The answer to this question starts with an understanding that there are two types of disability programs administered by the Social Security Administration: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). For both programs, you have to be disabled. The process to determine whether someone is disabled is the same for SSDI and SSI. Although the medical requirements are the same for both programs, the technical qualifications are vastly different. As its name implies, SSDI is an insurance program. So long as you are unable to engage in substantial gainful activity, you will qualify for SSDI if you have earned the appropriate work credits. Owning real estate alone should never disqualify someone from qualifying for SSDI. However, if you do not have the work credits that we’ve discussed in other articles, SSI is your only option available outside of private long-term disability insurance. This article discusses the technical of SSI form the perspective of a disability lawyer in Florida.
For an individual to receive SSI payments, he or she must prove that their economic resources do not exceed $2,000 per month. For couples this figure is $3,000 per month. Resources are the cash and property that an individual owns and holds the power to liquidate and that can be used in any capacity that the claimant sees fit. There are limits on how much and which property the SSA can account for when trying to determine your SSI benefits. It is also important to know even the most insignificant details can ultimately keep you from attaining your full SSI benefits. For instance, if you receive a house or a condo from a relative or close friend, on the first of the month Social Security will cut back on your benefits because this new asset (the house) is viewed as income, or as “in-kind support and maintenance.” In this case, your SSI benefits could be depleted up to one-third of full benefits for the month that the deed was transferred to your name. However, in the next month, if you are indeed using the house as a primary residence, it will no longer be seen as income and cannot be used to determine your benefits for that particular month. Conversely, if this house or condo is not being used as your primary residence, you risk losing your benefits. If, as an individual or a couple, your monetary and/or property resources exceed the statutory limit: $2,000/month ($3,000/month) for a twelve-(12) month period, you will have to file a new claim for SSI to become eligible again. This twelve-(12) month period is known as a “suspension period.”
Other property that is excluded from SSI determination, but subject to exceptions include:
- Household goods and personal effects such as home appliances/furniture and items of a religious, cultural, or familial significance are exempt, household or personal items that are acquired and held as investment are counted as resources according to SSI
- Life insurance policies that do not have value are exempt (this includes term policies); however, whole life and universal variable life insurance that acquire value with each premium payment are counted when determining benefits, but only if the value of the policy exceeds $1,500
- Life insurance policies signed over to a funeral director to make funeral arrangements are exempt if the funds used to do so are irrevocable, meaning the claimant cannot use these funds for another purpose
- If they are revocable, the SSA will count these funds as a resource
- Homes and land property are exempt from SSI determination unless they are utilized as a source of income or if they are not the claimant’s primary residence as of the first date of the month
- Only one automobile that is used to transport the SSI recipient or members of his or her family is exempt from the determination process; if the recipient owns two automobiles, the one with the higher market value is exempt, but the other vehicle is counted
- Burial funds of up to $1,500 per family member, as well as any interest accrued while deposited in a bank account, are exempt from determination; however, once this money has been set aside in a separate bank account from which SSI benefits are deposited, it cannot be used for any other purpose; a penalty is incurred in the form of withheld benefits from the SSA if these funds are withdrawn
- Burial plots, urns, crypts, and caskets are exempt from determination unless the claimant owns multiples, in which case, only one item is excluded
- Back-payment of social security benefits (non-SSI) are considered income upon receipt, if these retroactive benefits are not spent by the next month, they will not be counted as a resource for nine months
- Liquid retirement funds, or funds that can be withdrawn for use with ease, can be counted as resources for SSI determination purposes; if the retirement funds are not liquid—or for example, a claimant would need to terminate their employment to receive the funds—they are not considered resources under SSI
- Educational grants, scholarships, fellowships, and other monetary gifts utilized for educational advancement are exempt from determination; however, these funds must be used for tuition or other educational expenses within nine months of receipt
- Individual Development Accounts (IDAs) part of the Federal Assistance for Needy Families (TANF) program or Federal Assets for Independence (AFI) are exempt from SSI determination procedure; IDA accounts not a part of these programs are counted as resources (with the exception of those participating in special demonstration programs)
I had a friend who is a Tallahassee lawyer ask me recently about the difference between these two programs. It made me think if attorneys in Tallahassee don’t understand the difference between SSDI and SSI, there are likely others who can benefit from understanding the difference. With that in mind, I am going to be writing a series of articles to explain the various differences between the programs. Look for these in the weeks to come.