Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility, Benefits, and Financing
Released: 2018-05-16T00:00:00

Introduction

The Social Security Administration (SSA) is responsible for administering two federal entitlement programs that provide income support to individuals with severe, long-term disabilities: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI is a work-related social insurance program that provides monthly cash benefits to nonelderly disabled workers and their eligible dependents, provided the workers accrued a sufficient number of earnings credits during their careers in jobs subject to Social Security taxes. In contrast, SSI is a need-based public assistance program that provides monthly cash payments to aged, blind, or disabled individuals (including blind or disabled children) who have limited assets and little or no Social Security or other income. Both programs use the same basic definition of disability to determine eligibility; however, by virtue of design, each program serves a somewhat different population. In 2017, SSDI and SSI combined paid an estimated $199 billion in federally administered benefits to 14.5 million qualified disabled individuals and 1.5 million non-disabled dependents of disabled workers.

This report discusses the rules and processes used to determine eligibility for SSDI and SSI. It also explains how benefit amounts are computed, the types of non-cash benefits available to individuals who meet SSA's disability standards, and how each program is financed. For a quick overview of SSDI and SSI, see CRS In Focus IF10506, Social Security Disability Insurance (SSDI) , and CRS In Focus IF10482, Supplemental Security Income (SSI) .

Social Security Disability Insurance (SSDI)

Old-Age, Survivors, and Disability Insurance (OASDI), commonly known as Social Security, is a federal social insurance program established under Title II of the Social Security Act that provides workers and their families with a measure of protection against the loss of income due to the worker's retirement, disability, or death. Workers obtain insurance protection by working for a sufficient number of years in jobs where their earnings are subject to Social Security taxes and therefore are creditable for program purposes. Social Security is financed largely on a pay-as-you-go basis, which means that payroll and self-employment tax contributions from current workers, their employers, and self-employed individuals are used to make monthly benefit payments to today's beneficiaries. In 2017, an estimated 173 million people (or about 94% of all workers) worked in paid employment or self-employment covered by Social Security, and the program paid monthly benefits to approximately 62 million beneficiaries ( Figure 1 ).

The SSDI component of the program, which was enacted in 1956 and implemented in 1957, provides monthly benefits to statutorily disabled workers who are under Social Security's full retirement age (FRA) and to their eligible spouses, divorced spouses, minor children, student children, and disabled adult children. The Old-Age and Survivors Insurance (OASI) component of Social Security also provides benefits to eligible disabled dependents of retired workers and to eligible survivors of deceased beneficiaries and deceased insured workers. Although these individuals are not technically disability insurance beneficiaries, they are often included in the term SSDI , because they receive Social Security benefits due to a qualifying impairment. In December 2017, the SSDI component of Social Security paid benefits to 10.4 million individuals, including 8.7 million disabled workers and 1.7 million of their dependents. That same month, the OASI component paid benefits to 1.2 million OASI disability beneficiaries.

Eligibility Requirements for Disabled Workers

To qualify for SSDI, disabled workers must (1) be insured in the event of disability, (2) be under Social Security's FRA, (3) have a qualifying impairment (see the " Definition of Disability " section of this report), and (4) have filed an application for benefits.

Disability-Insured Status

Workers become insured for Social Security by acquiring a certain number of quarters of coverage (QCs) during their careers in paid employment or self-employment covered by Social Security. A worker's job is considered covered if the services performed in that job or net earnings derived by the individual result in wages or net earnings from self-employment income that are taxable and creditable for insured status and benefit computation purposes. In 2018, workers receive one QC for each $1,320 in covered earnings, up to the maximum of four QCs per year, regardless of when the money is earned. Thus, if a worker earns $5,280 in covered wages or net earnings from self-employment income during the first week of January 2018, then he or she would be credited with the maximum number of QCs for the calendar year. The amount of earnings needed for one QC is adjusted annually for average earnings growth in the national economy, as measured by SSA's Average Wage Index (AWI). Requiring individuals to have earned a certain number of QCs to qualify for cash benefits ensures that such individuals contribute a minimum amount to the insurance system via payroll and self-employment taxes on each QC's worth of covered earnings.

To be insured in the event of disability, known as disability insured , covered workers must be both fully insured for Social Security and meet a recency-of-work requirement. To be fully insured for SSDI, covered workers must have at least one QC for each calendar year after they turned 21 years old and before the year they became disabled. The minimum number of QCs for fully insured status is six for the youngest workers (or 1.5 years of covered work); the minimum number of QCs needed for workers aged 62 or older is 40 (or 10 years of covered work). In effect, individuals must have worked in covered employment or self-employment for about a quarter of their adult lives to be fully insured.

To meet the recency-of-work requirement , disabled workers generally need QCs during the 40-quarter period immediately before the onset of the disability. In other words, individuals must have worked in covered employment or self-employment for five of the 10 years before becoming disabled. However, workers under 31 years old may meet the recency-of-work requirement with fewer QCs based on their age. In 2017, SSDI provided disability insurance coverage to 154 million workers, with about 89% of covered workers aged 21-64 insured for SSDI.

Under the Full Retirement Age (FRA)

An insured worker must also be under Social Security's FRA to be entitled to SSDI, which for workers born from 1943 through 1954 is age 66. FRA is the age at which unreduced Social Security retired-worker benefits are first payable. Upon attaining FRA, disabled workers are automatically transitioned from disabled-worker benefits (or SSDI) to retired-worker benefits (or OASI); however, this change generally does not affect the amount of Social Security benefits paid to them or their dependents. Under current law, Social Security's FRA increases in two-month increments for workers born from 1955 through 1959 until reaching the age of 67 for workers born in 1960 or later. SSDI is not available to workers who have already attained FRA.

Eligibility Requirements for Dependents and Survivors

In addition to the disabled worker's own benefit, SSDI provides benefits to certain family members of the worker. Social Security pays benefits to family members because workers with one or more dependents are presumed to have greater financial need when they retire, become disabled, or die than similarly situated workers who are single. The OASI component also provides benefits to eligible disabled dependents of retired workers and to eligible survivors of deceased insured workers. The term deceased insured workers includes deceased individuals who received Social Security retired or disabled-worker benefits and non-beneficiary workers who were insured for Social Security at the time of their deaths.

SSDI Spouses

Validly married spouses of disabled workers qualify for benefits if they (1) are aged 62 or older or are any age and have an eligible child in their care who is under the age of 16 or disabled, (2) are not entitled to a retired or disabled-worker benefit equal to or larger than the spousal benefit, and (3) have filed an application for benefits. Spouses also must have been married to the worker for at least one continuous year immediately before the day on which the claimant's application is filed. This provision is known as a duration-of-marriage requirement .

Divorced spouses of disabled workers may qualify if they (1) are aged 62 or older, (2) are unmarried unless the remarriage occurred after attainment of age 60 or age 50 and the claimant was entitled to disabled widow(er)'s benefits, (3) are not entitled to a retired or disabled-worker benefit equal to or larger than the spousal benefit, and (4) have filed an application for benefits. Divorced spouses must have been married to the worker for at least 10 years immediately before the date the divorce became final.

SSDI Minor Children

Eligible minor children of disabled workers qualify for benefits if they (1) are unmarried, (2) are under the age of 18, and (3) have filed an application for benefits. An eligible child is the natural (i.e., biological) child, adopted child, stepchild, equitably adopted child, grandchild, or step-grandchild of the insured worker on whose earnings record the claim is based. For certain child claims, such as those involving stepchildren, an explicit dependency requirement must be met, which generally involves the insured worker providing evidence that the child is living with the worker or is receiving at least one-half of his or her support from the worker. Otherwise, the child is presumed to be dependent on the insured worker for his or her support. For more information on the rules governing a child's status for purposes of SSDI entitlement, see "GN 00306.001 Determining Status as Child," in SSA's policy manual, the Program Operations Manual System (POMS).

SSDI Student Children

Eligible student children of disabled workers qualify for benefits if they (1) are unmarried, (2) are aged 18-19, (3) are a full-time student at an elementary or secondary school, and (4) have filed an application for benefits. To be considered a full-time student, the child's scheduled attendance must generally be at the rate of at least 20 hours per week (certain exceptions apply). Benefits usually continue until the child graduates or until two months after the child attains the age of 19, whichever occurs first. (Social Security benefits for students aged 18-21 enrolled in post-secondary education [i.e., college] were phased out during the 1980s.)

SSDI Disabled Adult Children

Eligible disabled adult children of disabled workers qualify for benefits if they (1) are unmarried, (2) are aged 18 or older, (3) have a qualifying impairment that began before they attained the age of 22, and (4) have filed an application for benefits. Disabled adult children (DACs) are also called Childhood Disability Beneficiaries (CDB) by SSA. DAC beneficiaries must meet same the disability standard as disabled workers (discussed later in this report). Although DAC beneficiaries must generally be unmarried to be entitled to benefits, the law provides that they may marry other DAC beneficiaries, along with most other types of Social Security beneficiaries. This exception does not apply if the marriage was to a minor or student Social Security beneficiary or to a SSI-only recipient.

OASI Disabled Widow(er)s

Disabled surviving spouses of deceased insured workers qualify for benefits if they (1) are at least 50 years of age but not yet 60 years of age, (2) are unmarried unless the remarriage occurred after attainment of age 50 and the claimant was disabled at the time of the remarriage, (3) are not entitled to a retired-worker benefit equal to or larger than the divorced spousal benefit, (4) have a qualifying impairment that began within seven years of the insured worker's death or within seven years of a previous entitlement to such benefits, and (5) have filed an application for benefits.

The disabled surviving spouse must also have married to the worker for at least nine months. The duration-of-marriage requirement may be waived, however, if the worker was reasonably expected to live for nine months at the time of the marriage and (1) the worker's death was accidental, (2) the worker's death was in the line of duty while he or she was a member of a military serving on active duty, or (3) the claimant was married to the worker for at least nine months as a result of a previous marriage. Disabled divorced surviving spouses may qualify if they were married to the deceased insured worker for at least 10 years immediately before the date the divorce became final. As with disabled adult children, disabled widow(er)s must meet same the disability standard as disabled workers.

OASI Disabled Adult Children

Eligible disabled adult children of retired or deceased insured workers qualify for benefits if they (1) are unmarried, (2) are aged 18 or older, (3) have a qualifying impairment that began before they attained the age of 22, and (4) have filed an application for benefits. (The same provisions governing SSDI DAC beneficiaries also govern OASI DAC beneficiaries.) Unlike most types of Social Security beneficiaries, there is no maximum age limit for disabled adult children. In December 2016, there were 11,260 DAC beneficiaries aged 80 or older, all of whom were dependents or survivors of retired or deceased insured workers.

Termination Events

In general, disabled workers continue to receive SSDI benefits until they (1) die, (2) attain FRA, (3) no longer meet the statutory definition of disability (i.e., medically improve), or (4) return to work (i.e., have monthly earnings that exceed certain thresholds discussed later in this report). In 2016, the SSDI termination rate —the ratio of disabled-worker terminations to the average number of disabled-worker beneficiaries during the year—was 9.3% ( Table 1 ). The majority of disabled-worker terminations in 2016 were due to attainment of FRA.

