SSDI and SSI: An Overview
In this post, we will provide clarity with regard to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). In this post, we will provide clarity with regard to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
Social Security Eligibility
When you work and pay FICA taxes, you earn retirement credits that lead to eligibility for Social Security and Medicare. This year, you get one credit for every $1,730 that you earn, and the maximum annual accrual is four credits.
After you have accumulated 40 credits, you will qualify for these programs when you reach the eligibility age. Medicare is 65 years old for everyone. The full eligibility age for Social Security is somewhere between your 66th and 67th birthdays depending on your birth year.
SSDI
This plan is disrupted if you become disabled along the way. There is recourse. If you have at least 40 credits with 20 of the credits being accumulated in the 10 years prior to the onset of your disability, you can qualify for Social Security Disability Insurance.
The exact amount of your benefit will depend on the extent of your contributions over the years. In 2024, SSDI benefits will reach a maximum of $3,822 per month. The average monthly benefit in 2024 is approximately $1,500. If you qualify for SSDI, you automatically qualify for Medicare 24 months after you start to receive your benefit.
The key point to understand is the fact that you can potentially qualify for this benefit regardless of your assets and your income.
SSI
Supplemental Security Income is another disability benefit. People 65 and older may be eligible for SSDI even if they’re not disabled. This is a needs-based program. You cannot qualify if you own more than $2,000 worth of assets. The maximum benefit is $943, with an average of just under $700 per month. People who qualify for this benefit also qualify for Medicare, and there is no waiting period.
Special Needs Planning
As estate planning attorneys, we advise clients who want to provide resources for loved ones with disabilities who are relying on SSI and Medicaid. A significant direct inheritance could impact eligibility, so you have to implement a special needs planning strategy.
This will revolve around the utilization of a supplemental needs trust. You create the trust, and then you choose a trustee who will act as administrator. Most people use a professional, such as a trust company or a trust department in a bank. As long as they are competent, any adult can act as a trustee. Benefit eligibility would not be affected.
Medicaid Estate Recovery
Medicaid can attach property that is left in the estate of a person who was enrolled in the program. Benefit eligibility would not be disrupted.
Medicaid Estate Recovery
Medicaid can attach property that is left in the estate of a person who was enrolled in the program.
When it comes to the remainder in a supplemental needs trust that is funded by a third party, the assets would be protected. A successor beneficiary that is named by the grantor would assume the role.
Sometimes a person with a disability will receive a personal injury settlement or judgment or come into money for some other reason. The funds can be used for a first-party trust to meet supplemental needs. The situation would be the same while the individual is living.
After their death, the assets would be available to Medicaid during the estate recovery phase.
Schedule a Consultation Today!
We are here to help if you are ready to work with an Oklahoma City estate planning attorney to put a plan in place. You can schedule a consultation right now if you call us at 405-843-6100.
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After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors Read More! Larry Parman is an attorney at law who has been practicing for over 30 years. He has helped many families with their estate planning needs.
