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Addressing Concerns Related to Losing Social Security and Health Care Benefits

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Virginia Commonwealth University

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Addressing Concerns Related to Losing Social Security and Health Care Benefits

T-TAP conducted a national survey of Community Rehabilitation Programs asking them their opinion regarding what factors maintain sub-minimum wage employment for individuals with disabilities.  Specifically, respondents were asked their opinion on the following statement: "Fear of losing benefits such as SSI, SSDI, and/or other health care is one of the primary reasons individuals in our sub-minimum wage programs / 14 (c) programs do not want competitive jobs."  Of the agencies submitting a reply, approximately 59% agreed with this statement; 32% disagreed, and 9% expressed no opinion.

Considering that almost 60% of the respondents felt that loss of benefits is a barrier to employment, individuals with disabilities, their family members, and community rehabilitation staff need accurate information and guidance on the potential impact of earnings on benefits. This fact sheet will address common questions regarding how work in an integrated community job may impact an individual's benefits. Readers are reminded that the impact of work on benefits varies on a case-by-case basis.  Assistance from a trained benefits specialist is always recommended to ensure that the advice given to an individual and his or her family is accurate.

Question:  How does an individual qualify for Supplemental Security Income (SSI)?

Answer: In order to receive SSI, an individual must meet two important criteria.   First, the person must either be disabled, as defined by the Social Security Administration (SSA), blind, or 65 years of age or older.  According to SSA, an individual is disabled if they are unable to earn more than a specified amount of money per month due to their disability.  In 2007, this figure is $900 and is referred to as Substantial Gainful Activity (SGA).  Second, SSA defines disability as individuals who have significant long lasting impairments.  The person's disability must be expected to last more than a year.  This definition is meant to rule out people who are injured for example in a car accident and are unable to work because or those injuries for a month or two. 

In addition, individuals must also meet an income and resource test.  Basically, Social Security needs to know how much money the person already has to meet living needs. The first part of this “test” looks at an individual’s income.   They look at how much the individual earns if they are working. If the amount is more than the current SGA, the person will not be found eligible.  This means that the individual is able to work at a substantial level and does not need the assistance of an SSI check.  Social Security not only looks at earned income but also unearned income.  Unearned income includes things such as Social Security Disability Insurance (SSDI), Veterans Benefits, life insurance proceeds, support and alimony, workers compensation, and unemployment compensation.  These benefits and income will affect whether or not an individual is eligible for SSI.

The second part of this “income and resource test” looks at the individual’s resources.  If an individual has more than $2,000 in resources, he or she will not be eligible for SSI.  Resources include anything that an individual can change to cash and potentially use to pay for food or rent.  Some examples of resources include cash, savings accounts, stocks, land or personal property.  There are some “resources” that Social Security does not count.  Some examples of these include: the home the person lives in and the land the home is on, household items such as furniture, burial spaces for the individual and the immediate family, and one car.

As one can see, SSI is a benefit that is meant for individuals who have very little money whether it is from work or savings.  SSI is meant to help people have just enough money to be able to afford somewhere to live and to buy food.  Someone that is only receiving SSI and has no other source of income is living below poverty standards. 

Question:  How does an individual qualify for Social Security Disability Insurance (SSDI)?

Answer: In order to qualify for Social Security Disability Insurance, an individual must meet three requirements.  First, the person must be disabled.  Social Security uses the same definition of disabled for SSDI as it does for SSI.  The second requirement that must be met in order to receive SSDI benefits is that the individual cannot be working or is earning less than SGA.   Remember, as with SSI, Social Security says that individuals who earn over $900 per month (in 2007) are performing Substantial Gainful Activity (SGA).  When earning $900 or higher, an individual's disability is not significant enough to affect their ability to work.

The last requirement that needs to be met is the individual must have insured status.  This means that they have worked in the past and have paid into the Social Security system through FICA taxes.  To become insured, an individual must pay these FICA taxes and accrue what are called “credits”.  The number of credits that a person needs to become insured varies from individual to individual.  This depends on the person's age and when he or she was determined disabled by SSA.

SSDI eligibility is not based on whether or not a person needs it financially. There are no restrictions on unearned income or resources as there are with SSI.  The amount of an individual’s SSDI check depends on how much Federal Insurance Contributions Act taxes (FICA) have been paid over that individual's work history.  This will vary from person to person.

Question:  Can you explain the difference between SSI and SSDI?

Answer: There are several differences between SSI and SSDI.  The first difference is that SSI is based on whether or not an individual needs the additional income in order to pay for food and rent. SSDI is a benefit that people pay into like other insurance programs.  This difference is apparent in the eligibility process for each.  For SSI, Social Security considers all of the income the person has (wages, other public benefits, bank accounts, etc).  On the contrary, SSA only looks at an individual’s wages in the eligibility process for SSDI. 

From Virginia Commonwealth University Rehabilitation Research and Training Center on Workplace Supports and Job Retention, Region III CRP-RCEP, Rehabilitation Services Administration. Used with permission. www.crp-rcep.org.

Comments [4]

I'm a 55 yr old who has been on medicare and Medicaid since 1998. Due to medical and financial issues I'm considering moving in with my 21yr old son, his fiance and their baby. Would I lose my Medicaid coverage by doing that? Would they lose any benefits they might qualify for if I lived with them?

Sep 11th, 2016 6:27pm

What is Supplemental Security Income (SSI)?

Jul 25th, 2016 1:10pm

How long after losing my ssi benefits does insurance drop? And, I was told I have to back everything they gave me the previous year in my checks, would I have to pay back the doctor bills, scripts and all?!?!

Apr 19th, 2016 8:29pm

My son receives SSI. My other son cashed his bonds. Will my son who receives SSI lose his benefits or just have his payment reduced?

Jul 9th, 2014 2:49pm

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