With the exception of certain divorced spouses, receipt of SSDI dependents' benefits is linked to the disabled worker's entitlement to Social Security. If a disabled worker's benefits are terminated, benefits payable on his or her earnings record are also generally terminated. Dependents and survivors who no longer meet the relevant entitlement factors are terminated from the rolls as well.

Cash Benefits

Social Security Benefit Formula

Initial monthly Social Security benefits are based on an insured worker's creditable, career-average earnings in Social Security-covered employment or self-employment. The Social Security benefit formula is progressive, replacing a greater share of career-average earnings for low-wage or intermittent workers than for high-wage workers. In computing the initial benefit amount, a worker's annual taxable earnings are indexed (i.e., adjusted) to reflect changes in national earnings levels over his or her career, up to the second calendar year before the year of eligibility (i.e., the year a worker attains age 62, becomes disabled, or dies). Next, years with the highest earnings in the applicable computation period are summed and then divided over the number of months in that period to produce the worker's average indexed monthly earnings (AIME). A formula is then applied to the worker's AIME to compute the primary insurance amount (PIA), which is the worker's basic benefit before any adjustments are made. In 2018, the PIA is determined using the following formula:

90% of the first $895 of AIME, plus 32% of AIME over $985 and through $5,397 (if any), plus 15% of AIME over $5,397 (if any).

The dollar amounts used in this formula are adjusted annually for average earnings growth in the national economy, as measured by the AWI. The worker's PIA is subsequently adjusted to account for inflation through cost-of-living adjustments (COLAs), as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Spouses and dependent children of disabled workers each receive up to 50% of the worker's basic benefit amount (i.e., the PIA). These supplementary benefits effectively increase the worker's overall replacement rate —the ratio of benefits received to the worker's previous earnings—to account for additional expenses associated with each dependent. Benefits for dependents are less than the worker's own benefit because a family is assumed to have economics of scale.

Disabled widow(er)s receive up to 71.5% of a deceased worker's PIA. Disabled adult children of retired workers receive up to 50% of the worker's PIA, and disabled adult children of deceased insured workers receive up to 75% of the worker's basic benefit. Initial benefits for survivors are higher than benefits for dependents because a family of a deceased worker experiences a complete loss of that worker's earnings, whereas a family of a retired or disabled worker is compensated partially through the worker's own Social Security benefit.

Maximum Family Benefit Limits

Monthly benefits for retired or disabled workers and their eligible family members and for survivors of deceased insured workers are subject to family maximum provisions, which limit the total amount of benefits that can be paid on a worker's earnings record. Therefore, a dependent's or survivor's payable benefit amount may be less than the maximum share of the worker's PIA for that type of benefit. The family maximum for a disabled worker is the smaller of (1) 85% of the worker's AIME (or 100% of the PIA if larger) or (2) 150% of the PIA. If the total amount of all family benefits exceeds the maximum amount, then the benefit of each family member (other than the worker) is reduced proportionately. In December 2016, 27% of all disabled-worker families were receiving maximum family benefits. A different family maximum formula applies to OASI disability beneficiaries.

Workers' Compensation and Public Disability Benefit (WC/PDB) Offset

Disabled workers who also receive workers' compensation (WC) or certain other public disability benefits (PDB) may have their SSDI benefits reduced. The Social Security Act contains a provision that reduces the SSDI benefits of disabled workers whose combined disability benefits from SSDI and WC/PDB exceed 80% of their average earnings prior to the onset of disability. PDBs do not include disability compensation or pension benefits administered by the Department of Veterans Affairs (VA), disability benefits based on need (e.g., SSI, state or local general assistance [GA]), disability payments made to public employees based on employment covered by Social Security (except for WC), or wholly private pensions or private disability insurance benefits. The purpose of this provision is to reduce the attractiveness of SSDI benefits for concurrently eligible individuals who could otherwise remain in the labor force. The WC/PDB offset no longer applies once the disabled worker attains FRA and converts to retired-worker benefits. In 17 states and the Commonwealth of Puerto Rico, the direction of the offset is reversed, resulting in a reduction in the WC or PDB payment instead of the SSDI benefit. In December 2016, approximately 5.2% of disabled workers were eligible for WC or PDB payments, and about 1.2% of disabled workers were subject to the WC/PDB offset.

Average and Total Monthly Benefit Levels

In December 2017, the average monthly SSDI benefit was $1,197 for disabled workers, which on an annualized basis was $14,364 ( Table 2 ). The average monthly benefit for SSDI dependents ranged from $335 to $499. That month, SSDI paid out over $11 billion in benefits. For OASI disability beneficiaries, the average benefit that month was $800, and total monthly benefits were $992 million.

When SSDI Benefits Start (The Five-Month Waiting Period)

For disabled workers and disabled widow(er)s, entitlement to cash benefits begins five full consecutive calendar months after their disability onset date. This requirement is known as the five -month waiting period . The onset date is the first day that a claimant meets the definition of disability under Title II of the Social Security Act in addition to all relevant entitlement factors. If SSA establishes an onset date after the first day of the month, the five-month waiting period starts on the first day of the following month. For example, if a claimant's onset date were April 11, the waiting period would begin on May 1 and would end on September 30. Benefits would first be payable for the month of October, which is the sixth full month after the disability onset date. Because SSA pays Social Security benefits in the month following the month for which they are due, the individual would receive October's payment on one of several possible payment dates in November (i.e., the seventh month after the onset of disability).

Exceptions to the Five-Month Waiting Period for Cash Benefits

Disabled adult children are not subject to the five-month waiting period; their entitlement to benefits begins the month after their disability onset date, provided they meet all other entitlement factors. In addition, former disabled workers do not have to serve a new waiting period if they become disabled again within 60 months (or five years) after their previous entitlement to cash benefits or period of disability ended. A similar provision applies to disabled widow(er)s who become disabled again before age 60, and the new period of disability began within 84 months (or seven years) of the month they were last entitled to disabled-widow(er) benefits. Furthermore, disabled widow(er)s may count months of eligibility for SSI or federally administered state supplementary payments (discussed later in this report) toward the five-month waiting period. Under current law, there are no exceptions to the five-month waiting period for claimants with specific medical conditions, even those considered terminal.

Retroactive Benefits

SSDI provides retroactive benefits for up to 12 months immediately before the month the disabled worker files an application, provided the worker met all other entitlement factors prior to the filing date. Because of the five-month waiting period for cash benefits, the earliest effective date for a SSDI application can be no more than 17 months before the month in which the application is filed. The retroactivity provision was established because an early study of the program found that a large share of claimants did not file for benefits in the first month for which they were eligible. Retroactive benefits should not be confused with past-due benefits , which include both retroactive benefits and benefits owed to claimants for months in which they met all relevant entitlement factors in or after the month of application.

Medicare

In addition to cash benefits, Social Security disability beneficiaries (i.e., disabled workers, disabled widow[er]s, and disabled adult children) qualify for health coverage under Medicare. Established under Title XVIII of the Social Security Act, Medicare is a federal social insurance program that pays for covered health care services for most individuals aged 65 or older, the majority of Social Security disability beneficiaries and railroad disability annuitants under 65 years old, and certain other individuals who have qualifying impairments. (Medicare is not provided to non-disabled dependents under 65 years old.) As with Social Security, workers earn Medicare coverage by working and paying taxes for a sufficient number of years in covered employment or self-employment. For most individuals, entitlement to Medicare is linked to entitlement to Social Security benefits. Social Security disability beneficiaries under 65 years old are provided Medicare because they generally have medical conditions that require significant health care resources. However, many beneficiaries are often unable to work enough to gain health insurance through an employer or to pay for such insurance on their own. In 2013, annual Medicare spending per disabled beneficiary under 65 years old was about $12,776.

24-Month Waiting Period

Social Security disability beneficiaries under the age of 65 are entitled to Medicare after 24 months of entitlement to cash benefits. This requirement is known as the 24-month waiting period . After factoring in the five-month waiting period for cash benefits, disabled workers and disabled widow(er)s typically become entitled to Medicare 29-full calendar months after their disability onset date (i.e., the first day of the 30 th full month following disablement). For example, if a claimant's onset date were January 11, 2016, the five-month waiting period for cash benefits would be February 2016 through June 2016, with entitlement to cash benefits beginning July 2016. The claimant would become entitled to Medicare on July 1, 2018, which is the first day of the 25 th month of disability benefit entitlement. Disabled adult children are not subject to the five-month waiting period for cash benefits and therefore generally become entitled to Medicare 24 full calendar months after the onset of disability. Due in part to the 24-month waiting period, only 68% of all disabled beneficiaries under 65 years old reported entitlement to Medicare in 2016.

Exceptions to the 24-Month Waiting Period

General

Social Security disability beneficiaries may count months in which they were previously entitled (or deemed entitled) to cash benefits toward the current Medicare waiting period if their previous entitlement ended within 60 months (or five years) before the month of current onset for disabled workers or 84 months (or seven years) before the month of current onset for disabled widow(er)s and disabled adult children. Disability beneficiaries who meet the criteria above and were previously entitled to Medicare do not have to serve a second waiting period for Medicare, because they received cash benefits for at least 24 months during their previous period of disability benefit entitlement and therefore have a sufficient number of months to credit toward the new waiting period. Individuals who become disabled again after the prescribed period may still be able to count months of previous disability benefit entitlement toward the Medicare waiting period if their current impairment is the same, or directly related to, the impairment that served as the basis for disability during a previous period of entitlement.

In addition, disabled widow(er)s may count months of eligibility for SSI or federally administered state supplementary payments (discussed later in this report) toward the Medicare waiting period. It is worth noting that Social Security disability beneficiaries aged 65 or older are entitled to Medicare on the basis of age and thus are not subject to the 24-month waiting period.

Impairment Related

The Social Security Act specifically excludes disability beneficiaries with amyotrophic lateral sclerosis (ALS; also known as Lou Gehrig's Disease) from having to satisfy the 24-month waiting period requirement. Most disability beneficiaries with ALS become entitled to Medicare the first day of the month that entitlement to cash benefits begins, which for disabled workers and disabled widow(er)s is five full calendar months after the onset of disability.

The Social Security Act also contains separate Medicare entitlement provisions for individuals with end-stage renal disease (ESRD) or certain medical conditions caused by exposure to qualifying environmental health hazards, meaning that individuals who meet the relevant entitlement factors may enroll in Medicare without having to be entitled (or deemed to be entitled) to Social Security benefits. Neither of these entitlement provisions requires eligible individuals to satisfy a 24-month waiting period requirement, although individuals with ESRD may have to satisfy a three-month waiting period requirement if they are on dialysis and do not self-dialyze on a regular basis. Social Security disability beneficiaries who meet the requirements specific to these separate entitlement provisions generally receive Medicare coverage in the month they become entitled to cash benefits.

Financing

Social Security's receipts and outlays are accounted for through two legally distinct trust funds: the Federal Disability Insurance (DI) Trust Fund and the Federal Old-Age and Survivors Insurance (OASI) Trust Fund. In the federal accounting structure, a trust fund is an accounting mechanism used by the Department of the Treasury to track and report receipts dedicated for spending on specific purposes, as well as expenditures made to its beneficiaries that are financed by those receipts, in accordance with the terms of a statute that designates the fund as a trust fund. The DI trust fund records receipts and outlays associated with disabled workers and their dependents, and the OASI trust fund records receipts and outlays associated with retired workers and their dependents as well as survivors of deceased insured workers. Administrative costs are also drawn from the trust funds. Each trust fund is a separate account in the U.S. Treasury, and the two funds may not borrow from one another under current law.

