Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are both federal programs that provide cash payments to people who meet the federal definition of "disabled", but the similarities between the two programs end there. Here are the three main differences between them.
SSI Is a Means-Tested Program, SSDI Is an Entitlement Program
Although both SSI and SSDI are administered by the Social Security Administration, the two programs have vastly different financial requirements. SSI is designed to meet the basic needs of elderly, blind, and disabled individuals who would otherwise have a hard time paying for food and shelter. Since SSI is narrowly tailored for this particular set of people, it has a very strict set of financial requirements, making it what is known as a "means-tested" benefit.
SSDI, by contrast, is an entitlement program that is typically available to any person who has paid into the Social Security system for at least ten years, regardless of his current income and assets. Younger beneficiaries and disabled adult children of retired or deceased workers may have to meet different requirements. In theory, all qualified workers are potential SSDI recipients, even high-income earners.
SSI Beneficiaries Typically Receive Medicaid, SSDI Provides Access to Medicare
In most cases, a person who receives SSI immediately qualifies for Medicaid benefits. Medicaid is a joint state and federal health care program that typically provides very comprehensive coverage for its beneficiaries, therefore, many people may apply for SSI primarily because of the health care that comes with it.
On the other hand, SSDI beneficiaries are eligible to receive Medicare two years after they are deemed eligible for SSDI benefits. Medicare is a federal health insurance program that covers routine hospital services and most, but not all, primary medical care. Medicare is not as comprehensive as Medicaid, and many Medicare beneficiaries purchase what are known as private "Medigap" policies to fill in the holes in their primary Medicare coverage.
The Financial Benefits Can Be Very Different
Finally, SSI and SSDI benefits vary widely when it comes to the amount of money provided. In 2020, the federal SSI payment standard will be $783 per month for an individual (with most states adding a small supplementary payment), while the average SSDI payment will be $1,258 a month. Since SSDI is based on the beneficiary's earnings record, some SSDI recipients can receive much more than this. In addition, SSI benefits are reduced by any other income received by an SSI beneficiary, so many SSI recipients will receive less than the $783 payment standard. In most cases, if a person receives an SSDI benefit that is higher than the maximum SSI payment, she won't be eligible for SSI at all.