Difference Between Social Security and Supplemental Security Income(SSI) (With Table)

First comes education, then a good job, after that one needs to start a family or that’s what the society dictates and finally retirement. Now, most people try to save up for their retirement but it is, of course, easier said than done, with everyday expenses, healthcare, and emergencies, it is not always possible to have a certain amount of retirement fund. 

That is where Social Security comes in, it provides a base income or pension for certain strata of society, especially old people, survivors, and people with disabilities. This is a federal pension system of sorts, where the current worker pays a certain amount which in turn helps the retired ones, who did the same when they were a part of the workplace.

SSI is a Federal income supplement program wherein people with limited income or resources can draw benefits for it. It is targeted to help the ones in need like old citizens, people with disabilities, like blindness, and more. 

Social Security vs Supplemental Security Income(SSI)

The difference between social security and SSI is that social security is based on the earnings a person or their family member had while they were in the workforce while SSI is based on the needs of an individual. 

Comparison Table Between Social Security and SSI

Parameters of ComparisonSocial SecuritySSI
How does it workPeople who used to be in the workforce and have certain minimum credits can avail of this as a retirement or disability fund.This does not depend on any prior work or credit, rather on the present resources or income one might have.
What is itMonthly payment benefits are given to people over the age of 62, or disabled.Monthly payment benefits are given to people with limited income and resources who are 65 or above or have a disability including blindness.
Whom does it benefit?The individual and their family.Only the individual.
Funded byThe people on the payroll.U.S Treasury.

What is Social Security

This is a program funded by basically the people, the taxes the current workforce pays to the Federal government. A person who has worked and paid the required taxes for at least ten years is 62 years of age in the minimum while applying for the benefits. It, not only covers the former worker but also their spouses or ex-spouses. There is a minimum credit requirement and after that is met, the benefit is provided based on their average monthly income during their 35 years of their highest income.

In order to get disability benefits, which might last for one year or more, or result in death, the person or even their family can apply for the same. The qualifications are based on certain earning tests and it also includes blindness. The children or spouses of a deceased worker can also get benefits, which is the survivor benefits and it depends on the income of the deceased worker. This however depends on circumstances and other variables, so a bit more complicated than the rest two.

Started in 1935, this is one of the major best Acts ever passed by the federal government, it has also kept up with changing times and inflation rates, and changed the rules as per the current scenario. Also, none of the benefits or the amount of it is dependent or deterred by other factors like other income sources or the family one may live with, along with medical benefits.

However, there is a disadvantage in recent years, as the number of people drawing benefits outweighs the number of people in the workforce. Thus there is a rising gap between the two and so in the future, there might be a need either to reduce the amount for the benefits or raise the age for it or a combination of the same.

What is Supplemental Security Income(SSI)

Unlike Social security, SSI is more geared to provide for the people who are actually in need of a little extra help to get by. This is not based on any prior income of a person, rather it depends on their present income and resources or the absence of it, they provide monthly benefits to disabled and old people. (65 and above)

 They provide medical benefits and even food assistance is provided in certain cases. The medical benefits include the hospital bill for the stay, the prescription drugs, and other similar costs. This is funded by the general funds of the U.S Treasury and not by the people. So these benefits might vary depending upon one’s income or their caregiver’s or family’s income.

This is exclusively for the ones who are unable to meet their basic needs of food, shelter, and healthcare. There are four living arrangements in place for such a situation, A B C, and D. In some cases, the person might have rental liability or need assistance to get food and even medical health-care or only one of the above. There is the separate plan “C” specially aimed for the children.

Main Differences Between Social Security and SSI

  1. Social Security is income and entitlement driven while SSI is based on the “need” of the individual.
  2. Social Security payments are not limited and it depends on the income the individual had while they were in the workforce of any kind. SSI has a limited payment basis though it does not depend on any prior work one may or may not have had.
  3. Social Security is financed by the taxes paid by the current workers under the Self-Employment Contributions Act (SECA). While the SSI is funded by the U.S Treasury.
  4. Social Security does not depend on the current income or family resources one might have if they are otherwise eligible. SSI on the other hand depends on both of these, as it is more about providing the basic necessities to the people in need.
  5. Families are not included under the SSI benefits, however, in the case of social security, there are spousal benefits as well as benefits for other family members even if the original worker might have been deceased. 

Conclusion

Both are virtuous plans under the Federal government and has been helping people over the past decades. It of course depends on the individual’s need and resources to apply for either of them. As the SSI is geared more towards the daily need and basic requirements of the average individual, it is best suited for the ones who are in actual need of the Government’s help. Social Security on the other hand is more of a pension scheme for most, which will help them out after their retirement after serving their community for years, in whatever field that might be.

References

  1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2667005
  2. https://eric.ed.gov/?id=ED564129