Social Security is financed primarily by dedicated payroll and self-employment taxes levied on the earnings of workers in jobs covered by Social Security. Federal Insurance Contributions Act (FICA) taxes are split evenly between employees and employers, while Self-Employment Contributions Act (SECA) taxes are borne fully by self-employed individuals. The overall Social Security payroll tax rate is 12.4% of a worker's earnings (6.2% for employees and employers, each), up to a maximum annual amount, which in 2018 is $128,400. Of the 12.4%, 2.37% is allocated to the DI trust fund and 10.03% is allocated to the OASI trust fund. The two trust funds are also credited with income from the taxation of a portion of some Social Security benefits and from interest earned on special-issue U.S. securities held by the trust funds for years when receipts exceeded outlays.

In 2017, total receipts to the Social Security trust funds were $997 billion, with $171 billion (or 17%) credited to the DI trust fund ( Table 3 ). That same year, total outlays from the trust funds were $952 billion, with $146 billion (or 15%) coming from the DI trust fund. The trust funds held a combined balance of $2.9 trillion in U.S. securities at the end of 2017, with $71 billion (or 2%) credited to the DI trust fund. In 2017, 98% of the DI trust fund's outlays were for benefit payments, with 1.9% for administrative expenses, and 0.1% for certain transfers.

In their 2017 report and under current law, the Social Security trustees project that the trust funds on a hypothetical combined basis will be able to pay benefits in full and on time until 2034. However, as noted earlier, the two trust funds are legally distinct entities. Individually, the trustees project that the DI trust fund will be depleted in 2028 and the OASI trust fund will be depleted in 2035. Upon depletion, the trustees project that continuing revenues to the DI trust fund would be sufficient to pay about 93% of benefits scheduled under law, declining to 82% by 2091.

Under its June 2017 baseline and under current law, the Congressional Budget Office (CBO) projected that the trust funds on a hypothetical combined basis would be depleted in calendar year (CY) 2030, with the DI trust fund depleted in FY2023 and the OASI trust fund in CY2031. Under its April 2018 baseline, CBO now projects that the DI trust fund will be depleted in early FY2025. Upon depletion, CBO projects that continuing revenues to the DI trust fund would be sufficient to pay about 88% of benefits scheduled under law.

Supplemental Security Income (SSI)

Established under Title XVI of the Social Security Act in 1972 and implemented in 1974, SSI is a means-tested federal assistance program that provides monthly cash payments to the needy individuals and couples who are aged, blind, or disabled. The program is intended to provide a guaranteed minimum income to adults who have difficulty covering their basic living expenses due to age or disability and who have little or no Social Security or other income. It is also designed to supplement the support and maintenance of needy children who have severe disabilities. SSI is commonly known as a program of "last resort" because claimants must first apply for most other benefits for which they may be eligible; cash assistance is awarded only to those whose assets and other income (if any) are within prescribed limits. The basic federal SSI payment is the same for all recipients and is reduced by most other income that an individual receives. Some states supplement the federal payment using state funds. In December 2017, SSA issued federally administered payments to 8.2 million SSI recipients, including 1.2 million children under 18 years old, 4.8 million adults aged 18-64, and 2.2 million seniors aged 65 or older.

As shown in Figure 2 , the vast majority of SSI recipients enter the program through the disability pathway. In other words, most individuals become eligible for SSI due to a qualifying impairment other than blindness. Blind or disabled SSI recipients who attain age 65 continue to be classified by SSA as blind or disabled, even though they meet the categorical requirements to be classified as aged. To avoid confusion, this report focuses primarily on blind or disabled SSI recipients under 65 years old.

Eligibility Requirements

To qualify for SSI, a person must (1) be aged, blind, or disabled as defined in the Social Security Act, (2) have limited income and resources, (3) meet certain other requirements, and (4) have filed an application for payments.

Categorical Requirements

Public assistance programs usually limit eligibility to certain groups or categories of people who often have difficulty providing for themselves. Under the SSI program, an individual or couple must be aged, blind, or disabled to qualify for payments. Aged refers to individuals who are aged 65 or older. Blind refers to individuals of any age who have central visual acuity of 20/200 or less in the better eye with the use of a correcting lens or a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle of 20 degrees or less (i.e., tunnel vision). Individuals are considered disabled if they meet SSI's age-specific definition of disability (see the " Definition of Disability " section of this report).

Financial Requirements

In addition to meeting one of the aforementioned categories, an individual or couple must have limited income and other financial resources. Income is defined as anything one receives in cash or in kind that can be used to meet one's needs for food and shelter. Resources are cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance. Under SSI, a person's countable income and resources must be within the program's statutory limits. Because certain income and resources are disregarded (i.e., not counted), a person may have gross income or resources above the countable limits and still be eligible for the program. In addition to the person's own income and resources, the income and resources of certain ineligible family members (such as a spouse or parent) may be deemed available to meet the needs of the person, and as such, may be included in his or her countable income and resources.

Countable Income Limits

The limit for countable income—gross income minus all applicable exclusions—is equal to the federal benefit rate (FBR) , which is the maximum monthly SSI payment available to qualified individuals and couples who have no other income. In 2018, the FBR is $750 per month for an individual living in his or her own household and $1,125 per month for a couple living in their own household if both members are SSI eligible. The FBR is adjusted annually for inflation by the same COLA applied to Social Security benefits. Countable income is subtracted from the FBR in determining eligibility for SSI and the amount of the cash payment. In general, individuals and couples are eligible for SSI if their countable income is less than or equal to the FBR. In states that have an agreement with SSA for the agency to administer their state supplementation program (primarily California, Nevada, New Jersey, and Vermont), a person is considered eligible for SSI if his or her countable income is less than the FBR plus the amount of the applicable federally administered state supplementary payment.

Income That is Counted

Under the SSI program, all income is counted unless excluded under federal law or, if provided in statute, at the discretion of the Commissioner of Social Security through agency regulations or subregulatory guidance. SSI classifies income as either earned or unearned. Earned income includes wages, net earnings from self-employment, payments for services performed in a sheltered workshop (now known as a Community Rehabilitation Program [CRP]), and certain royalties and honoraria. Unearned income refers to all income that is not earned income (i.e., income not derived from current work), such as Social Security, benefits administered by the VA, unemployment insurance (UI), benefits administered by the Railroad Retirement Board (RRB), the individual's share of the Temporary Assistance for Needy Families (TANF) grant, workers' compensation, public or private pensions, interest income, cash from family or friends, and in-kind support and maintenance (i.e., the value of non-cash benefits such as food or shelter).

Income That is Not Counted

Certain income is disregarded in determining eligibility for and the amount of assistance provided by SSI. For example, the program excludes the following:

the first $20 per month of any income (earned or unearned), other than unearned income based on need that is totally or partially funded by the federal government or by a non-governmental agency (e.g., TANF); the first $65 per month of earned income plus one-half of any earnings above $65; the first $30 per calendar quarter of infrequent or irregular earned income; the first $60 per calendar quarter of infrequent or irregular unearned income; food assistance provided under the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program; energy assistance provided under the Low Income Home Energy Assistance Program (LIHEAP); housing assistance provided by most federally funded housing programs; federal tax refunds and advanced tax credits, including the Earned Income Tax Credit (EITC) and the child tax credit (CTC); assistance based on need that is funded wholly by a state or local entity; the first $2,000 received during a calendar year as compensation for participation in a clinical trial involving research and testing of treatments for a rare disease or condition; impairment-related work expenses (IRWEs) for disabled recipients and blind work expenses (BWEs) for blind recipients; and any income used to fulfill a plan to achieving self-support (PASS).

For a more detailed list of unearned income exclusions, see "SI 00830.099 Guide to Unearned Income Exclusions" in POMS.

The $20 per month general income exclusion and the $65 per month earned income exclusion are not indexed to inflation and have remained at their current levels since the SSI program was enacted in 1972.

Treatment of In-Kind Support and Maintenance (ISM)

SSA defines in-kind support and maintenance (ISM) as food or shelter that a person receives from someone else who pays for it. Shelter includes room, rent, mortgage payments, real property taxes, heating fuel, gas, electricity, water, sewerage, and garbage collection services. ISM is treated as unearned income subject to special rules based on a person's living arrangement. If a person lives throughout a month in another's household and receives both food and shelter from others living in the household, the FBR is reduced by one third. This reduction is known as the value of the one-third reduction (VTR) and is not rebuttable. In 2018, the VTR is $250 per month for an individual ($750 x 1/3) and $375 per month for a couple ($1,125 x 1/3). The $20 per month general income exclusion does not apply to ISM reduced under the VTR.

However, if a person receives ISM but does not receive both food and shelter from the household in which the individual lives (either his or her own household or the household of another), then the FBR is reduced by the presumed maximum value (PMV) rule. The PMV is a regulatory cap on ISM designed to address situations in which an individual receives ISM but is not subject to the statutory VTR. The reduction under the PMV is equal to one-third of the FBR plus $20, which in 2018 is $270 per month for an individual ($750 x 1/3 + $20) and $395 per month for a couple ($1,125 x 1/3 + $20). Unlike the VTR, the PMV is rebuttable. If the SSI recipient can show that the value of food or shelter received is less than the PMV reduction, then SSA reduces the FBR by the actual value of food or shelter received. Some ISM is disregarded, such as federal housing assistance. According to SSA, only about 9% of SSI recipients have ISM reductions.

Countable Resource (Asset) Limits

The limit for countable resources—gross resources minus all applicable exclusions—is $2,000 for an individual and $3,000 for a couple. Individuals and couples are eligible for SSI if their countable resources are less than or equal to the applicable statutory limit at any given time. Claimants and recipients who transfer (i.e., sell or give away) resources at less than fair market value (FMV) may become ineligible SSI for up to 36 months. The look-back period for determining if a transfer was made at less than FMV is also 36 months. Unlike the FBR, the countable resource limits are not adjusted for inflation and have remained at their current levels since 1989.

Resources That Are Counted

As with income, all resources are counted under the SSI program unless excluded federal law or, if provided in statute, at the discretion of the Commissioner of Social Security through agency regulations or subregulatory guidance. The person must have the right, authority, or power to liquidate the property (or his or her share of the property) for the asset to be considered a resource. Countable resources include the following:

cash retained as of the first moment of the month following the month of receipt; bank savings or checking accounts; stocks, bonds, mutual funds, and certificates of deposit; tractors, boats, machinery, livestock, buildings, and land; individual retirement accounts (IRAs) and 401(k) plans under certain conditions; unrestricted health savings accounts (HSAs); and most types of trusts established with the assets of an individual on or after January 1, 2000.

Resources That Are Not Counted

Certain resources are excluded in determining SSI eligibility. For example, the program excludes the following:

the person's primary residence; household goods and personal effects; one automobile used for transportation; property essential to self-support (PESS); health flexible spending arrangements (FSAs); resources needed to fulfill a PASS; federal tax refunds and advanced tax credits for a 12-month period; all life insurance policies on a person up to a combined face value of $1,500; up to $1,500 in burial funds set aside for burial expenses of the individual or the individual's spouse; special needs trusts (SNTs) or pooled trusts (PTs) that meet the requirements of Medicaid law; and the first $100,000 in an Achieving a Better Life Experience (ABLE) account.

