Are Social Security and SSDI the Same Thing?




  • In Business
  • 2022-05-11 11:30:14Z
  • By GOBankingRates
btrenkel / iStock.
btrenkel / iStock.  

The Social Security and Social Security Disability Insurance (SSDI) programs are both managed by the Social Security Administration (SSA) and provide benefits to those who are unable to work, but each program has a different purpose and unique eligibility requirements.

Discover: 25 Things To Sell When You're Ready To Retire
More: 15 Worst States To Live on Just a Social Security Check

Social Security benefits replace a percentage of a worker's income based on lifetime earnings. It also provides survivor benefits and income for those who become disabled. A person's Social Security retirement benefit amount depends on lifetime earnings and when they choose to start receiving benefits. Benefits are financed through a dedicated payroll tax. Employers and employees each pay half while self-employed workers pay the entire 12.4%.

SSDI is also earned based on work earnings and funded through payroll taxes, but with the sole purpose of providing benefits to those who can no longer work due to a severe disability (and to their dependents). To qualify for SSDI, the SSA says that you must meet the definition of disability under the Social Security Act.

A person is considered disabled if they can't work due to a severe medical condition that has lasted (or is expected to last) at least one year or result in death. The condition must also prevent them from doing work they did in the past, or from adjusting to new work. According to the SSA, SSDI recipients are typically among the most severely impaired in the country.

See: POLL: Do You Think the Fed Raising Rates Will Help or Hurt the Economy?
Find: 10 Dollar Store Items That Aren't Even Worth the Buck

Similarly to Social Security benefits, SSDI only covers a portion of your income. Benefits barely keep beneficiaries above the federal poverty level. The SSA says that for most SSDI beneficiaries, monthly disability payments represent a majority of their income but can still make a big difference in terms of allowing beneficiaries to meet their most basic needs.

  • Here's How Much Cash You Need Stashed if a National Emergency Happens

  • Women & Money: The Complete Guide

  • 4 Easy Ways To Avoid Wasting Money During Retirement

  • The Top Purchases You Should Always Make With a Credit Card

This article originally appeared on GOBankingRates.com: Are Social Security and SSDI the Same Thing?

COMMENTS

More Related News

30 Reasons It
30 Reasons It's Hard To Retire at 65

Sixty-five has long been the magic age for retirement. But the expected age of retirement is becoming more diverse for the majority of non-retired U.S...

13 Best Places on the West Coast for Couples To Live on Only a Social Security Check
13 Best Places on the West Coast for Couples To Live on Only a Social Security Check

As of March, the average monthly Social Security benefit is $1,618.29 for an individual, according to the Social Security Administration (SSA). Doubling up...

11 Social Security Mistakes That Can Cost You a Fortune
11 Social Security Mistakes That Can Cost You a Fortune

If you want to retire comfortably, then you need to start planning now. By understanding how to maximize your Social Security benefits, you won't have to...

31 Surprising Facts About Retiring You Probably Didn
31 Surprising Facts About Retiring You Probably Didn't Know

It's never too early to start thinking about how you want to spend your time -- and your money -- in retirement. No matter if you're hoping to retire as...

When Supplemental Security Income (SSI) Payments Will Arrive in June 2022
When Supplemental Security Income (SSI) Payments Will Arrive in June 2022

Supplemental Security Income (SSI) payments are typically paid out on the first of every month, unless the first falls on a weekend or holiday. According to ...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business