Many disability benefit recipients wonder if their Social Security Disability Insurance (SSDI) payments will automatically convert to Supplemental Security Income (SSI) payments once they reach full retirement age. This is a common question, as both programs are administered by the Social Security Administration and provide support for disabled individuals. However, SSDI and SSI have distinct eligibility requirements and rules. SSDI does not automatically convert to SSI at full retirement age.
What is SSDI?
Social Security Disability Insurance (SSDI) provides income support to disabled workers under full retirement age who have earned enough work credits by paying Social Security taxes on their earnings. SSDI is considered an insurance program since workers pay into it via payroll taxes while employed.
To qualify for SSDI, applicants must meet the following criteria:
- Be disabled as defined by Social Security rules
- Have worked long enough and recently enough to be insured for disability benefits (usually about 10 years of work is required)
Benefits are paid to individuals who have a disability that prevents them from working for at least one year or that is expected to result in death. Disabled adult children may also qualify if a parent is deceased or starts receiving retirement or disability benefits.
SSDI Benefits
The monthly SSDI benefit amount is based on an individual’s lifetime average earnings. The average SSDI benefit in 2023 is $1,358 per month. Additional benefits may be payable to an eligible spouse and children. After 24 months of disability payments, beneficiaries also qualify for Medicare health insurance coverage.
SSDI has no asset limits. Benefits continue until the beneficiary reaches full retirement age, is no longer disabled, or passes away.
What is Supplemental Security Income (SSI)?
Supplemental Security Income (SSI) is a needs-based program funded by general taxpayer revenues rather than Social Security taxes. SSI provides a monthly income to persons who are aged 65 or older, blind, or disabled and who have limited income and assets.
To qualify for SSI, applicants must meet the following criteria:
- Be 65 or older, blind, or disabled according to Social Security guidelines
- Have limited income and assets (eligibility thresholds change annually based on the Federal Benefit Rate)
In most states, SSI recipients also automatically qualify for Medicaid health insurance coverage.
SSI Benefits
The maximum monthly SSI payment for 2023 is $914 for an individual or $1,371 for a couple. The actual amount paid is reduced by any countable income the beneficiary receives. Income from other sources can decrease SSI payments, but not eliminate eligibility, as long as the individual remains below asset limits.
SSI has strict resource limits of $2,000 for individuals and $3,000 for couples. Anything above these amounts (bank accounts, second vehicles, etc.) may disqualify a person from receiving benefits.
Does SSDI Automatically Convert to SSI at Full Retirement Age?
SSDI does not automatically convert to regular SSI payments once a beneficiary reaches full retirement age (currently 66 years old). The two programs have different purposes, eligibility rules, and funding sources.
However, some SSDI beneficiaries may choose to apply for SSI when they reach full retirement age. This is because SSI payments can continue past retirement age as long as the individual remains disabled and low-income, while SSDI payments convert to Social Security retirement benefits at full retirement age.
Why Doesn’t SSDI Automatically Convert to SSI?
There are several key reasons why SSDI does not automatically convert to regular SSI for beneficiaries upon reaching full retirement age:
- The programs have different eligibility requirements. SSDI requires a work history and payment of Social Security taxes. SSI does not.
- SSDI is an insurance program while SSI is a welfare program. Once SSDI beneficiaries reach retirement age, they begin receiving Social Security retirement benefits that they earned by working and paying Social Security taxes.
- The funding mechanisms are different. SSDI is paid from the Social Security trust fund. SSI is paid from general government funds.
- SSDI has no income or asset limits. SSI requires recipients to have limited income and assets.
These structural differences mean the Social Security Administration does not simply shift SSDI beneficiaries to SSI once they reach retirement age. The beneficiary has to take action and submit a new application specific to the SSI program.
What Happens to SSDI at Full Retirement Age?
In most cases, SSDI payments convert to Social Security retirement benefits when the beneficiary reaches full retirement age.
A Social Security retirement benefit is calculated in one of three ways:
- Based on the disabled worker’s prior earnings: The benefit amount will be equal to the amount they were receiving under SSDI if that amount is greater than what their Social Security retirement benefit would be otherwise.
- Based on a spouse’s earnings record: If eligible for a higher benefit based on a spouse’s work record, Social Security will pay that higher amount.
- Based on the individual’s own work history: In some cases, the SSDI benefit was lower than what Social Security retirement benefits would be due to increased earnings before becoming disabled. If so, the retirement benefit will replace SSDI based on their full work history.
Medicare coverage also continues unchanged once SSDI converts to retirement benefits.
