SSI Is Not Social Security

When most folks say they want to file for SSI benefits, they are actually referring to Social Security.

SSI is a welfare program. It is not a Social Security program. Vitalii Vodolazskyi/Shutterstock

I can tell it’s time for me to once again explain to people that SSI and Social Security are two entirely different programs.

Every single day, I get emails from readers who say something like, “I am getting SSI, and I want to know if my wife might be due some of my SSI.” Or they will say: “I’m getting close to retirement. How do I file for my SSI benefits?”

I know from experience that these folks are talking about Social Security, not SSI. I’m guessing that they think that SSI stands for “Social Security Insurance.” It does not. SSI stands for Supplemental Security Income. It is a federal welfare program that really has nothing to do with Social Security, other than the fact that it is managed by the Social Security Administration (SSA).

And mixing up the programs is not just a matter of a semantic error. It could be problematic. For example, if you call the SSA and say you want to file for SSI (when you really mean to say you want to file for Social Security), you could be led down a very incorrect administrative path. To clarify things further, let’s start with some background.

Obviously, everybody knows what Social Security is. You get a Social Security number, you work, you pay Social Security taxes, and one day you and possibly some of your dependents collect Social Security retirement benefits. Or you become disabled before reaching retirement age, and you and possibly some of your dependents get Social Security disability benefits. Or you die and your widow or widower and/or minor children collect Social Security survivor benefits.

But only a small percentage of Americans really know what SSI is. To introduce it, here is just a short history lesson. Back before the early 1970s, there were hundreds of different welfare programs in the country. Sometimes states administered welfare programs. Other times, counties had their own welfare programs. And in some places, cities or other jurisdictions had their own welfare programs. And they all had different rules and eligibility factors. It was a mess.

Some officials in the Nixon administration had a good idea. They decided to federalize and standardize this hodgepodge of welfare programs into one national program. But then they had two bad ideas.

The first bad idea was that they gave this new program to the SSA to run. On the one hand, I suppose it made sense. The SSA had a network of field offices around the country, and it had the computer infrastructure necessary to manage a big national government benefits program. On the other hand, it messed up a nice clean government operation used to deal mostly with grandpas and grandmas and saddled it with the task of running a big, messy welfare system.

Their second bad idea was the name. Somebody somewhere in the Nixon administration decided to call the new program Supplemental Security Income. I understand what they were trying to do. They wanted to remove the negative connotations of the word “welfare” from the minds of potential program beneficiaries. But this act of political correctness has led to problems ever since.

So they called the new program Supplemental Security Income, and they gave the program to the SSA to run. And almost everyone back then in the 1970s and almost everyone still today thinks that SSI is some kind of supplemental Social Security benefit.

It’s not. To repeat, SSI is a federal welfare program that has nothing to do with Social Security other than the fact that it happens to be managed by the SSA. Also, SSI payments are funded out of general tax revenues, not Social Security taxes.

Gosh, how I wish that they had called SSI something like the Federal Welfare Program. And gosh, how I wish that they had created a new federal agency to run it and called it something like the Federal Welfare Benefits Administration.

Anyway, here are some examples just from this week’s emails that give you an idea of all the confusion caused by the misnamed program.

Q: I am getting ready to retire. I called Social Security and told them that I want to apply for my SSI benefits. They asked me a bunch of questions about my income and assets and about my house and car. And then they told me that I have too much money to get SSI. I was so confused that I just hung up. Can you help?

A: Yes, I can help. Call them back and tell them that you want to file for Social Security retirement benefits. You do NOT want to file for SSI. To be fair, after a little more questioning, the Social Security agent you talked to should have realized that you wanted to file for Social Security and not SSI. But maybe you hung up in frustration before he or she had a chance to figure that out.

Q: In a past column, you said someone getting disability could inherit a million dollars and still be eligible for benefits. Well, I recently inherited a lot less than that (about $100,000), and it got me into all kinds of trouble with my SSI disability. I’m jumping through lots of hoops now trying to keep my benefits.

A: You misunderstood what I wrote. In that past column, I was referring to someone getting Social Security disability benefits. Social Security is not a welfare program. You could be a millionaire and still get Social Security, whether it’s a retirement benefit, a disability benefit, or a survivor benefit.

But you are not getting Social Security disability. You are getting SSI disability. And to repeat, SSI is a welfare program. And as a general rule, someone who inherits $100,000 doesn’t need welfare. I’m not a real expert on the SSI program, but you may be able to set up something called a “special needs trust” that lets you keep your SSI checks. Those may be the “hoops” you are trying to jump through.

Here is an interesting tidbit that further shows how these two programs can get confused. The Social Security disability program is frequently referred to as SSDI, which stands for Social Security Disability Insurance. And the SSI disability program is usually called SSID.

So finally, repeat after me. SSI is a welfare program. It is not a Social Security program. SSI does not stand for Social Security Insurance. It stands for Supplemental Security Income.