Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): An Overview

Summary

The Social Security Administration (SSA) is responsible for administering two federal entitlement programs established under the Social Security Act that provide income support to individuals with severe, long-term disabilities: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI is a social insurance program established under Title II of the act that provides monthly cash benefits to nonelderly workers with disabilities and to their eligible dependents, provided the worker paid Social Security taxes for a sufficient number of years in jobs covered by Social Security. In contrast, SSI is a public assistance program that provides monthly cash benefits to seniors and individuals with disabilities (adults and children) who have limited assets and little or no Social Security or other income. In 2016, SSDI and SSI combined paid an estimated $199 billion in federally administered benefits to 14.6 million qualified disabled individuals and 1.6 million non-disabled dependents of disabled workers.

SSDI is part of the federal Old-Age, Survivors, and Disability Insurance (OASDI) program, commonly known as Social Security. OASDI benefits are based on an insured worker’s career-average earnings in jobs covered by Social Security and designed to replace a portion of the income lost to a family due to the worker’s retirement, disability, or death. Workers become insured against these events by acquiring a certain number of earnings credits during their careers in covered employment or self-employment. The SSDI component of the program provides benefits to disabled workers who are under Social Security’s full retirement age and to their eligible spouses and children. The Old-Age and Survivors Insurance (OASI) component also provides disability benefits to eligible disabled dependents of retired workers and to eligible disabled survivors of deceased beneficiaries and insured workers. Although these individuals are not technically disability insurance beneficiaries, they are often included in the term SSDI because they receive Social Security benefits due to a qualifying impairment.

SSI is a federal assistance program that provides needy aged, blind, or disabled individuals (including children) with a guaranteed minimum income to meet their basic living expenses. Although there are no work or contribution requirements to qualify for benefits, the program is based on need and therefore is restricted to individuals with limited financial means. SSI is commonly known as a program of “last resort” because claimants must first apply for all other benefits for which they may be eligible; cash assistance is awarded only to those whose assets and other income (if any) are within prescribed limits. The basic federal SSI benefit is the same for all recipients and is reduced by the amount of other income that an individual receives.

SSDI and SSI are open-ended entitlement programs, meaning that the federal government is obligated to pay benefits to individuals who meet the eligibility requirements specified in each program’s authorizing statute. SSDI benefits are paid from the Disability Insurance trust fund, which is financed primarily by a portion of the Social Security payroll tax levied on the earnings of covered workers. SSI, in contrast, is financed by appropriations from general revenues.

Most claimants are considered disabled for SSDI and SSI eligibility purposes if they are unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that is expected to last for at least 12 months or to result in death. In 2017, the SGA earnings limit is $1,170 per month for most individuals. Claimants generally qualify if they have an impairment (or combination of impairments) of such severity that they are unable to perform any kind of substantial work that exists in significant numbers in the national economy, taking into consideration their age, education, and work experience. If a claimant’s application for benefits is denied at any point during the disability determination process, the claimant has the right to appeal the decision.