is written in plain language for use by the public. I will only address SSDI from the standpoint of a child with a disability that occurred prior to age 24. This will include most individuals with special needs.
What is SSDI?
Social Security Disability Insurance or SSDI pays monthly benefits to workers who are no longer able to work due to a significant illness or impairment that is expected to last at least a year or to result in death within a year. It is part of the Social Security program that also pays retirement benefits to most older Americans. Benefits are based on the disabled worker’s past earnings and are paid to the disabled worker and to his or her dependent family members.
How do you qualify for SSDI?
To qualify for Social Security Disability Insurance (SSDI) benefits, you must:
- Have a medical condition that meets Social Security’s strict definition of disability.
- Have worked in jobs covered by Social Security.
In general, monthly benefits are paid to people who are unable to work for a year or more because of a disability. Benefits usually continue until you can work again on a regular basis. There are also several special rules, called work incentives, that provide continued benefits and health care coverage to help you make the transition back to work.
Definition of Disability
An individual must not be able to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment(s) that is either:
- Expected to result in death.
- Has lasted or is expected to last for a continuous period of at least 12 months.
You can find more information about what is meant by Substantial Gainful activity (SGA) at www.ssa.gov.
NOTE: This is the same definition of disability used for Supplemental Security Income (SSI) for an individual over 18 years old.
Work Credits
How credits are earned
The following is information found at www.ssa.gov.
Since 1978, you can earn up to a maximum of four credits per year.
Credits are based on your total wages and self-employment income for the year. You might work all year to earn four credits, or you might earn enough for all four in much less time.
The amount of earnings it takes to earn a credit may change each year. In 2022, you earn one Social Security credit for every $1,510 in covered earnings each year. You must earn $6,040 to get the maximum four credits for the year.
Number of credits needed for disability benefits
To be eligible for disability benefits, you must meet a recent work test and a duration work test.
The number of credits necessary to meet the recent work test depends on your age. The rules are as follows:
- Before age 24 – You qualify if you have 6 credits earned in the 3-year period ending when your disability starts.
To meet the duration of work test:
- If you develop a disability before age 28, you will generally need 1.5 years of work
What does this mean for my son/daughter with special needs?
If your son/daughter receives SSI after age 18, he/she will meet the Social Security definition of disability. They then must meet the recent work test and the duration of work test. If they can work for 18 months and earn at least $6,040 annually which will result in 6 work credits, they will qualify for SSDI on their own Social Security record.
Are there other circumstances when children receive SSDI?
Children may receive a benefit from Social Security if their parent, stepparent, grandparent, or whoever claims them as a dependent is receiving a Social Security benefit from retirement or disability. A child under age 18 may have a disability, but Social Security doesn’t need to consider the child’s disability when deciding if he/she qualifies for benefits as a dependent. The child benefits normally stop at age 18 unless they are a full-time student in an elementary or high school (benefits can continue until age 19) or have a qualifying disability.
Children who are receiving benefits as a minor child on a parent’s Social Security record may be eligible to continue receiving benefits on that parent’s records upon reaching age 18 if they have a qualifying disability.
How does SSDI affect SSI payments?
You might be concerned about how the SSDI benefits will affect your child’s SSI payments. SSDI payments are considered income regarding SSI calculations. You will need to decide which scenario best meets your needs and situation. Here is something to consider:
- Child continues to receive SSI and Medicaid only.
- Child has a job and earns a small amount of income; SSI may be reduced as a result. Will the total amount of money received be more or less than in option 1 (income + reduced SSI)?
- Child has a job and earns a small amount of income. He/she has worked long enough (18 months) to earn enough work credits to qualify and receives SSDI. He/she may earn too much in earnings and SSDI which causes SSI payments to stop but Medicaid to continue.
Primary Question for Special Needs Families
If your child is working at a job, earning wages, receiving SSDI and the total exceeds the amount allowed for SSI, but he/she still qualifies for Medicaid, how important is the SSI payment? If they can earn more money elsewhere, should we worry about SSI?
Considerations:
1. Will an inheritance affect my child's SSDI benefit?
Since Social Security Disability Insurance (SSDI) is not a means-tested benefit like SSI, an inheritance or other assets will not affect your child’s benefit. It is based on their work record.
2. Do I need a special needs trust to protect their SSDI?
Again, since SSDI is not a means-tested benefit, a special needs trust will not affect the SSDI either positively or negatively. However, since Medicaid is a mean-tested benefit, most of our special needs children should have a special needs trust.
3. What is the application process like?
The application process for SSDI is the same as the application process for SSI at age 18. In fact, when you apply for SSI, one of the first things that the Social Security Administration does is see if your child qualifies for SSDI. Since they don’t have work record yet, they always send a letter telling you that they don’t qualify. Many families mistakenly conclude that their child doesn’t qualify for SSI and became quickly enraged at the “system”. Please understand that the easiest determination to make is whether your child has enough work credits. If not, you will receive the non-qualification letter. This has no bearing on the SSI determination.
In Conclusion:
Children under the age of 18 cannot received SSDI payments. Your child may receive dependent benefit payments on your work record if you are disabled, retired or upon your death. Otherwise, if someone tells you that your child should be receiving SSDI instead of SSI, they may be or are likely misguided and wrong.
Not affiliated with or endorsed by the Social Security Administration, the Centers for Medicare and Medicaid Services, or any government agency.
Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice.