You hear various different acronyms when you are looking into government programs, and it can sometimes be confusing, especially when they are similar. In an effort to clear things up, we will look at the difference between SSI and SSDI in this blog post.
Social Security Disability Insurance (SSDI)
People with disabilities are often incapable of earning much income, but they have needs like the rest of us. The government accounts for this through the implementation of programs that provide income for disabled individuals who cannot earn much money.
When you work and pay your taxes, you are paying into the Social Security program. The program is for the most part intended to provide income for senior citizens.
While you are working, you are earning retirement credits. In 2015, you earn one credit for every $1220 that you earn. When you earn 40 credits, you will qualify for Social Security when you reach the eligibility age.
People who pay into the Social Security program may also qualify for Social Security Disability Insurance (SSDI) benefits if they become unable to earn much income because of a disability. The required work credit accrual would depend upon the age of the applicant.
There is no asset limit when it comes to SSDI, because the eligibility was earned through the accrual of work credits, but there is an income limit of $1,090 per month in 2015.
Supplemental Security Income (SSI)
The acronym SSI stands for Supplemental Security Income. Disabled people who have very limited financial resources may be able to qualify for SSI.
Eligibility has nothing to do with the accumulation of work credits. Even if you never worked, you may be able to qualify.
Because of the fact that this is a need-based program, there are income and asset limits. For an individual, the asset limit is just $2000.
Special Needs Trusts
Since there is a Supplemental Security Income asset limit, a change in financial status could render a benefit recipient ineligible. As a result, if you wanted to give a gift or inheritance to someone who is enrolled in the SSI program, you would want to take this into account.
People who are in this situation often create special needs trusts. The way that it works is you fund the trust, and the trustee can use assets in the trust to pay for things that SSI does not cover. As long as the trust is administered in accordance with program regulations, benefit eligibility would not be lost.
Special Needs Planning Consultation
If you have questions about special needs planning and these rather complex government programs, we can provide you with answers.
Our firm offers Special Needs Trusts consultations, and we would be glad to assist you. To set up an appointment, send us a message through our contact page: Sacramento CA Special Needs Planning.
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