Special Needs FAQ's

What is the difference between SSI (Supplemental Security Income) and SSDI (Social Security Disability Insurance)?

Although both federal programs require a person to be completely disabled in order to receive benefits, the main difference between the two is that SSI comes with very stringent income and asset limits and SSDI does not have income and asset limits.  Sometimes, a beneficiary will receive both SSDI and SSI, although receipt of SSDI will reduce the amount of SSI that a person receives.  The other main difference between the two programs has to do with medical benefits.  A person who receives SSDI will receive Medicare benefits two years after he or she is deemed eligible for SSDI, while a person who receives SSI is immediately eligible for Medicaid (MassHealth).

Can I work and still receive federal disability benefits?

One of the criteria for receiving federal disability benefits is an inability to perform any type of substantial gainful activity.  For most people, this means that they cannot earn more than $1,000 / month from working.  However, if you are receiving disability benefits and would like to begin working, the government offers several programs to ease you back into the workforce without an immediate loss of benefits.  Also, income from working reduces the size of an SSI award – too much income could result in a complete loss of SSI (and therefore Medicaid) benefits.

How is my disability benefit calculated?

For SSDI purposes, your benefit is based upon how much you earned before becoming disabled.  For SSI purposes, the Social Security Administration starts with a full benefit amount based on the size of your family, and then reduces it depending on your income and living situation.  Income from working will reduce your SSI benefit by $.50 for each dollar earned, while unearned income reduces your benefit by $1.00 for each $1.00 of unearned income.  SSI benefits can also be reduced if you receive food or shelter for free.

How does a payback provision in a trust work?

Certain special needs trusts (first-party special needs trusts in particular) are required to have a so-called payback provision.  This provision states that upon the death of a beneficiary, any funds remaining in the trust must be paid to the government to reimburse it for any medical care that it provided for the beneficiary.  If there are still funds remaining after the government is reimbursed, they pass to the trust's remainder beneficiaries.  The tradeoff is that a beneficiary can place his or her own assets into the special needs trust and qualify for and/or maintain his government benefits.