For a more detailed list of resource exclusions, see "SI 01130.050 Guide to Resources Exclusions" in POMS.

Deeming of Income and Resources from Certain Close Family Members

As a program of "last resort," SSI expects close family members to provide support to low-income aged, blind, and disabled individuals in determining their level of need. Specifically, the income and resources of certain ineligible family members are deemed to be available to meet the basic needs of eligible individuals, and as such, may be included in the individual's countable income or resources for purposes of determining SSI eligibility and the amount of assistance. This process, known as deeming , is used instead of determining the amount of ISM provided by a deemor (i.e., the ineligible family member whose income and resources are subject to deeming) under the VTR or PMV rule. The Social Security Act specifies that deeming applies to the following types of relationships.

Spouse-to-Spouse. An eligible individual resides in the same household with his or her ineligible spouse. Parent-to-Child. An eligible child under 18 years old resides in the same household with his or her ineligible natural (i.e., biological) or adoptive parent(s) or with his or her ineligible natural parent and the spouse of a parent (i.e., a stepparent). Sponsor-to-Alien. An eligible alien has a sponsor (usually a relative) who assumes financial responsibility for him of her for purposes of the alien being lawfully admitted to the United States.

In determining the amount of the deemor's income and resources available to the eligible individual, SSA first applies the basic income and resource exclusions mentioned previously. Next, the agency deducts from the income of the ineligible family member an allocation for his or her living expenses, as well as an allocation for each ineligible child under 18 years old (or under 22 years old and a student) living in the household. This allocation does not apply, however, if the ineligible family member receives public income-maintenance payments, such as TANF or VA pensions based on need. In 2018, the allocation is $375 for an ineligible spouse, $375 for each ineligible child, $750 for one ineligible parent, and $1,125 for two ineligible parents. (Different income allocation rules apply to sponsors of aliens.) Finally, SSA charges the remaining countable income of the deemor (if any) to the eligible individual's unearned income and then applies the normal income counting rules to determine SSI eligibility and the amount of the payment. Under deeming, the countable resource limits are $3,000 for an eligible individual with an ineligible spouse, $4,000 for an eligible child with one ineligible parent, $5,000 for an eligible child with two ineligible parents, $2,000 for an alien with an unmarried sponsor, and $3,000 for an alien with a married sponsor. For more information on deeming, see Virginia Commonwealth University's National Training and Data Center's page titled, "Understanding the Supplemental Security Income (SSI) Program."

Residency Requirements

To qualify for SSI, individuals or couples must reside in United States, which the program defines as the 50 states, the District of Columbia, and the Commonwealth of the Northern Mariana Islands. People residing in Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, or any other territory or possession of the United State (other than the Northern Mariana Islands) are considered to be residing outside of the United States and thus are ineligible for SSI. However, residents of these territories may become eligible for SSI if they move to one of the 50 states, the District of Columbia, or the Northern Mariana Islands, establish residency there, and meet the physical presence requirement.

Individuals or couples are generally ineligible for SSI for months in which they are not physically present in the United States (as defined above). A person who leaves the United States for 30 consecutive days or more is treated as remaining outside the United States until he or she has returned to and remained in the United States for a period of 30 consecutive days. The physical presence requirement does not apply to blind or disabled children of military personnel assigned to permanent duty ashore outside the United States or to certain students who are temporarily abroad.

Citizenship Requirements

In addition to the residency requirement, a person must be a citizen or national of the United States or an eligible noncitizen. For the purposes of this report, an eligible noncitizen is an alien who (1) has been granted a qualifying legal status by the federal government (i.e., is a qualified alien ) and (2) meets certain other requirements. As a result of changes made to federal law under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA; P.L. 104-193 ) as well as legislation enacted shortly thereafter, SSI eligibility for noncitizens is limited largely to lawful permanent residents (LPRs, also known as green card holders ) with significant past work history in jobs covered by Social Security, "grandfathered aliens" who received SSI when PRWORA was enacted, certain aliens who are exempted by law from PRWORA's requirements, and refugees and asylees. Eligible noncitizens do not include aliens who are not authorized to be present in the United States (i.e., "illegal aliens"), nor do they include aliens with certain types of legal (or quasi-legal) status. For example, SSI is not available to aliens lawfully admitted to the United States on tourist visas or to beneficiaries of the Deferred Action for Childhood Arrivals (DACA) policy.

Eligible noncitizens are often classified into two groups: (1) those without a time limit and (2) those subject to a seven-year limit. Eligible noncitizens without a time limit include, but are not limited to, the following categories:

LPRs who (1) have satisfied a five-year waiting period requirement from the date of entry and (2) have 40 qualifying quarters of coverage from earnings based on Social Security-covered work (or can be credited with such qualifying quarters from a parent or spouse); qualified aliens who are (1) active duty military members, (2) honorably discharged veterans, or (3) the dependents of active duty military members or honorably discharged veterans; qualified aliens who are lawfully residing in the United States and were receiving SSI on August 22, 1996; qualified aliens who were lawfully residing in the United States on August 22, 1996, and who meet SSI's blindness or disability standard, regardless of the onset date; American Indians born in Canada who are admitted to the United States under certain conditions; and American Indians who are members of federally-recognized tribes and who meet certain conditions.

Eligible noncitizens subject to a seven-year limit from the date their status was acquired include, but are not limited to, the following categories:

refugees and asylees who meet certain conditions; Cuban/Haitian entrants and Amerasian immigrants who meet certain conditions; quailed aliens whose deportation is being withheld or whose removal has been withheld (subject to certain conditions); Iraqi or Afghan nationals who are admitted to the United States under special immigrant visa (SIV) programs; and aliens who are deemed to be victims of severe forms of human trafficking and who meet certain other conditions.

In December 2016, eligible noncitizens made up 6.1% of the total SSI recipient population. About 11% of all noncitizen recipients received time-limited payments. The average federally administered payment made to all noncitizen recipients that month was $510. Roughly 71% of all noncitizen SSI recipients were aged 65 or older, and about 58% of all noncitizen recipients resided in the United States for at least 10 years before applying for SSI. Since the enactment of PRWORA, both the number and share of noncitizen SSI recipients has fallen.

Other Requirements

Residents of public institutions (such as a jail, prison, or other facility operated directly or indirectly by a governmental entity) are ineligible for SSI for any month throughout which they reside in such institution. In other words, a person is ineligible to receive SSI for any full calendar month in which they are in residence. This requirement does not apply to publicly operated community residences that serve 16 or fewer residents. It also does not apply to medical treatment facilities in which more than 50% of the cost of care is paid for by Medicaid or, in the case of a child under 18 years old, by any combination of Medicaid and private health insurance. In addition, a person is required to file for all other applicable benefits for which he or she may be eligible. Furthermore, a person must not be fleeing to avoid (1) prosecution for certain felonies, (2) custody or confinement after conviction for certain felonies, or (3) recapture because of escape from custody. Finally, a person must allow SSA to contact his or her financial institutions for purposes of determining or redetermining eligibility.

Termination Events

In general, SSI payments are suspended for any month during which a recipient fails to meet the aforementioned eligibility requirements. After 12 consecutive months of payment suspension, most recipients are terminated from the SSI rolls and must file a new application. In 2016, the SSI termination rate—the ratio of the number of terminations to the average number of SSI recipients during the year for a given age group—was 7.7% for children and 10.0% for working-age adults ( Table 4 ). In 2016, the majority of SSI terminations for children were due to excess income or no longer meeting the applicable definition of disability. For working-age adults that year, most terminations were due to excess income or death.

Cash Payments

Federal Benefit Rate (FBR)

In 2018, the federal benefit rate (FBR) is $750 per month for an individual living in his or her own household and $1,125 per month for a couple living in their own household. On an annualized basis, the FBR in 2018 is $9,000 for an individual and $13,500 for a couple. Individuals and couples with no countable income receive the maximum SSI payment; those with countable income below the applicable FBR have their SSI payment reduced so that their own income plus the reduced SSI payment equals at least the FBR. In this way, the FBR acts as an income floor, providing a minimum level of support in 2018 equal to at least 74% of the federal poverty level (FPL) for an individual and 82% of FPL for a couple. As noted earlier, the FBR is adjusted annually for inflation by the same COLA applied to Social Security benefits. The COLA effective for SSI payments at the start of 2018 was 2.0%, which raised the FBR for an individual from $733 to $750 per month and the FBR for a couple from $1,103 to $1,125 per month.

State Supplementary Payments (SSPs)

Some states complement federal SSI payments with state supplementary payments (SSPs) that are made solely with state funds. SSPs are intended to help individuals whose basic needs are not met fully by the FBR. States may provide SSPs to all SSI recipients, or they may limit payments to certain recipients, such as blind individuals or residents of domiciliary-care homes. Currently, 43 states and the District of Columbia have optional state supplementation programs . Most states are required to continue to operate mandatory minimum supplementation programs for certain individuals who were converted to SSI in 1974 from the former federal-state cash assistance programs for the aged, blind, and disabled. North Dakota, the Northern Mariana Islands, and West Virginia do not operate any supplementation programs.

States may self-administer their supplementation programs or contract with SSA for the agency to issue SSPs to eligible recipients on the states' behalf. In states that contract with SSA to administer their supplementation programs, SSI recipients receive a single payment composed of the federal SSI payment and the SSP. In states that self-administer their supplementation programs, SSI recipients receive separate payments for SSI and SSP. States that elect federal administration of their supplementation program reimburse SSA for the cost of the SSPs that the agency makes to eligible recipients on behalf of the state. Since FY1994, SSA has charged participating states for the cost of administering their program by assessing a user fee on each SSP made by the agency based on a fee schedule prescribed in federal law.

SSA administers optional SSPs for all (or nearly all) SSI recipients in California, New Jersey, Nevada, and Vermont. The agency also administers optional SSPs for a small number of SSI recipients in special living arrangements (e.g., domiciliary care homes, medical treatment facilities) in the following areas: Delaware, the District of Columbia, Hawaii, Iowa, Michigan, Montana, Pennsylvania, and Rhode Island. In December 2017, almost 1.5 million individuals received a federally administered SSP from SSA, approximately 84% of whom lived in California. All other SSI recipients live in states that (1) self-administer SSPs for their living arrangement, (2) do not provide SSPs for their living arrangement, or (3) do not operate an optional supplementation program at all. SSA stopped publishing data on SSI recipients who receive state-administered SSPs in 2011. Of the 44 areas that operated optional supplementation programs in 2017, only 22 provided SSPs to SSI recipients living in their own household, which is the most frequent type of living arrangement for SSI recipients.

Basic Payment Calculation Example

As noted earlier, certain income is disregarded in determining SSI eligibility and the amount of assistance. For example, the program excludes the first $20 per month of any income (earned or unearned) and the first $65 per month of earned income plus one-half of any earnings above $65. After the application of the $20 general income exclusion, the offset for unearned income is $1 for $1; in other words, the SSI payment is reduced by one dollar for each dollar of unearned income. For earned income above $65 (or $85 if the individual has no unearned income), the offset is $1 for $2; that is, the SSI payment is reduced by one dollar for every two dollars of earned income. Income used for certain expenses is also excludable.

