Supplemental Security Income (SSI) is Social Security's welfare program, based on need. It isn't really Social Security, which you can collect if you or a family member has a work record and which is paid from the Social Security trust fund. SSI is for people who are over 65, disabled, or both, who have neither a sufficient work record, resources nor income to collect Social Security. It is paid from general government revenues. If you are disabled before retirement age and your work record makes you eligible for Social Security Disability (SSDI) of over $698 per month as of 2012, you cannot get SSI. If your SSDI is less than $698, you can receive both SSI and SSDI, provided you meet the SSI resource and income limits.
What Is a Disability?
The Social Security Administration defines disability as a health condition that keeps you from functioning as other children do if you're under 18. If you're 18 or over, a disability has to keep you from working and earning at a level that the SSA calls Substantial Gainful Activity (SGA), which in 2012 is $1010 per month. It's not just that you are disabled; you also have to be earning less than SGA when you apply to be eligible for SSI.
You aren't eligible for SSI if you have over $2,000 in cash, but you can own a house and one car. If you have unearned income of over $698 per month in 2012, you will not be able to get SSI. If you are under 18, the income and assets of your parents or legal guardians is deemed to be partially yours and may make you ineligible. This is why children, unless they come from a very poor family, generally won't qualify, regardless of their disability.
Working and SSI
You can work if you are receiving SSI. In fact, the SSI system encourages work. If you earn money, the first $65 is not counted, then each dollar over that reduces your SSI payment by 50 percent of earnings. For example, if you earn $465 in a month, the first $65 has no effect on your SSI payment. The remaining $400 reduces your SSI payment by only $200, and you keep your entire earnings. You always have more money when you work and receive SSI.
SSI, Medicaid and Unearned Income
In 39 states, when you get SSI you are also automatically eligible for Medicaid. The states that don't provide Medicaid automatically are Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma and Virginia. In the 39 states, even if your earnings get too high to continue to get an SSI payment, you generally can still keep your Medicaid coverage. Unearned income complicates a recipient's position, both with regard to SSI and Medicaid. It reduces your SSI payment dollar-for-dollar. As of 2012, if you have unearned income of $698 or over, you not only lose your SSI, you also lose your Medicaid. These figures are measured on a monthly basis, as is the resource test, and if you lose your SSI for 12 months, you have to reapply.
Richard Friedkin has many years of experience as a Certified Public Accountant, a Certified Financial Planner and a corporate CEO. He has been a writer for more than 30 years, writing everything from dense technical memos to whimsical children's stories. Friedkin's work has been published locally and performed on stage.