by V. Kumar

Created on: September 14, 2008

A common question that faces every disabled person while planning about their financial future is as to whether their Social Security disability benefits would be adversely affected because of the different payments.

I. DISABILITY BENEFITS UNDER SSDI

The SOCIAL SECURITY DISABILITY BENEFITS consists of two major benefits - the SOCIAL SECURITY DISABLITY INSURANCE or SSDI, and SUPPLEMENTAL SECURITY INCOME or SSI. They are provided selectively depending upon the fulfilment of eligibility criteria.

SOCIAL SECURITY DISABILITY INSURANCE (SSDI) is a payroll funded insurance scheme administered by the Social Security Administration as per the mandate provided to it by the US Government. The aim of the program is to provide income during the period of disability that prevents the person from working, and guarantee an income for those who are unable to work again.

The eligibility criteria of SSDI do not include any criteria pertaining to income. It is also not affected by any other Disability Insurance payments. Hence the different kind of earned and unearned incomes do not adversely affect the Social Security disability benefits. Notably, SSDI is an insurance program funded by the Social Security Trust Fund.

II. SUPPLEMENTAL SECURITY INCOME (SSI) & ELIGIBILITY

Supplemental Security Income is an additional benefit that also requires the same disability criteria as in the SSDI. However, unlike SSDI, the SSI is a Government welfare program, funded directly by the Treasury funds. Hence benefits under the Supplemental Security Income program requires means testing based upon the net income and wealth of the beneficiary, which must be below a prescribed limit for this purpose, indicating need for additional support. The criteria for children with disability are different for grant of SSI.

For the purpose of means testing for SSI, INCOME is defined as earned and unearned money that you receive, such as wages, pensions, and social security checks. It can also include non-monetary items such as food, clothing and shelter (unless given to you by a non-profit organization such as a food pantry, church, or a homeless shelter).

However, Social Security does not count all of your income. The following are excluded:

- Food stamps
- The first $20.00 of income received every month
- The first $65.00 of wages earned every month
- Half the earnings over the $65.00 earned every month
- Student wages and scholarships
- Wages used to purchase disability-related items or services needed for work
- Wages used to pay for the work-related expenses of an individual who is blind

Thus all unearned income including wages, pension, other social security benefits - all make a difference to the Social Security Disability benefits. In case of wages, the first $ 65 and the half of the remaining wages are not taken into account for reducing the SSI benefits.

III. OTHER BENEFITS

There are certain other benefits that are also dependent upon the grant of main benefits like SSDI.

- Irrespective of age, persons receiving SSDI for over 24 months become eligible for MEDICARE benefits, including Part A (hospital benefits), Part B (medical benefits), and Park D (drug benefits).

- A person receiving SSDI benefits also becomes eligible for receiving the COBRA benefits after 18 to 29 months.

- A dependent of a person receiving SSDI may also be eligible for the disability benefits.

- The retirement benefits of a person eligible for disability benefits may be higher because of the freezing of the accounts during the period of disability.

Even when a person is ineligible to receive SSI payments because of her income being higher, the persons are still eligible for receiving MEDICAID under the 1619 PROVISION.

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