Table 5 shows an example of how a SSI payment is calculated for an individual living in his or her own household who receives a $361 monthly SSDI benefit and has earnings of $289 each month. The $20 general income exclusion is first applied to unearned income, meaning that only $341 of the SSDI benefit is countable. Next, the $65 earned income exclusion is applied to the $289 in earnings; the remaining $224 in earnings is counted on a 50% basis (i.e., a $1 for $2 offset). Finally, earned and unearned countable income are summed and then subtracted from the $750 FBR, which results in a monthly SSI payment of $297.

Gross Income Breakeven Points

Individuals are ineligible for a monthly SSI payment if their countable income reduces the FBR to $0. The amount of gross income a person can have so that countable income equals the applicable FBR is known as the income breakeven point . The dollar amount of the breakeven point in 2018 depends on the type of other income that an individual or couple receives. If a person has only unearned income, the unearned income breakeven point is $770 per month for an individual and $1,145 for a couple (i.e., the applicable FBR plus the $20 general income exclusion). However, if the person has only earned income, the earned income breakeven point is $1,585 per month for an individual and $2,335 for a couple (i.e., 2 x the applicable FBR plus the combined $85 earned income exclusion). Depending on the composition of other income, a person who receives both earned and unearned income in 2018 faces a breakeven point somewhere between $770 and $1,585 per month for an individual and between $1,145 and $2,335 per month for a couple. However, most people who receive SSI have no other income, and of those recipients who do, only about 3% have any earnings from work in a given month.

Reduced SSI Payment for Residents of Certain Medical Facilities

Residents of public institutions are generally ineligible for SSI payments, because the institution provides for their basic needs. However, residents of medical treatment facilities in which more than 50% of the cost of their care is paid for by Medicaid (or in the case of a child under 18 years old, by any combination of Medicaid and private health insurance) are eligible for a reduced SSI payment of no more than $30 per month (or $60 per month for couples in certain situations). The reduced SSI payment, which is also known as a personal needs allowance , is used to pay for small comfort items not provided by the facility. Any countable income reduces the $30 payment for institutionalized individuals; however, the full FBR is used in determining their eligibility for SSI ($750 per month for an individual in 2018). The reduced SSI payment is not indexed to inflation and has remained at its current level since July 1988. In December 2016, 1.5% of SSI recipients received institutional care in an approved medical facility.

Average and Total Monthly Payment Levels

As shown in Table 6 , the average SSI payment in December 2017 was $542, which on an annualized basis was $6,504. That month, SSA made about $4.7 billion in payments. These amounts include federally administered SSPs but exclude state-administered SSPs. Payments are generally lower for seniors because some of them receive Social Security, which is counted as unearned income against the FBR (or the FBR plus the amount of the applicable federally administered SSP). Payments for children are typically higher because they often do not have income of their own.

When SSI Payments Start

Unlike SSDI benefits, SSI payments are not subject to a waiting period requirement. SSI payments begin (1) the first day of the month following the date the application is filed, or (2) the first day of the month following the date the individual becomes eligible for payments. It is important to note that SSI recipients are not eligible for retroactive payments for months in which they met all other eligibility criteria prior to the month of application. Retroactive benefits are only available under the Social Security program. However, claimants may be owed past-due payments for months in which they met all eligibility requirements after the month they filed an application through the month their claim is approved.

Medicaid

In addition to cash payments, most SSI recipients qualify for health coverage under Medicaid. Established under Title XIX of the Social Security Act, Medicaid is a joint federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports (LTSS), to certain needy populations, including the aged, blind, and disabled. SSI recipients often have medical conditions that require significant health care resources. However, many SSI recipients are unable to work enough to gain health insurance through an employer or to pay for such insurance on their own. Medicaid provides most SSI recipients with health coverage, including some LTSS that private health insurance and Medicare do not cover, making it an important program for individuals with significant long-term care needs. In FY2015, estimated spending per disabled Medicaid enrollee under 65 years old (including children) was $19,500. In 2016, approximately 94% of SSI recipients aged 18-64 reported Medicaid coverage.

SSI is a mandatory Medicaid eligibility pathway, which means that states are required by law to cover SSI recipients. In general, individuals in receipt of SSI for a given month are also eligible for Medicaid for that month, provided they meet all other Medicaid eligibility requirements. SSI recipients typically become ineligible for Medicaid whenever their cash payments are suspended or terminated. However, states are afforded a certain degree of flexibility in this arrangement concerning (1) the Medicaid application process for SSI recipients and (2) the specific eligibility criteria applied to SSI recipients. Consequently, states are categorized into three groups with respect to Medicaid eligibility for SSI recipients:

states that use SSI's eligibility criteria and do not require a separate application (i.e., "1634 states"); states that use SSI's eligibility criteria but require a separate application (i.e., "SSI criteria states"); and states that use more restrictive eligibility criteria than SSI's criteria and require a separate application (i.e., "209[b] states").

The following subsections discuss the three groups in more detail.

1634 States

Thirty-four states and the District of Columbia grant Medicaid coverage automatically to individuals who become eligible for SSI. Section 1634 of the Social Security Act allows states to contract with SSA for the agency to perform Medicaid eligibility determinations for their SSI recipients as part of the SSI application process. In other words, an SSI application in these states is also an application for Medicaid. States that elect to contract with SSA for these Medicaid determinations are known as 1634 states . In December 2017, 85.8% of all SSI recipients resided in these areas.

SSI Criteria States

Eight states and the Northern Mariana Islands use the same income, resource, and disability standards of the SSI program to determine Medicaid eligibility for SSI recipients but require them to file a separate application for Medicaid with the state or local Medicaid office. States that elect this option are known as SSI criteria states . The eight SSI criteria states are Alaska, Idaho, Kansas, Nebraska, Nevada, Oklahoma, Oregon, and Utah. In December 2017, 4.8% of all SSI recipients resided in these areas.

209(b) States

The remaining eight states use more restrictive eligibility criteria than SSI's criteria to determine Medicaid eligibility for SSI recipients. Under Section 1902(f) of the Social Security Act, states may elect to use at least one eligibility criterion more restrictive than SSI's criteria in making Medicaid eligibility determinations for SSI recipients, provided any state-established standard is no more restrictive than the standards used by the state's Medicaid program in 1972. States that elect to apply more restrictive standards are known as 209(b) states , after the section of the Social Security Amendments of 1972 (P.L. 92-603) that established the option. The eight 209(b) states are Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, and Virginia. In December 2017, 9.4% of all SSI recipients resided in these areas.

209(b) states may use a stricter definition of blindness or disability, a lower income or resource standard, a less generous methodology for counting income or resources, or some combination of those factors. For example, New Hampshire imposes a longer duration-of-impairment requirement for individuals with a disability other than blindness (48 months instead of SSI's 12-month standard), while Virginia limits ownership of property contiguous to the individual's home (i.e., land other than the lot occupied by the home) to $5,000. However, 209(b) states that use a more restrictive income standard than the SSI program must deduct incurred medical expenses from an SSI recipient's income in determining Medicaid eligibility. This requirement allows SSI recipients to spend down their income to the state-established income standard.

Since the enactment of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended), three states have dropped their 209(b) status as part of larger efforts to reform their Medicaid programs. Specifically, Oklahoma elected to become a SSI criteria state effective October 1, 2015, while Indiana and Ohio elected to become 1634 states effective June 1, 2014, and August 1, 2016, respectively.

SNAP

Because SSI recipients are by definition low income, the Supplemental Nutrition Assistance Program (SNAP; formerly the Food Stamp Program) confers eligibility automatically to SSI eligible individuals in certain living situations. SNAP is a federally funded assistance program, administered jointly with the states, that provides benefits to eligible households on an electronic benefit transfer (EBT) card, which can be redeemed for foods at authorized retailers. Under SNAP law, individuals living in pure SSI households—those in which all members receive SSI payments—are categorically eligible for SNAP. SSI recipients living in mixed households may also qualify for SNAP if their household meets SNAP's traditional eligibility requirements. In 2016, an estimated 52% of SSI recipients aged 18-64 lived in households that received SNAP benefits. (California provides SSI recipients with a higher federally administered SSP in lieu of SNAP benefits.)

Financing

Federal SSI payments and administrative costs are financed from the general fund of the U.S. Treasury. SSPs are financed solely with state funds. States reimburse SSA for the cost of SSPs made to their eligible recipients and for the cost of administering their supplementation program. In FY2017, total federal SSI outlays were $58.7 billion, with $54.6 billion for benefit payments and $4.1 billion for administrative and other costs. Spending on federally administered SSPs in FY2017 was $2.6 billion. In 2016, about 93% of spending on federally administered SSPs was attributable to SSI recipients living in California.

In their August 2017 report and under current law, SSA's actuaries project that spending on federal SSI payments will increase (in CPI-indexed 2017 dollars) from $54.6 billion in 2017 to $61.5 billion in 2041. As a share of gross domestic product (GDP), SSA's actuaries project that spending on federal SSI payments will decrease from 0.28% in 2017 to 0.20% in 2041. Under its April 2018 baseline and under current law, CBO projects that spending on federal SSI payments will increase (in nominal dollars) from $54.6 billion in FY2017 to $80.8 billion in FY2028.

Concurrent Disability Beneficiaries

(Hereinafter the term SSDI beneficiary refers to disabled workers, disabled widow[er]s, and disabled adult children of retired, disabled, or deceased insured workers. In addition, the term SSI disability recipient refers to blind or disabled SSI recipients under 65 years old.)

In December 2016, about 12.8 million adults aged 18-64 received SSDI or SSI due to a qualifying impairment ( Figure 3 ). Of those, more than 1.3 million (or 10%) received both types of disability benefits. About one in seven SSDI beneficiaries aged 18-64 received SSI concurrently. At the same time, about a quarter of SSI disability recipients aged 18-64 also received SSDI. For this report, individuals who receive both SSDI and SSI due to a qualifying impairment are referred to as concurrent disability beneficiaries . Assuming they meet the applicable eligibility requirements, concurrent disability beneficiaries receive health coverage under Medicare and Medicaid. Individuals who qualify for both health care programs are known as dual eligibles .

The average combined benefit for concurrent disability beneficiaries in December 2016 was $783 ( Table 7 ). Of that amount, $538 was from SSDI and $245 was from SSI. Because average benefits for concurrent disability beneficiaries were below the FBR for an individual ($733 per month in 2016) and because SSDI benefits generally offset SSI payments on a dollar-for-dollar basis, combined benefit levels for each type of concurrent SSDI beneficiary were about the same. Thus, disabled workers (who have higher average SSDI benefit amounts) received lower average SSI payments, and disabled adult children (who have lower average SSDI benefit amounts) received higher SSI payments, resulting in roughly the same combined disability benefit amount across all three beneficiary types.

As shown in Figure 4 , the average benefit amount for concurrent disability beneficiaries is higher than that for SSI-only recipients but is lower than that for SSDI-only beneficiaries. The purpose of SSI for adults is generally twofold: (1) to provide cash assistance to aged, blind, or disabled individuals who have no income and (2) to supplement the incomes of those who have low Social Security benefits. For SSDI beneficiaries with minimal benefits and other income, SSI increases their overall monthly disability benefit from SSA.

