DIFFERENCE BETWEEN SSDI AND SSI

SSDI stands for "Social Security Disability Insurance"

SSI stands for "Supplemental Security Income," a fancy name for welfare.

 The main difference between Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) is that SSI is an entitlement program with no work-related requirements, whereas SSDI is an earned benefit that has work requirements to qualify. Both programs pay monthly benefits to people with disabilities.

You pay into SSDI out of every paycheck.  The deduction appears on your payroll stub as "FICA," Federal Insurance Contribution Act.  It's a New Deal law passed in the 1930s to force workers to set aside some money to cover a period of disability.  The current FICA tax is 7.65 percent of gross earnings.  Your employer matches and pays an additional 7.65 percent.  If you are self-employed you get stuck paying the entire amount on your own.

When you have worked enough "quarters" (3 month periods), and paid enough FICA, you have Social Security Disability Insurance or SSDI.  If you become disabled afterwards you might get a benefit IF you can convince Social Security that you meet their severe, very narrow definition of "disabled."  Most claims are denied.  Social Security loves to take your money; they hate giving you money.

Now let's talk about a different animal called SSI.

You do not pay into Supplemental Security Income or SSI.  It is the way the states and the federal government manage what used to be called welfare.  You don't have to work to qualify for SSI.  The 3 requirements are:

1.  You must age 65 or over OR you must be disabled.

2.  You must have less than $2,000 in "wealth" or "resources."

3.   You must have very, very low household income.

Both SSDI and SSI are processed by your local Social Security office.  You apply for both through the Social Security office.  Your check comes through Social Security. That leads many people to confuse the two programs or to think they are the same thing.  They are not. SSDI and SSI are very different programs which bear few similarities except they both get processed by the Social Security Administration.

I might add that the average SSDI benefit in Alabama is around $1,400 per month.  The average SSI benefit is around $457 per month. 

So why would anyone apply for SSI?  They would apply if they don't have the work credits or FICA contributions to be eligible for SSDI.

I think of SSDI this way:  It's insurance.  If you've paid your premiums (FICA) you are covered.  If you haven't paid, you're not covered.