Because of her disability, a person receiving SSI may not have worked long enough to qualify for Social Security Disability Insurance (SSDI) benefits on her own work record. Therefore, once she meets the government’s strict physical or mental disability requirements and falls under SSI’s income and asset caps, the SSI beneficiary might assume that she will never obtain SSDI benefits in the future. But this is not always the case. In fact, many SSI beneficiaries who became disabled prior to turning 22 years old may begin to receive SSDI benefits when one of their parents retires, becomes disabled or passes away.
SSI beneficiaries (and anyone else, for that matter), qualify for the Disabled Adult Child (DAC) program if they became disabled prior to turning 22, if one of their parents paid into the Social Security program for the required number of quarters and then that parent dies, retires or becomes disabled. If the parent retires or becomes disabled, the child will receive 50 percent of the parent’s Social Security benefit, and if the parent dies the payment is increased to 75 percent of the parent’s benefit. These payments are triggered when the parent applies for Social Security or someone informs Social Security of the parent's death and tells the SSA about the child with disabilities. Once informed, the SSA will begin making SSDI payments directly to the disabled adult child.
If an SSI beneficiary suddenly begins receiving an SSDI payment, those additional funds could cause the SSI beneficiary to lose SSI if the amount he receives from his parent’s work record is greater than his current SSI benefit. Fortunately, SSI beneficiaries in this situation do not lose access to Medicaid too; so long as the beneficiary is single or married to another person who is also receiving DAC benefits, the receipt of additional SSDI funds does not create the Medicaid ineligibility that would normally result from a loss of SSI. In addition, after the beneficiary receives two years of SSDI, he will also begin to receive Medicare benefits. As a result, although the beneficiary might not receive his SSI cash award, he will have a larger SSDI payment and will gain access to more insurance options, a win for the beneficiary.
There is one other situation where an SSI beneficiary could acquire SSDI in the future, and that is when the SSI beneficiary works for enough quarters while receiving SSI to eventually qualify for SSDI on her own work record. Although this situation is extremely rare, it does happen, so SSI beneficiaries who are working limited hours should track their employment history carefully to find out when they are eligible for SSDI instead.
Your special needs planner can help you and your family navigate these complicated transitions, but, as always, you should consult your planner in advance of retirement or any other major life change to determine the effect of your actions on your loved one with disabilities.