What Are SSI and SSDI?
Both Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) are federal programs run by the Social Security Administration. Neither is part of the Social Security fund everyone knows about that sends checks each month to those who have reached the age of 62 or older.
SSI is intended to help those who have financial need. That could be a minor child whose parents have died and who does not have her own assets to pay her living expenses. The recipient does not have to have ever worked. The asset limit is $2,000 and in general monthly earnings must be below $1,220 per month, so this program is truly for those without assets of their own. This can create a problem if a relative dies and leaves money for the benefit of that child, putting the child’s assets over the $2,000 limit. In order to preserve the eligibility for SSI, any money that is to be given or inherited should be put into a special needs trust that limits the availability of the funds in keeping with the SSI rules. A person on SSI will be able to qualify for Medicaid to pay for medical expenses.
Social Security Disability Insurance is a program for people who have worked and paid into the Social Security System through the deductions from their pay checks. Applicants must apply, show they are disabled and cannot work and must be under the age of 65. An applicant’s age affects eligibility, because someone under the age 24 has to have worked at least one and a half years, after turning 21. Applicants between the ages of 24 and 31 must have worked half the time since they turned 21, and applicants 31 and older must have worked 5 out of 10 years before they became disabled. In addition. An applicant who is 42 or older has to add three months of work per year to satisfy a “duration of work”
Those time requirements, however, are not as complicated as they seem, because Social Security calculates the time based or how much money is earned during each calendar year. In 2018, a worker was considered to have worked a full quarter for each $1,180 earned, so a person who earned $4,720 would have earned enough to be considered to have worked a full year, even if all that money was earned in just one month.
SSDI does not require that a person’s assets be below a specified amount, and after two years on SSDI, an applicant could qualify for Medicare to pay for medical services. That means a person on SSDI can own a house, a car, have a bank account and still receive a disability check each month. Here is the catch, however. If the disabled person’s condition is so poor that long term care is needed, Medicare does not pay for long term custodial care. For that Medicaid is needed and in Connecticut Medicaid will not pay for long term care, either in a nursing home or at home, if the applicant’s assets exceed $1,600. The home and car are excluded if at home, but investments and bank accounts are included. That brings us back to the need for a special needs trust to hold the investment assets if it is likely or possible that Medicaid (Title 19) will be needed for long term care.
We Can Help Navigate SSI and SSDI
These rules can be difficult to understand, and special needs trusts must meet stringent requirements, so if you or a family member are disabled and cannot work, consult with someone who knows the rules. This applies to the parents of grown children who have become disabled, because if the parent dies and leaves money directly to a disabled adult child, who could be in his 50’s or 60’s or even older, then that inherited money will not only knock the adult child off Medicaid, but the state may be able to claim reimbursement for the money it paid out through Medicaid for long term care. Plan wisely so your loved one can get and keep the help they need.