Caregivers often bear the brunt of financial costs when caring for a family member. However, you can improve your financial situation by applying for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). Though both take time to qualify, the added assistance will ease your caregiving burden and provide your loved one with a much better quality of life overall.
The federal government provides helpful programs that provide economic aid to low-income and disabled adults. Caregivers can help their loved ones apply for these programs to pay for necessities and improve health outcomes.
Supplemental Security Income (SSI) provides monetary assistance to low-income individuals who are blind, age 65, or disabled. The program is need-based, meaning the Social Security Administration considers income, living arrangements, and assets when deciding eligibility.
SSDI provides economic support to care recipients with disabilities who have a long work history and paid Social Security taxes through payroll deductions. SSDI is an "earned benefit" based on past contributions.
SSI and SSDI are not automatically awarded. Those who are interested need to apply for the program and meet set qualifications:
SSI is funded from general tax revenues and helps those with little or no income, while payroll taxes fund SSDI support and help people who have become disabled and unable to work after contributing support to the system.
SSI is a needs-based program that depends not on the recipient's work history but on their current income and assets. Conversely, SSDI eligibility is based on the recipient's work history and past contributions to Social Security through payroll taxes, without considering their current income and assets.
Both programs need medical proof to confirm the disability is severe enough to prevent your loved one from working. The application process involves a medical exam to evaluate your loved one's condition and the impact on their ability to work.
For SSDI, having a sufficient work history and recent work credits is crucial. The SSA considers the number of work credits earned, age at disability onset, and type of work performed. The number of required work credits varies by age, with younger workers needing fewer credits than older workers to qualify based on their work history.
SSDI benefits are typically higher than SSI benefits because they're based on your care recipient's past earnings.
Differences in approval rates between SSI and SSDI can be significant and vary widely by state and year.
Historically, the initial approval rate for SSDI applications tends to be lower, typically between 30% and 40%, reflecting the program's stringent eligibility criteria based on disability and work credits.
In contrast, SSI may have higher approval rates, ranging from 50% to 70%, due to its focus on financial need.
However, these figures can fluctuate, and we recommend that you consult recent statistics from the Social Security Administration for the most current information.
Both programs offer monthly benefits to help with living expenses. SSDI benefits are typically higher than SSI.
SSI recipients are automatically eligible for Medicaid in most states, which helps cover medical costs, though a few states require a separate application for Medicaid. SSDI recipients qualify for Medicare after a two-year waiting period that starts from the date of eligibility for SSDI, not from the application or approval date.
SSI has strict income and resource limits designed to help individuals with little or no income and assets. On the other hand, SSDI focuses on work history and does not impose limits on assets.
An adult child who becomes disabled before the age of 22 may be qualified for benefits on a parent's Social Security earnings record, even if the child hasn't worked. This is called a "child's" benefit.
The application process for both SSI and the application process for SSDI are essentially the same. Family caregivers can apply online, by phone, or at your local SSA office on behalf of their care recipient. Caregivers should gather necessary documentation, such as medical records and employment history, beforehand.
The process includes the following steps:
Navigating the application and appeals process for SSI and SSDI can be challenging. While disability attorneys provide valuable expertise, particularly during appeals, many non-profit organizations and advocacy groups also offer assistance. These groups often provide free or low-cost services to help individuals understand program requirements, complete applications, and navigate the appeals process if necessary.
You can explore the following resources for support:
There are a few financial things to remember when it comes to benefits. Receiving SSI or SSDI might affect other income your loved one gets. It's essential to check with the SSA or a benefits counselor to see how things might change. Depending on the situation, benefits may or may not be taxed.
Social Security Disability Insurance (SSDI) benefits may be subject to federal income taxes depending on the recipient's total income and filing status. If the individual has other significant income (such as earnings from a spouse or other household income), part of the SSDI benefits may be taxable. The general rule is that if one-half of the SSDI benefits and all other income is greater than a base amount, up to 50% of the SSDI benefits may be taxable. If these income levels are substantially exceeded, up to 85% of benefits may be taxable.
Supplemental Security Income (SSI) benefits, on the other hand, are not taxable. SSI is a needs-based program intended to help individuals with very low income and few resources. The benefits are funded by general tax revenues, not Social Security taxes. Because SSI is aimed at supporting those in financial need, the benefits are structured not to be included in taxable income.
Consulting with a tax advisor can help you understand the specific tax implications.
Finally, for adults with disabilities receiving SSDI, those benefits count towards their future retirement income from Social Security. This is good news for long-term planning.
Navigating disability benefits can be pretty challenging, but you're not alone. The Social Security Administration provides resources to assist family caregivers in applying. Find the best program for your loved one's needs so they receive the financial support they're entitled to.