Definition of Disability

SSDI and Adult SSI Claimants

SSDI and SSI use a total work-limiting definition of disability for adults; in other words, an individual's impairment(s) must significantly interfere with his or her ability to earn a living. Most adults are considered disabled for SSDI and SSI eligibility purposes if they are "unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months." Adults generally qualify as disabled for SSDI and SSI purposes if they have an impairment (or combination of impairments) of such severity that they are unable to perform any kind of substantial work that exists in significant numbers in the national economy, taking into consideration their age, education, and work experience. The work need not exist in the immediate area in which the claimant lives nor must a specific job vacancy exist for the individual.

Child SSI Claimants

The SSI program uses a special definition of disability for children because minors are generally not expected to work. Individuals under 18 years old must have "a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." Children typically qualify as disabled if they have a severe impairment (or combination of impairments) that limits their ability to engage in age-appropriate childhood activities at home, in childcare, at school, or in the community. In addition, the child must be unable to perform substantial gainful activity (SGA).

Substantial Gainful Activity (SGA) Earnings Limits

Under SSA's regulations for SGA, work activity is considered substantial if it involves doing significant physical or mental activities, even if it is done on a part-time basis. Work activity is considered gainful if an individual does it for pay or profit, regardless of whether the profit is realized or legal.

SSA uses a monetary threshold to determine whether an individual's work activity constitutes SGA, which the agency adjusts annually to reflect changes in national earnings levels. For SSDI, the SGA earnings threshold in 2018 is $1,180 per month for most individuals and $1,970 per month for statutorily blind individuals. Under the SSI program, SGA rules do not apply to statutorily blind individuals. Because of certain SSI work incentives, the non-blind SGA earnings threshold applies to individuals with a condition other than blindness only at the time of application for SSI.

The SGA threshold for blind individuals under the SSDI program is specified in statute, while the SGA threshold for non-blind individuals under the SSDI and SSI programs is specified in regulations by SSA. The SGA threshold for blind individuals under the SSDI program is adjusted annually for average earnings growth in the economy, provided a COLA is payable for that year. On the other hand, the SGA threshold for non-blind individuals under both programs is adjusted annually for average earnings growth in accordance with the agency's regulations, regardless of whether a COLA is payable for the year. Thus, in years when a COLA is not payable, the SGA threshold for blind individuals under the SSDI program remains the same as the amount for the previous year, while the SGA threshold for non-blind individuals is adjusted according to the formula specified in regulations, which may result in a higher threshold.

Drug Addiction and Alcohol (DAA)

Section 105 of the Contract with America Advancement Act of 1996 ( P.L. 104-121 ) amended the Social Security Act to bar SSA from considering an individual disabled if drug addiction or alcoholism (DAA) is a contributing factor material to the determination that the individual is disabled. SSA's policy interpretation of this requirement is specified in Social Security Ruling (SSR) 13-2p. DAA is a substance use disorder as defined in the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM). SSA considers an individual to have DAA if he or she has a medically determinable substance use disorder documented by objective medical evidence from an acceptable medical source. The DAA is considered material to the determination of disability if the individual would not meet the definition of disability if he or she were not using drugs or alcohol. It should be noted that nothing in the Social Security Act precludes an individual from qualifying for SSDI or SSI for using drugs or alcohol (including medical and recreational marijuana). The act simply prevents individuals from qualifying for benefits if their DAA is material to their disability determination or contributes to their inability to follow prescribed treatment (discussed below). In 2015, approximately 7.0% of all working-age SSDI beneficiaries and SSI disability recipients reported drug or alcohol abuse in the past 12 months.

Following Prescribed Treatment

The Social Security Act requires individuals to follow treatment prescribed from their medical source(s) if such treatment is expected to restore their ability to work (i.e., engage in SGA). If an individual fails to follow the prescribed treatment without good reason, SSA will not consider the individual to be disabled for purposes of SSDI or SSI. In some instances, the individual's DAA may interfere with his or her ability to follow prescribed treatment. A 2015 report from SSA's Office of the Inspector General (OIG) noted the following case:

An individual applied for disability benefits for seizures, high blood pressure, and poor eyesight. The medical evidence showed she was prescribed three doses of an anti-seizure medication per day; however, she only took two doses. She claimed she was taking only two doses to stretch the medication. However, because evidence in the file showed she was also using cocaine and marijuana, she had the means to purchase her medication as she had the means to purchase non-prescription drugs. The evidence showed that proper medication management should significantly reduce her seizure issues. Therefore, SSA denied the claim for failure to follow prescribed treatment.

Comparisons with Other Program Definitions of Disability

The definitions of disability under Titles II and XVI of the Social Security Act are considered total and long-term; neither program pays benefits to individuals with partial or short-term impairments. SSA's all-or-nothing definitions of disability are different from other disability standards. For example, the VA provides partial or total disability benefits to veterans with qualifying impairments on a scale from 0% to 100% (in 10% increments). In addition, state workers' compensation pays benefits for total or partial occupational-related injuries and illnesses that are permanent or temporary. According to SSA, the Social Security Act's "purpose and specific eligibility requirements for disability and blindness differ significantly from the purpose and eligibility requirements of other programs."

Application and Initial Determination Process233

The process begins when a claimant files an initial application for SSDI or SSI using one of four methods: (1) submitting an application in person at one of SSA's more than 1,200 nationwide field offices; (2) contacting a SSA teleservice representative over the phone and relaying the necessary information; (3) sending a paper application by mail; or (4) filing an electronic application on ssa.gov (for SSDI and certain concurrent claims only). If the agency requires more information to process the application, it will contact the claimant by phone or arrange for an in-person interview at the local field office. Claimants must inform and submit all evidence to SSA related to their impairment as a condition of their application for benefits.

Claims representatives at SSA's field offices screen claimants to make sure they meet the applicable non-medical entitlement factors. For SSDI, non-medical factors include disability-insured status, the work activity test (i.e., SGA earnings limit), and the claimant's relationship to certain family members. For SSI, such factors include income, resources, living arrangements, the work activity test (for non-blind claimants), citizenship, residency, and the requirement to apply for all other benefits. In general, claimants who do not meet the applicable non-medical entitlement factors are found to be ineligible for benefits and do not receive a disability determination. SSA field office personnel notify claimants whose applications are denied due to non-medical factors.

Applications that meet the applicable non-medical entitlement factors are forwarded to the disability determination services (DDS) office in the area that has jurisdiction for the disability determination (generally the state in which the claimant resides). DDSs, which are fully funded by the federal government, are state agencies tasked with reviewing the medical and vocational evidence and issuing the disability determination for SSA. Although DDS workers are state employees, they make the disability determinations based on federal law, regulations, and SSA's policy guidance. DDSs are located in the 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands, and they employ approximately 15,000 state workers.

The disability determination for both types of benefits is made based on evidence gathered in an individual's case record. Disability examiners—with the help of medical or psychological consultants (who are licensed physicians, psychiatrists, or psychologists)—typically use evidence collected from the claimant's own medical sources to evaluate the existence and severity of the claimant's impairment(s). However, if the medical evidence is unavailable or insufficient to make a determination, disability examiners can schedule a physical or mental examination or test from a medical source to obtain the necessary information. In such cases, SSA pays for the consultative examination (CE). The initial review generally does not involve a face-to-face meeting between the claimant and the adjudicator (i.e., the claim is decided based solely on the evidence in the claims file). After considering all medical and other evidence, the DDS agency issues a disability determination and returns the case to the SSA field office. If the claim is approved, the SSA field office sends out the initial award notice and begins processing the claim. If the claim is denied, the DDS agency prepares a personalized disability explanation and notifies the claimant of the decision.

Disability Determinations for SSDI and Adult SSI Claimants

The Social Security Act gives the Commissioner of Social Security broad authority to promulgate regulations specifying the standards, administrative requirements, and procedures used in conducting disability determinations. Under its regulations, SSA employs a five-step sequential evaluation process to determine whether a claimant's medical condition meets the definition of disability prescribed in the act for SSDI and adult SSI claimants ( Figure 5 ).

Each step in the process is followed in a set order. If SSA finds a claimant disabled or not disabled at a given step, the initial disability determination process is completed and a decision by the agency is made. If SSA cannot find a claimant disabled or not disabled at a given step, the agency proceeds to the next step.

Step 1. Work Activity Test

The SSA field office assesses whether a claimant's level of work activity constitutes SGA. In 2018, most claimants are found able to engage in SGA if their countable earnings average more than $1,180 per month. Countable earnings equal gross earnings minus applicable exclusions. Blind SSDI claimants are found able to perform SGA if their countable earnings average more than $1,970 per month. (SGA rules do not apply to statutorily blind SSI claimants.)

To determine countable earnings, SSA first documents a claimant's gross earnings for each month during the relevant period of work. The agency then considers whether the claimant's work was performed under any special conditions, such as in sheltered employment or under certain government-sponsored job training or employment programs. Earnings or other compensation derived from work performed under special conditions may be deducted (in part or in whole) from gross earnings. Reasonable costs for certain impairment-related work expenses (IRWE)—such as attendant care services or medical equipment—may also be deducted if the claimant needs such expenses to work. Once a claimant's countable earnings have been calculated and added together, SSA divides them over the number of months in the relevant review period to produce a monthly average. Claimants with countable monthly earnings at or below the applicable SGA limit proceed to the next step of the disability determination process. Those with countable monthly earnings above the applicable SGA limit are found not disabled, and their application is denied.

Step 2. Severity and Duration Test

The DDS agency determines whether available medical evidence establishes a physical or mental impairment (or combination of impairments) of sufficient severity to prevent the claimant from engaging in SGA and, if so, whether the impairment(s) can be expected to last for at least 12 months or to result in death. In making this determination, the DDS agency first verifies the existence of a medically determinable impairment using objective medical evidence (i.e., medical signs or laboratory findings) from the claimant's acceptable medical sources . A claimant is considered to have a medically determinable impairment if such evidence shows the existence of one or more anatomical, physiological, or psychological abnormalities.

Once a medically determinable impairment has been established, the adjudicative team evaluates the severity of the impairment using all available evidence, including medical opinions and statements of symptoms from the claimant. Symptoms , such as pain or fatigue, are considered if the objective medical evidence from acceptable medical sources shows that the impairment(s) could reasonably be expected to produce the symptoms. The DDS agency then evaluates the intensity and persistence of the claimant's symptoms to determine the extent to which such symptoms interfere with the claimant's ability to work. A claimant's impairment(s) is ultimately considered severe if it significantly limits his or her physical or mental ability to do basic work activities. Basic work activities include the following: walking, standing, sitting, lifting, pushing, pulling, reaching, carrying, or handling; seeing, hearing, and speaking; understanding, carrying out, and remembering simple instructions; use of judgment; responding appropriately to supervision, coworkers, and usual work situations; and dealing with changes in a routine work setting. A claimant's impairment(s) is considered not severe if it has only a "minimal effect" on his or her ability to perform basic work activities required in most jobs.

In evaluating the claim at Step 2, the DDS agency is required to consider the combined effect of all the claimant's impairments without regard to whether any such impairment, if considered separately, would be of sufficient severity. Thus, a claimant may meet the severity requirement if he or she has multiple non-severe impairments that when combined, have the same effect on the claimant's ability to function as a single severe impairment. Lastly, in addition to being severe, the claimant's medically determinable impairment(s) must be expected to result in death or have lasted or be expected to last for a continuous period of not less than 12 months. Claimants who meet the severity and duration requirements proceed to the next step. Those who do not are found not disabled and their application is denied.

