There are many different acronyms that come into play when you are looking into estate planning and elder law topics. SSDI and SSI are two of them. Because they are so similar, some people think that there is no difference.
In fact, there are some significant differences.
The acronym SSDI stands for Social Security Disability Insurance.
When you are working and paying taxes, you are paying into the Social Security program. This program is in place to provide senior citizens with income after they reach the age of eligibility.
If you become disabled and unable to work, you can apply for Social Security Disability Insurance. You qualify by earning retirement credits. The amount of credits that you need to qualify for SSDI will vary depending on your age. If you are 62 or older, you would need 40 retirement credits.
In 2012, you can obtain up to four retirement credits per year. During the current calendar year, you get one credit for every $1,200 that you earn.
SSI is an acronym that represents the Supplemental Security Income program. This program also provides ongoing income for people who are disabled. However, this is a need-based program. It is not based on retirement credits. If you can prove that you have significant financial need and you can also provide proof that you are disabled, you may be able to qualify for SSI.
Many people who are enrolled in the Supplemental Security Income program also qualify for Medicaid. We practice law in California, and in our state, this program is called Medi-Cal.
Medicaid/Medi-Cal is a health insurance safety net, and it is also a need-based program.
Estate Planning Implications
If you were receiving income through the Social Security Disability Insurance program, you could receive an inheritance without losing your eligibility, because this is not a need-based program.
On the other hand, because Supplemental Security Income is in fact a need-based program, a direct inheritance could cause a loss of eligibility. You should keep this in mind if you have a loved one with a disability on your inheritance list.
You could safely provide for a loved one who is enrolled in government benefit programs through the creation of a special needs or supplemental needs trust. With these trusts, the trustee that you name in the trust agreement could use assets in the trust to satisfy the supplemental needs of the beneficiary. These expenditures would not impact government benefit eligibility.
Special Needs Planning Consultation
There are a lot of things to take into consideration if you want to provide for someone with special needs. You would logically have many questions, and we can provide you with answers.
Our firm offers free consultations, and you can send us a message through this page to set up an appointment: Campbell CA Special Needs Planning.