The key thing to understand is that SSDI beneficiaries are not left without income at retirement age. Their payments simply convert to Social Security retirement benefits for which they are eligible.
Can an Individual Receive SSI and Social Security Retirement Benefits?
It is possible for an individual to receive both SSI and Social Security retirement benefits if they meet all eligibility requirements for both programs.
In this scenario, the Social Security retirement benefit is considered unearned income by SSI. SSI payments are reduced by the amount of Social Security benefits received.
For example:
- Jane receives $600 per month in Social Security retirement benefits.
- Jane meets SSI disability, income, and asset requirements for an SSI payment of $914 per month (the 2023 maximum).
- Jane’s countable SSI payment would be reduced to $314 ($914 minus $600) due to her Social Security retirement benefits.
So an individual could receive both Social Security and a partial SSI supplement. The total amount received depends on the amount of Social Security paid and other income sources.
How to Apply for SSI After Receiving SSDI
If an SSDI beneficiary is interested in applying for SSI as they near retirement age, here is the process:
- Contact Social Security to determine potential SSI eligibility.
- Submit an SSI application to Social Security either online, by phone, in-person, or by mail.
- Provide requested documentation to prove age, income sources, assets, living arrangements, and disability status.
- Attend any scheduled in-person interview with Social Security to review eligibility.
- Continue receiving SSDI payments until the SSI application is approved.
- If approved for SSI, SSDI will automatically convert to retirement benefits at full retirement age.
It can take 1-3 months for Social Security to process an SSI application. SSI can only be paid starting the month after submitting an application, so it is advised to apply up to three months before reaching full retirement age. This prevents any gap in disability income.
Getting Help Applying for SSDI to SSI Conversion
The process of moving from SSDI to SSI can be complex. Having assistance from an expert can ensure applications are filled out properly and improve chances of approval.
Disability Attorneys
Disability attorneys who helped clients obtain SSDI can also assist with applying for SSI conversion. They understand how Social Security evaluates claims and what documentation is needed. Attorneys who specialize in SSI and SSDI often charge no upfront fees but take a percentage of any back payments awarded.
Non-Attorney Representatives
Other non-attorney professionals can also provide assistance with SSDI to SSI applications. Disability consultants, advocates, or organizations like State Health Insurance Assistance Programs (SHIPs) offer free or low-cost help navigating Social Security. These representatives help obtain documents, complete applications, and communicate with Social Security on the claimant’s behalf.
Financial Planners
Financial planners who specialize in retirement and disability planning can provide assistance evaluating how an SSDI to SSI conversion impacts a client’s overall financial situation in retirement. They can help maximize Social Security benefits and find additional sources of income if SSI payments are not sufficient.
Frequently Asked Questions
Does my SSDI automatically switch to regular Social Security when I reach retirement age?
Yes, SSDI converts to a Social Security retirement benefit based on your lifetime earnings history when you reach full retirement age, usually 66 years old currently. This happens automatically – you do not need to apply.
What if I have limited income and assets when my SSDI stops at retirement age?
You may want to consider applying for SSI if you have limited income and assets beyond Social Security benefits. SSI provides supplemental income for disabled individuals with financial need. SSDI does not automatically convert to SSI, however – you must submit a separate application.
If I qualify for both Social Security and SSI, can I receive payments from both programs?
Yes, it is possible to get both Social Security retirement benefits and SSI if you meet all eligibility requirements. However, your SSI payment will be reduced by the amount of Social Security retirement benefits you receive. The total income between the two programs depends on your specific circumstance.
How do I know if I will qualify for SSI once my SSDI stops?
You can contact Social Security before you reach full retirement age to discuss your situation. They will review your income, assets, and living situation to give you an idea if you may qualify for SSI. Be prepared to provide details on all your expected income sources in retirement.
Can I receive Medicare if I am approved for SSI after SSDI?
Yes, your Medicare coverage will continue unchanged when your SSDI converts to retirement benefits, or if you begin receiving SSI payments. In most states, qualifying for SSI will also make you eligible for Medicaid coverage in addition to Medicare.
Conclusion
In summary, SSDI does not automatically convert to regular SSI at full retirement age. They are distinct programs with different eligibility rules. SSDI payments convert to Social Security retirement benefits based on lifetime earnings history when a beneficiary reaches full retirement age. At that point, a separate application will need to be submitted if seeking to establish SSI eligibility due to limited income and assets. Understanding how these programs coordinate is important when planning for the transition to retirement on disability benefits. Consulting with Social Security and knowledgeable experts can help maximize your eligible payments.