Two benefits are...more complicated than one

In my last two blogs, I talked about when applicants might or might not be eligible for Social Security Disability benefits.  In this one, I will talk about what happens when an applicant is not only eligible for benefits, but eligible for more than one, either concurrently or sequentially.  I will start by reviewing the different types of benefits.

Supplemental Security Income or SSI is the disability benefit created under Title XVI of the Social Security Act and sometimes referred to by that title.  SSI is a cash benefit available to people who have disabilities or are senior citizens and who have little to no income and few financial assets.  The person must also meet other criteria.  For example, s/he must be a United States citizen, national, or qualified non-citizen.  Note that very few people fall into that last category.

Social Security Disability Insurance or SSDI is the disability benefit created under Title II of the Social Security Act and sometimes referred to by that title.  SSDI is a cash benefit available to people who have worked and paid Social Security tax and have thus accumulated sufficient Social Security credits to be “insured”.  Note that the number of credits needed to be so insured varies by the age of the applicant.  Younger applicants need less credits. 

Childhood Disability Benefit or CDB, also known as Disabled Adult Child or DAC benefit is the cash benefits also created under Title II of the Social Security Act.  CDB/DAC is available to a person whose disability started prior to her/his age 22, who has continued to meet the Social Security disability criteria, and who has at least one parent (biological or adoptive) who is receiving either SSDI or a Social Security Retirement benefit or who has died.

These benefits are not mutually exclusive, and the “disability” part of the eligibility equation is the same for each of them.  So, how might a person be eligible for more than one and how, then, would the multiple benefits interact?  Let’s look at some examples.

Melissa is 18 and the year is 2022.  She has a disability that meets the Social Security eligibility criteria.  She is still in her school transition program, building vocational skills, but at this point, she has had only unpaid work-based learning experiences.  Her application is successful and she starts receiving a monthly SSI cash payment of $841/month (the maximum for that year).  In 2023, Melissa’s transition program helps her find paid employment.  Melissa works and earns $320/month.  Based on this work, she accumulates two Social Security credits in 2023, two in 2024, and two by the end of 2025.  In the first quarter of 2026, Melissa is also eligible for SSDI, based on her own work record, because she has accumulated six credits in three years and she is not yet 24.  Melissa begins to receive $320/month of SSDI.  Melissa is still working and earning $365/month in this current year. 

Unearned income reduces SSI payable, dollar for dollar, after the first $20.  SSDI is unearned income.  So, Melissa’s SSDI benefit reduces her SSI payable by $300.  Earned income reduces SSI payable by 50 cents for every dollar after the first $65/month.  So, Melissa’s earned income reduces her SSI payable by $150.  The maximum SSI payable in 2026 is $994.  So, Melissa’s SSI payable, after taking into account her SSDI and earned income is $994 - $300 - $150 = $544.  In this example, Melissa is eligible to receive both SSI and SSDI concurrently.

James has a similar profile to Melissa, but he has the opportunity and the capacity to earn more money employed in his family’s business.  James receives SSI, but he then starts working such that he earns $670/months.  Due to his higher earnings, James earns six credits in a year and a half.  He, too, is under 24, so he is also fully insured for SSDI at this point.  James starts to receive SSDI in the amount of $670/month.  This reduces his SSI payable by $650.  His earned income, now at $695/month, reduces his SSI payable by $315.  James’ SSI calculation is such that $994 – 650 - $315 = $29.  In this example, James is eligible to receive both SSI and SSDI concurrently, but if his earned income goes up and/or his SSDI payments rise due to a cost-of-living adjustment, he may cease to receive SSI and receive SSDI only.

Melissa is now 37 and her mother is 67 and at her full retirement age for Social Security.  Melissa’s mother files for her Social Security retirement benefit, which is $3,800/month.  This entitles Melissa to a Childhood Disability Benefit/Disabled Adult Child benefit.  Melissa is still working.  By now, her earned income is $850 per month.  Since this amount of earned income is below the Substantial Gainful Activity level, Melissa still meets the Social Security Definition of “having a disability”.  Due to cost-of-living adjustments (COLA), her SSDI benefit has risen to $500/month.  The maximum CDB/DAC benefit payable is 50% of the parent’s “primary insurance amount” (PIA).  For practical purposes, the PIA is the same as the benefit payable at full retirement age.  Therefore, the maximum CDB/DAC that Melissa could receive is $3,800 X 50% = $1,900/month.  However, the Social Security Administration takes into account that Melissa already receives SSDI on her own work record of $500/month.  Thus, Melissa’s CDB is the additional amount which, when added to her own benefit, will total $1,900/month.  Melissa receives $500 of SSDI and $1,400 of CDB/DAC.

When James turns 28, his father has a stroke and begins to receive SSDI.  James is now potentially eligible for a CDB/DAC benefit, based on his father’s work record.  James is still working, now earning $1,000 per month.  James’ SSDI benefit on his own records is currently $800/month.  James’ father’s PIA at the time he files for SSDI is $3,200 per month.  James’ potential CDB/DAC benefit is $3,200 X 50% = $1,600/month less than the $800 that James already receives of SSDI.  James’ CDB/DAC is $800/month.  Ten years later, James’ mother files for Social Security.  Her PIA is $4,800.  At this point, due to COLA, James’ SSDI on his own work record is $1,000.  His potential CDB/DAC on his mother’s work record is $2,400/month.  Because his mother’s PIA is higher than his father’s, James now begins to receive CDB/DAC on her work record.  After accounting for his own SSDI, James will now receive $1,400 in CDB/DAC.

Elise has a disability such that she is not able to work at all.  She began receiving SSI at age 18.  In 2026, when Elise turns 35, her parents both turn 67 and file for Social Security retirement benefits.  Elise’s mother’s PIA is $3,500.  Elise’s father’s PIA is $4,200.  Since Elise’s father’s PIA is higher, Elise begins to receive a CDB/DAC benefit based on his work record.  Since she has no SSDI on her own work record, her CDB/DAC is $2,100/month.  Elise’s CDB/DAC benefit reduces her SSI payable, dollar for dollar, after the first $20/month.  Since $2,100 - $20 = $2,080 > $994 (the maximum SSI payable in 2026), Elise is no longer eligible for SSI at all once she begins to receive her DAC benefits.

Eric has a disability and has worked for 20 years.  Eric’s SSDI on his own work record is $1,400/month.  Eric’s parents just turned 67 and have applied for Social Security retirement benefits.  Each parent worked in jobs that were covered by Social Security and jobs that were not.  As a result, Eric’s parents’ PIAs are both $2,000.  Eric is technically eligible for a CDB/DAC benefit of $1,000/month when his parents being to receive their Social Security retirement benefits, but since Eric already receives an SSDI benefit on his own work record that is larger than the CDB/DAC he could receive on his parent’s work record, he does not receive any CDB/DAC.

When is person is eligible for Social Security disability benefits, they may be eligible for one benefit only, or more than one benefit sequentially, or more than one benefit concurrently.  The mixture is different for each person depending on her/his own work history and that of her/his parents.