Step 3. Medical Listings Test

At Step 3, the DDS agency determines whether the claimant's medically determinable impairment(s) meets the medical criteria of an impairment specified in SSA's Listing of Impairments (also known as the Blue Book ). The listings describe medically determinable impairments for each body system that the agency considers severe enough to prevent a claimant from performing any gainful activity, regardless of the claimant's age, education, or work experience. Most listed impairments are permanent or expected to result in death. All other listed impairments are expected to last for at least 12 months or for a specific duration.

The listings for adults (Part A) are categorized across 14 major body systems, with each category containing examples of common qualifying impairments as well as specific evaluative criteria for confirming their existence. Each listing outlines the impairments applicable to the body system, the medical and other documentation required to evaluate the claim, and the rules used to evaluate the specific impairment, including related symptoms, effects of treatment, and loss of function. For impairments that can be objectively measured, the listing may describe the minimum threshold for a particular diagnostic test. For those that are more subjective to measure, the listing may describe the minimum functional criteria. The listings were created to quickly screen relatively clear-cut cases, leaving adjudicators more time to evaluate more difficult cases at the latter stages of the process.

Claimants qualify at Step 3 of the disability determination process in one of two ways: (1) by meeting the criteria of a specific listing or (2) by equaling the criteria of a specific listing. For claimants to meet a listing , their medically determinable impairment(s) must satisfy all of the criteria described in the listing; a diagnosis alone is insufficient to meet a listing. In other words, claimants must have an impairment described in the listing, meet the objective medical and other findings, and meet the duration requirement.

If claimants are unable to meet a listing, they may be able to equal a listing if their medically determinable impairment(s) at least equals in severity and duration the criteria of any listed impairment. Specifically, if the claimant's impairment(s) is described in the listings but he or she does not exhibit one or more findings specific for the listing (or one of the findings does not meet the specified severity), the DDS will find the claimant's impairment(s) medically equivalent to the listing, provided the claimant has other findings related to his or her impairment(s) that are at least of equal medical significance to the required criteria. If the claimant's impairment is not described in the listings but is closely analogous to a listed impairment, the DDS will find the claimant's impairment(s) medically equivalent to the analogous listing if the findings related to the claimant's impairment(s) are at least of equal medical significance to those of the listed impairment.

Claimants with impairments that meet or equal a listing are found disabled and awarded benefits. Those with impairments that do not meet or equal a listing proceed to Step 4.

Step 4. Previous Work Test

Claimants with severe impairments that do not meet or equal a listed impairment proceed to an individual assessment that examines their remaining ability to work. To make this determination, the adjudicative team conducts a residual functional capacity (RFC) assessment, which is a function-by-function assessment of a claimant's ability to perform sustained, work-related physical or mental activities despite the limitations and restrictions caused by his or her medically determinable impairment(s). In general, RFC is a claimant's maximum remaining ability to do sustained work activities in an ordinary work setting on a regular and continuing basis (i.e., eight hours a day, five days a week, or an equivalent work schedule). The RFC assessment is based on all available evidence in the claimant's case record, such as objective medical evidence, activities of daily living (ADL), and statements provided by the claimant or other lay sources (e.g., family, friends, neighbors). In evaluating a claimant's RFC, the DDS agency considers the effects of pain and other symptoms, as well as any non-severe impairments, on the claimant's ability to function in a work setting.

Once the assessment is complete, the DDS evaluates the claimant's RFC with the physical and mental demands of his or her past relevant work. Past relevant work is defined as work performed in the past 15 years, at SGA, and which lasted long enough for the claimant to learn to do it. The individual's past relevant work need not exist in significant numbers in the national economy. If a claimant's medically determinable impairment(s) does not prevent him or her from performing past relevant work, the claimant is found not disabled and the application is denied. If the claimant is found unable to perform past relevant work, the case proceeds to the next step.

Step 5. Any Work Test

At the final stage of the disability determination process, the DDS agency considers whether the claimant can adjust to any other type of work. Specifically, the claimant must be unable to do not only his or her previous work but cannot, considering his or her age, education, and work experience, engage in any other kind of substantial gainful work that exists in the national economy. Work that exists in the national economy means work that exists in significant numbers either in the region where the claimant lives or in several regions of the country. It does not matter whether the work exists in the immediate area where the claimant lives, whether a specific job vacancy exists, or whether the claimant would be hired if he or she applied for such work.

At this stage, the DDS agency uses medical-vocational rules (also known as the grids ) to relate the claimant's age, education, and work experience to his or her RFC to perform work-related physical or mental activities. The grids cross-reference the aforementioned vocational factors by certain exertional (i.e., strength demands) and skill levels to determine the limitations and restrictions imposed by the claimant's impairment(s) and related symptoms. The DDS agency uses the Department of Labor's Dictionary of Occupational Titles (DOT) for information about the physical and mental demands needed for jobs in the national economy. Claimants with impairments that prevent them from adjusting to any other work that exists in the national economy are found disabled and awarded benefits. Claimants with impairments that allow them to adjust to a significant number of jobs in the national economy are found not disabled and their application is denied.

In general, older individuals (i.e., those aged 50 or older) who have limited education and work experience are more likely to be awarded benefits than younger individuals or those who have more education or work experience. For example, all things being equal, a 59 year old coal miner with an 8 th grade education and no other work experience is more likely to be awarded benefits than a 45 year old adjunct college professor who has worked several types of jobs in the past.

Disability Determinations for Child SSI Claimants

As noted earlier, because children are generally not expected to work, the SSI program uses a special definition of disability for minors. Individuals under the age of 18 must have a medically determinable physical or mental impairment, which results in marked and severe functional limitations , and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The first part of the disability determination process for child SSI claimants is similar to the one used for SSDI and adult SSI claimants ( Figure 6 ).

At Step 1, the DDS agency determines whether the child's countable monthly earnings average more than the non-blind SGA earnings limit. At Step 2, the DDS agency determines whether available objective medical evidence from acceptable medical sources establishes a medically determinable impairment, and, if so, whether all medical and other evidence demonstrates that such impairment (or combination of impairments) meets the severity and duration requirements. In determining the severity of the claimant's impairment(s), the DDS agency compares the claimant's functioning to that of children his or her own age who do not have impairments. A child's medically determinable impairment(s) is considered not severe if it is a slight abnormality (or a combination of slight abnormalities) that causes no more than minimal functional limitations. At Step 3a, the DDS agency determines whether the child's medically determinable impairment(s) meets or medically equals the criteria of a specific listing. The listings for children (Part B) are categorized across 15 major body systems and like their adult counterparts, contain examples of common impairment for each body system and specific evaluative criteria for confirming the existence of a qualifying impairment.

If a child has a severe impairment that does not meet or medically equal the criteria of a specific listing, then the case proceeds to Step 3b, where the DDS agency determines whether the impairment(s) results in limitations that functionally equal the listings. During this process, the DDS agency assesses the extent to which a child's impairment(s) limits or restricts his or her day-to-day functioning at home, in childcare, at school, or in the community. The DDS agency evaluates a child's functioning across six domains: (1) acquiring and using information; (2) attending and completing tasks; (3) interacting and relating with others; (4) moving about and manipulating objects; (5) self-care; and (6) health and physical well-being. These domains are cross-referenced by age categories that describe age-appropriate functioning and behavior.

At this stage, a claimant's impairment (or combination of impairments) is not evaluated against a specific listing. Rather, it is evaluated on the basis of whether it causes functional limitations that are of listing-level severity, regardless of the nature of the impairment(s). A child's impairment(s) functionally equals the criteria in the listings if it results in marked limitations in at least two of the domains or an extreme limitation in one domain. A marked limitation in a domain occurs when a claimant's impairment(s) interferes seriously with his or her ability to independently initiate, sustain, or complete activities. An extreme limitation in a domain occurs when a claimant's impairment(s) interferes very seriously with his or her ability to independently initiate, sustain, or complete activities. Children are awarded benefits if their impairment(s) meets, medically equals, or functionally equals the listings.

Appeals Process

Individuals who are dissatisfied with SSA's initial determination or decision may request further review under the Social Security Act's administrative and judicial review provisions. The appeals process affords claimants the opportunity to present additional evidence or arguments to support their case as well as to appoint a representative to act on their behalf, such as an attorney or a qualified non-attorney. The claimant, his or her appointed representative, representative payee, or other third party on behalf of the claimant can file a request for review. The request for further review must be made, in writing, within 60 days of the date the claimant received notice of the prior determination or decision (generally five days after the date on the notice), unless SSA determines that the claimant has good cause for failing to file a timely request. Claimants may file their appeal using conventional SSA forms or online via the iAppeals system.

SSA's administrative appeals process is generally composed of three levels of review: (1) reconsideration of the case by a reviewer who did participate in the initial determination; (2) a hearing before an administrative law judge; and (3) a request for review by the Appeals Council ( Figure 7 ). Individuals may elect to continue to receive benefit payment during this process under certain conditions. At each step of the appeals process, the decision-maker bases his or her decisions on provisions in the Social Security Act, SSA's regulations, and other agency guidance. Only after exhausting the administrative appeals process and receiving a final decision from SSA are claimants permitted to file a complaint against the agency in federal court. The following section describes each step of the appeals process in more detail.

Step 1. Reconsideration

In general, reconsideration is the first mandatory step of the administrative appeals process that a claimant must initiate in order to appeal an initial determination by SSA. Reconsideration involves a thorough review of all evidence in the case record from the initial determination, along with any additional evidence submitted by the claimant. Reconsideration is effectively a new review of the case by the same DDS office that conducted the initial determination except that it is performed by an official who did not participate in the initial determination. For cases involving the appeal of a medical determination, a new adjudicative team consisting of a disability examiner and a medical or psychological consultant reexamine the evidence from the initial determination and any new evidence submitted with the appeal. The team may request additional evidence or a new consultative examination. As with the initial level, the reconsideration level generally does not involve a face-to-face meeting between the adjudicator and the individual (i.e., case review ). However, if the individual received benefit payments (i.e., was a beneficiary or recipient) and contests an initial determination based on medical factors that he or she is not now blind or disabled, then the individual may request a disability hearing , which is a face-to-face reconsideration of the individual's last medical determination. After the review has been completed, the adjudicator makes a determination based on the preponderance of the evidence in the case record. The claimant is later notified of the decision in writing.

In 1999, SSA eliminated the reconsideration level in the following states as part of the Disability Redesign Prototype Model: Alaska, Alabama, California (Los Angeles West and North Branches), Colorado, Louisiana, Michigan, Missouri, New Hampshire, New York, and Pennsylvania. In these 10 states, claimants who appeal the initial determination skip the reconsideration level and proceed directly to the hearing level. As part of FY2019 President's budget request to Congress, the Trump Administration proposes to reinstate the reconsideration level in the 10 prototype states. In addition to the legislative proposal, officials from SSA's Office of Budget informed CRS that the agency plans to use its regulatory authority to gradually reinstate the reconsideration step in the 10 prototypes over the next several years.

