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Tuesday, December 6, 2016

Q: I read your article explaining that SSI is not a Social Security benefit and is not paid for out of Social Security taxes. But I’m still confused. What is the difference between Social Security disability and SSI disability? And how are they different from regular Social Security?

A. I’m always puzzled when people differentiate between Social Security disability benefits and “regular Social Security.” Does that mean that the Social Security disability program is some kind of “irregular” benefit? The answer to that question is “no.” Social Security disability is a regular Social Security benefit, just like the retirement program. So, now let me clarify the difference between Social Security and Supplemental Security Income, or SSI.

First, let’s discuss Social Security. Most people in this country understand how it works. You have a job, you pay taxes, and that’s what qualifies you for monthly benefits.

There are basically three parts to the Social Security program: retirement benefits, disability benefits, and survivor benefits. You get Social Security retirement benefits once you are 62 or older. Your family (usually a spouse and minor children) get Social Security survivor benefits if you die. And you get Social Security disability benefits if you become disabled before reaching retirement age.

So, the Social Security disability program is just one kind of Social Security benefit. People who get Social Security disability benefits have worked and paid taxes. They just didn’t stay healthy enough to make it to retirement age. In effect, a Social Security disability benefit is like “disability retirement.”

And then there is Supplemental Security Income, or SSI. SSI is a federal welfare program run by the Social Security Administration but NOT paid for out of Social Security taxes. There are two ways you can get SSI. You qualify for monthly SSI payments either because you are old (over 65) and poor; or if you are under 65 but disabled and poor. In other words, there are SSI benefits for the aged, and SSI benefits for the disabled. Unlike Social Security, there is no requirement to work and pay taxes to qualify for SSI. SSI is what it is — a welfare program.

So, to repeat: you get Social Security disability, which is a “regular” Social Security benefit, if you have worked and paid taxes, and become disabled before being old enough to get Social Security retirement benefits. And you get SSI disability benefits if you are poor and become disabled.

Here’s another way to look at it. If Bill Gates became disabled tomorrow, he would qualify for Social Security disability benefits because he’s worked and paid taxes. But he would never ever be eligible for SSI because he certainly isn’t poor.

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