The Differences Between Social Security Programs, Part 1
Social Security benefit programs are also known as entitlement programs. They collect money through payroll taxes, which is then put into federal trust funds. These funds are distributed to eligible retired workers, eligible disabled workers, and their beneficiaries. You qualify for these benefits based on either your own, your spouse’s, or your parent’s work history. The amount of the benefit is based on these earnings.
Social Security is a cash benefit program run by the federal government. The different programs under Social Security are:
- Social Security Retirement
- Social Security Disability (SSD)
- Supplemental Security Income (SSI)
Social Security Retirement benefits are what most people think of when they hear “Social Security.” To qualify for benefits, you must have paid into Social Security and meet the age requirements. If you were born between 1943 and 1954, you can begin receiving full benefits at age 66.
There are also survivor benefits. If you die and leave behind a spouse or minor children, they can qualify to get benefits under your Social Security account.
Survivor Benefits. Spouses of deceased workers are entitled to benefits as early as age 60, but do not receive two Social Security checks. Once widows or widowers reach retirement age, they will either receive a check based on their individual financial situation or the deceased party’s earnings record; they can elect to receive widow/widower benefits first, then switch to their own (higher) benefits when they reach full retirement age or beyond.
The rules for survivor benefits are highly individualized and complicated. Widows or widowers should talk to a caseworker to determine if and when it makes financial sense to take survivor benefits if they qualify, and to find out what the monthly benefit amount will be.
The main difference between Social Security Disability Income (SSDI) and Supplemental Security Income (SSI) is that SSDI is available to workers who have accumulated a sufficient number of work history credits and are blind or disabled. While SSDI is dependent on work history, SSI is based upon financial need. SSI is a cash assistance program available to individuals based upon financial need, who are aged, blind or disabled. The age requirement is over 65 or older. To qualify as blind or disabled, regardless of age, the blind or disabled person must meet the same requirements of the Social Security Act as those persons seeking SSD benefits.
SSDI benefits go to individuals who have worked in recent years (five out of the last ten years in most cases) and are now disabled. If you become disabled before reaching retirement age, and you have met the work requirements, you can receive disability benefits. These benefits will vary from person to person. To qualify for SSDI and Medicare benefits, the individual must satisfy the Social Security work history requirement and must also be deemed blind, or disabled within the definitions of the Social Security Act.
Disabled Widow’s or Widower’s Benefits (DWB) are paid to those who are at least 50 and become disabled within a certain amount of time after the death of their husband or wife. The late spouse must have worked enough time under Social Security to be insured.
Disabled Adult Child benefits (DAC) go to the children of people who are deceased or who are drawing Social Security disability or retirement benefits. The child must have become disabled before age 22.
SSI is a needs-based program for people with limited income and resources. Your benefit amount is based on federal and state laws. Your state may offer a supplementary payment. The program takes into account where you live, who lives with you, and what income you receive. It does not matter for SSI whether you have worked in the past or not. Additionally, if you receive SSI you must report changes both in your living arrangements and income.
Child’s Disability Benefits (CDB) are paid to children under the age of 17 and is another form of SSI. The Social Security Administration takes into consideration different factors when considering a child’s claim versus an adult’s claim. However, children who might qualify for CDB are those that have severe or limiting physical and mental conditions. There are also limitations when it comes to household incomes. Households that exceed a certain amount are excluded from consideration.
Learn more about the different Social Security programs in Part 2.
To learn more about whether you qualify for a Social Security program or to begin your estate planning process, please contact us at Aaron J. Goldberg, PLC.