Q: You’ve written in past columns that the SSI program is not a Social Security benefit. But my sister is getting SSI. And when she gets letters about her payments, they come from the Social Security office. So how can you say SSI has nothing to do with Social Security?
A: To answer your question, let me give you a little history lesson. Back before 1973, each state, and sometimes even each county, had its own welfare program for low-income elderly and disabled people. Because there were literally hundreds of such programs around the country, there were wildly different eligibility factors and payment levels. It was not uncommon for an indigent senior citizen in one place to be denied welfare benefits, while just over the county or state line, someone who was better off financially was able to qualify for monthly checks from his or her local welfare office.
Congress thought this was unfair. So in 1973, it decided to nationalize the welfare programs for poor folks over age 65 and for people with disabilities who were down on their luck. There would be one set of eligibility rules that would apply to everyone no matter where they lived. There would also be one standard federal payment level — although they did include provisions that would allow states to add a few bucks to the federal payment if the state wanted to be a little more generous.
Then Congress had to figure out who would run the new federal welfare program. They decided the Social Security Administration was ideally suited for the task. SSA already had a network of field offices around the country. And there was more than a little bit of overlap in the beneficiary pool for both programs. (In other words, Congress figured that a lot of the poorer folks getting Social Security benefits might qualify for some extra help from the new program.)
Congress also had to figure out what to call the new federal welfare program. And they came up with the name “Supplemental Security Income.” On the one hand, it was a good name, because the program did just what its moniker implied: it “supplemented” someone’s “income” up to various levels in order to provide them with some form of financial “security.”
But on the other hand, it was a poor choice for a name because everyone assumed, especially given the fact that the Social Security Administration ran the program, that it was just a new kind of Social Security benefit.
After all, Supplemental Security Income, managed by the Social Security Administration, sure does sound like some kind of supplemental Social Security benefit.
So here we are, almost a half-century later, and people are still confused. If my emails are any indication, I will bet that at least three-fourths of the people in this country think that SSI is a Social Security benefit.
So let me repeat for maybe the one-thousandth time in this column: Supplemental Security Income is a federal welfare program that just happens to be managed by the Social Security Administration. It is NOT a Social Security benefit and it is NOT funded by Social Security taxes. The money to pay the benefits comes out of the government’s general funds. And SSA is even reimbursed from the general funds for the administrative time it takes to run the SSI program.
And to reiterate this point, SSI stands for Supplemental Security Income. It does NOT stand for Social Security Income. Every single day, I get emails from readers who tell me, “I am getting SSI,” when they really mean they are getting Social Security.
Q: I have a sister who is about to turn 62. She has been disabled for a very long time and is getting SSI disability payments. (She worked for a couple years, but nowhere near long enough to qualify for Social Security disability benefits.) She was married many years ago to a man who is now 67 years old. They were married for about 15 years before getting a divorce. I have several questions. Is my sister eligible for benefits on her ex-husband’s record? Assuming she is, must she file for those benefits at 62? Or can she wait until she is 66 to claim a higher amount? How does she go about claiming those benefits? And finally, if she gets those Social Security benefits, won’t they just take that money away from her SSI?
A: As explained in my answer to the first question, SSI is welfare. And as with any welfare program, the benefits are supposed to be a payment of last resort. What that means is that she must apply for any other benefits she is due before she can get an SSI check. And she must apply for those other benefits as soon as she is due them.
So she must file for divorced wife’s benefits as soon as possible to be effective with the month she turns 62. She would get an amount equal to about one-third of her ex-husband’s Social Security benefit. And you guessed right. Whatever she gets from those divorced wife’s benefits will just be deducted from her SSI payment.
But because of a little twist in the rules, she will end up $20 ahead. And here is why. The law says that when SSA figures the amount of her SSI check, they can’t count the first $20 of outside income she has.
For example, let’s say your sister is getting $730 per month in SSI now. After she files for divorced wife’s benefits, she starts getting $650 per month from her ex-husband’s account. Normally, she would then get $650 from Social Security and $80 from SSI to take her up to the $730 level. But because of the $20 “disregard” rule, they only count $630 of her Social Security benefits against her SSI.
So she would get $650 from Social Security and $100 from SSI, giving her total benefits of $750 per month. That’s why she ends up with an extra $20 when all is said and done.
To file for those benefits, she should just call Social Security at 800-772-1213. She can file over the phone, or make an appointment to visit her local Social Security office.