The Social Security Administration began its life in the 1930’s as an insurance company with the creation of Social Security as a retirement pension plan. Yes, your Social Security Administration is an insurance company at its core. In the 1950’s, a line of disability insurance was added to the retirement pension program. Later still, in the 1960’s Congress decided to create uniform standards for how the states would use federal tax money in their various state-run disability programs for the poor. Congress assigned SSA the task of administering this new program. So SSA became a hybrid – part insurance company and part agency administrator of a disability program for the poor.

The Social Security Administration thus has two programs that are for persons who become unable to work because of medical impairments. It is important to understand the difference.

The first is Social Security Disability Insurance (SSD). A part of the wages withheld from your paycheck (you see it on your paycheck as FICA) has been used to buy you this disability insurance. If you become medically unable to work for one year or longer, you can make a claim for payment on your disability insurance policy. If the claim is approved, monthly insurance payments are then made to you and to your qualified dependents. SSD is similar to disability insurance offered by private insurance companies, like the disability insurance that AFLAC’s duck tells us about on TV.

The second is the Supplemental Security Income program, commonly known as “SSI”. This is the disability program for the poor. It is intended to be a supplemental payment for those who do not have enough of a work history to be eligible for disability insurance benefits. SSI also provides a supplemental payment to persons whose disability insurance payments are not high enough to provide a minimum level of support. To be eligible for SSI, you must first of all be disabled, but you must also be financially needy in terms of income and resources.

Generally, when you apply for “disability” you will be asked to complete applications for both types of disability benefits. SSA will then screen you for eligibility under both programs. SSA’s determinations are very important, and the decisions are not always correct. At Goss & Fentress, we review these determinations as part of your appeal.