You see a veritable jumble of acronyms referred to when you are looking into legal subjects. These acronyms make it easy to talk about concepts, programs and legal devices that have wordy titles. In this post we will look at two of them: SSDI and SSI.
Social Security Disability Insurance
When you are working, you invariably see a chunk of your pay devoted to something called FICA. This is the portion of your tax dollar that goes toward Medicare and Social Security. If you pay into the program sufficiently throughout your working career, you will become eligible when you reach the appropriate age.
To qualify for Medicare and Social Security you accumulate retirement credits. You can earn up to four credits per year, and you become eligible when you have accrued at least 40 credits. In 2014, taxpayers get one credit for every $1200 that they earn.
The age of eligibility for Medicare is 65, and your age of full eligibility for Social Security depends on your year of birth. People born between 1943 in 1954 become eligible at the age of 66. The age of eligibility then goes up by two months per year until 1960. People who were born in 1960 and later become eligible for Social Security at the age of 67.
If you pay into the program adequately, you may qualify for Social Security Disability Insurance (SSDI) if you become disabled before you reach the age of full Social Security eligibility. The retirement credit requirement would depend upon your age.
Supplemental Security Income
SSI stands for Supplemental Security Income. As the name would imply, this program provides eligible individuals with an ongoing source of income.
You do not qualify for SSI through the accumulation of retirement credits. This benefit is potentially available to people who can demonstrate significant financial need, regardless of their accrual of retirement credits.
Many people who are disabled rely on SSI, because they have limited resources and they cannot earn much money on their own. This enters the picture from an estate planning perspective, because a direct inheritance could result in a loss of eligibility.
If you want to provide for someone with a disability without jeopardizing government benefits, you could consider the creation of a supplemental needs trust. These trusts are alternately referred to as special needs trusts.
With this type of trust the trustee could use the trust’s assets to provide for the supplemental needs of the beneficiary. These would be things that the government benefits do not cover.
The existence of the trust would not impact benefit eligibility.
If you would like to learn more about SSI, SSDI, and estate planning for people with disabilities, contact us through this page to request a free consultation: Hartford CT Estate Planning Attorneys.