Social Security and Supplemental Security Income (SSI) are commonly confused. Either people think they are the same thing or they do not know what makes them different. Social Security and SSI are, in fact, different programs. Both programs are, however, administered by the Social Security Administration (SSA). Here, we will go further into what distinguishes these two programs.
What is the Difference Between Social Security and SSI?
In the most basic sense, Social Security benefit programs are referred to as “entitlement programs.” Workers of all sorts, whether a person has been self-employed or worked for an employer, pay for these benefits when they pay in with their Social Security taxes. These Social Security taxes are collected and kept in special trust funds. Then, the intention is that workers eventually qualify for Social Security benefits paid out of these trust funds based on work history. The benefit amount a person receives under the Social Security program will depend on the number of earnings paid into the trust fund over time.
In the alternative, SSI is not an “entitlement program,” but is instead considered to be a needs-based program for individuals with access to limited income streams and resources. Resources refer to assets owned by a person. The SSI program is supported by general tax revenues as opposed to Social Security trust funds. The amount that will be paid out by SSI is prescribed by Federal and State law. The amount will take into account where a person lives, as well as who lives with him or her and the income he or she receives.
In other words, Social Security benefits are based on earnings whereas SSI benefits are based on need. Social Security is funded by employer and wage contributions while SSI is financed by general revenues. Social Security has no income or resource limits and SSI, because it is needs-based, has limits on the amount of income and assets a person can have, and still receive benefits under the program. Social Security, however, requires that a person has earned enough work credits to participate in the program whereas SSI has no work credits requirement.
Social Security has several types of benefits offered. It offers retirement benefits to those aged 62 or older, as well as survivor and disability benefits. Social Security will also provide benefits to eligible family members. The benefits amount is, again, based on average lifetime earnings. SSI, on the other hand, includes providing benefits to those aged 65 or older, as well as benefits based on disability or blindness at any age. SSI does not provide family benefits and the benefit amount will be based on Federal and state laws.
Other streams of income will not impact the benefits you are eligible to receive under Social Security nor will where you live or who you live with. SSI eligibility will be impacted by streams of income. It will also be impacted by where you live or who lives with you. You are obligated to report any streams of income as well as any changes in where you live or who lives with you for SSI purposes. It is also important to note that some people receive both SSI and Social Security benefits. This means that eligibility in one program does not work to necessarily exclude you from eligibility for the other one.
Programs administered by the Social Security Administration are important to many but can be very complicated to understand. Disability Advocates Group is here to offer you guidance and counsel on these programs. Contact us today.