Step 2. Hearing Before an Administrative Law Judge (ALJ)

The second mandatory step of the administrative appeals process (or the first mandatory step for those who reside in one of the prototype states) is to request a hearing before an administrative law judge (ALJ). An ALJ is an impartial hearing examiner who issues a de novo (i.e., fresh) decision with respect to the individual's claim for benefits. The hearing level is often the first time that a claimant has the opportunity to appeal his or her case face-to-face (either in person or via video teleconferencing). During a hearing, an ALJ investigates the merits of an appeal by informally questioning the claimant, as well as any scheduled witnesses such as medical or vocational experts. A claimant or his or her appointed representative may also present additional evidence, examine evidence used in making the determination under review, introduce witnesses, question witnesses, and present oral or written arguments in support of a favorable decision. In general, all evidence, objections, or written statements must be submitted to SSA at least five business days before the date of the hearing. Because SSA is not represented at the hearing, the proceeding is considered inquisitorial (i.e., non-adversarial). An ALJ issues a decision based on the preponderance of the evidence in the hearing record. In certain situations, the ALJ may dismiss a case without making a decision of its merits, such as when a claimant fails to appear for the hearing. The claimant is later notified in writing of the decision or dismissal.

Step 3. Appeals Council (AC)

The third mandatory step of the administrative appeals process is to request a review before the Appeals Council (AC). The AC is made up of administrative appeals judges (AAJs), appeals officers (AO), and support personnel. The AC reviews ALJ decisions and orders of dismissal, as well as processes certain court actions. The AC may dismiss or deny the request for review, or the AC may grant the request and either issue a decision or remand the case back to an ALJ for further proceedings. The AC may also review an ALJ decision or dismissal on its own motion within 60 days after the date of a decision or dismissal. Once the AC decides to review an ALJ decision on its own motion, it may affirm, reverse, or modify the decision (including a favorable decision) or remand the case back to an ALJ for further proceedings. The claimant is notified in writing of the AC's decision or reason for denial of the review.

Step 4. Federal Courts

Only after exhausting the administrative appeals process and receiving a final decision from SSA may a claimant request judicial review by filing a civil action in a federal court. The Social Security Act requires that such action be brought in the U.S. district court in the judicial district where the claimant resides (or has a principal place of business) or, if not applicable, the U.S. District Court for the District of Columbia. A district court may issue a decision or remand the case back to SSA for further action. Court remands are initially sent to the AC, which may assume jurisdiction and issue a decision or remand the case to an ALJ for further proceedings and a new decision. On rare occasions, disability cases are appealed beyond U.S. district court to the U.S. court of appeals and, ultimately, the U.S. Supreme Court.

Determinations of Continuing Eligibility

Continuing Disability Reviews (CDRs)

After SSA finds that a claimant is disabled, the agency evaluates his or her impairment(s) from time to time to determine if the individual is still medically eligible for payments on the basis of blindness or disability. This evaluation is known as a continuing disability review (CDR). The frequency of a CDR depends on the beneficiary's prospective medical improvement. SSA's regulations specify three basic types of schedules or di a ries .

Medical Improvement Expected (MIE). If medical improvement is expected, then SSA schedules a review at intervals from 6 to 18 months following the most recent decision that the individual is disabled or that disability is continuing. Examples of impairments that fall into this category include traumatic injuries and severe bone fracture. Medical Improvement Possible (MIP). If medical improvement is possible but cannot be accurately predicted based on current experience and the facts of the case, then SSA schedules a review at least once every three years. Examples of impairments that fall into this category include heart failure and severe diabetes with end organ damage. Medical Improvement Not Expected (MINE). If medical improvement is unlikely due to the severity of an individual's condition, then SSA schedules a review once every five to seven years. Examples of impairments that fall into this category include intellectual disabilities, amyotrophic lateral sclerosis (ALS) which is sufficiently severe, and Parkinson's disease which is sufficiently severe. Individuals who receive this classification are considered permanently disabled by SSA.

As shown in Figure 8 , few SSDI beneficiaries and SSI disability recipients are assigned a MIE diary.

SSA conducts two types of medical CDRs on individuals whose diaries mature: full medical CDRs and mailers. A full medical CDR involves SSA sending the case to the state DDS agency for a full medical review. A mailer is a questionnaire sent to the individual in order to obtain additional information, which SSA uses to determine if a full medical CDR is appropriate. If the answers to the mailer do not indicate likely improvement, SSA may defer a full medical CDR.

Under current law, SSA must find substantial evidence of medical improvement during a CDR to find a SSDI beneficiary or SSI disability recipient no longer disabled and therefore ineligible for benefits. The legal requirement for determining if disability continues during a CDR is called the medical improvement review standard (MIRS). Under a MIRS determination for adults, the agency generally considers a SSDI beneficiary or SSI disability recipient no longer disabled if the review finds considerable evidence that (1) there has been substantial medical improvement in the individual's impairment(s) related to his or her ability to work since the last favorable medical decision and (2) the individual has the ability to engage in SGA. For a child SSI recipient, SSA typically considers the child no longer disabled if the review demonstrates that there has been substantial medical improvement in the recipient's impairment(s) since his or her most recent favorable medical decision to the point in which the recipient's condition no longer meets or medically or functionally equals the severity in the listings. When a SSDI beneficiary or SSI disability recipient is found no longer disabled, he or she may appeal the decision using the process described previously.

Age-18 Disability Redeterminations

SSA reevaluates the eligibility of all child SSI recipients who attain the age of 18 under the adult standard for initial disability claims. These reevaluations are known as age-18 disability redeterminations . Because these reviews are a new disability determination under the adult criteria, the MIRS does not apply.

Work CDRs

Under the SSDI program, SSA performs work CDRs to determine if a beneficiary's work activity represents SGA and if eligibility for benefits should continue. SSA typically initiates a work CDR if the agency becomes aware of the beneficiary's return to work. If a work CDR finds evidence that a beneficiary is engaging in SGA and is not participating in an approved SSA work incentive, the agency may find that the beneficiary's disability has ceased.

SSI Redeterminations

Under the SSI program, SSA conducts periodic redeterminations of a recipient's non-medical eligibility factors—such as income, resources, and living arrangements—to verify that a recipient is still eligible for SSI and receiving the correct payment amount. There are two types of redeterminations: scheduled and unscheduled. Unscheduled redeterminations are conducted based on a report of a change in a recipient's circumstances that may affect program eligibility or payment amount. Scheduled redeterminations are performed at periodic intervals, depending on the likelihood of payment error: (1) annually if a change in a recipient's circumstances is likely to occur or (2) once every six years if a change in circumstances is unlikely to occur.

Appendix A. Side-by-Side of SSDI and SSI

Appendix B. Certain Other Benefits Available to SSDI Beneficiaries and SSI Disability Recipients

Individuals who meet the blindness or disability standards of the SSDI or SSI programs may qualify for certain federal or state benefits. The following section discusses two federal benefits for which SSDI beneficiaries and SSI disability recipients may qualify.

Achieving a Better Life Experience (ABLE) Accounts

The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE Act; Division B of P.L. 113-295 ) authorizes states to establish and maintain tax-advantaged savings plans through which contributions may be made to the investment account of a designated beneficiary to pay for qualified disability expenses. Qualified disability expenses include costs related to education, housing, transportation, employment training and support, assistive technology and personal support services, health and wellness (including long-term services and supports), financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses identified in guidance published by the IRS. To qualify for an ABLE account, an individual must either be (1) entitled to Social Security or SSI benefit payments due to blindness or disability and such impairment occurred before the date the individual attained age 26 or (2) certified by a physician that his or her impairment meets the blindness or disability standards used for children under the SSI program, regardless of the individual's age, and such impairment occurred before the date the individual attained age 26.

There are three advantages to ABLE accounts. First, earnings in an ABLE account can grow tax-free annually until they are withdrawn. Second, distributions (i.e., withdrawals) from an ABLE account are tax-free if they are used to pay for qualified disability expenses. Third, assets in and distributions from an ABLE account for qualified disability expenses are disregarded in determining a designated beneficiary's eligibility for and the amount of assistance provided by most federal assistance programs. Under the SSI program, however, only the first $100,000 in an ABLE account is excluded. The balance of an ABLE account above $100,000 is treated as a resource to the designated beneficiary and is counted against the program's resource limit. If a designated beneficiary becomes ineligible for SSI due solely to excess ABLE funds, his or her cash payments are suspended (without a time limit) until the balance of the ABLE account falls to or below $100,000. This suspension does not affect the beneficiary's eligibility for Medicaid. In addition, a distribution from an ABLE account for housing-related expenses is counted against the resource limit unless the distribution is spent in the month of receipt.

ABLE accounts allow SSI disability recipients to save for disability-related expenses without such savings jeopardizing their SSI and Medicaid eligibility. Although ABLE accounts have no effect on an individual's entitlement to SSDI, the accounts may allow beneficiaries to save and establish or maintain their eligibility for other federal programs, such as Medicaid or SNAP. The Social Security Administration (SSA), the Centers for Medicare & Medicaid Services (CMS), and the Department of Agriculture's Food and Nutrition Service (FNS) have all issued guidance on the treatment of ABLE accounts under SSI, Medicaid, and SNAP, respectively.

Total and Permanent Disability (TPD) Discharge of Certain Federal Student Loans

SSDI beneficiaries and SSI disability recipients may have their federal student loans discharged if they meet the requirements of the Department of Education's (ED's) Total and Permanent Disability (TPD) discharge program. The TPD discharge applies to obligations incurred under the following federal student loan programs: William D. Ford Federal Direct Loan (Direct Loan) program, the Federal Family Education Loan (FFEL) program, the Federal Perkins Loan program, and the Teacher Education Assistance for College and Higher Education (TEACH) Grant program. Borrowers qualify for the TPD discharge if they are determined to be totally and permanently disabled under any one of the following methods.

VA Method. The borrower receives Department of Veterans Affairs (VA) disability compensation at the 100% rate due to one or more service-connected disabilities that the VA determined to be (1) totally disabling under its rating schedule, or (2) less than totally disabling under its rating schedule but which prevent the individual from establishing or maintaining substantially gainful employment (known as an individual unemployability [IU] rating). SSA Method. The borrower is entitled to SSDI or SSI and is scheduled to receive a medical review once every five to seven years (i.e., SSA assigns the individual a Medical Improvement Not Expected [MINE] continuing disability review [CDR] diary). Physician 's Certification Method. The borrower is certified by a physician that he or she is unable to engage in any substantial gainful activity due to any medically determinable physical or mental impairment that has lasted, or is expected to last, for at least 60 months or is expected to result in death (i.e., the individual meets the definition of disability for adults under the Social Security Act, except that the duration of the impairment must be for at least five years instead of one).

SSDI beneficiaries and SSI disability recipients with a MINE CDR diary may request a Benefits Planning Query (BPQY) statement from SSA to demonstrate to ED that their medical review is scheduled once every five to seven years. In July 2017, about 40% of all SSDI beneficiaries and SSI disability recipients had a MINE CDR diary (see Figure 8 ). SSDI beneficiaries and SSI disability recipients with a medical improvement expected (MIE) or medical improvement possible (MIP) CDR diary may still qualify for the TPD discharge if they are determined to be totally and permanent disabled under the VA method or the physician's certification method.

Borrowers awarded a TPD discharge based on a determination of totally and permanently disabled under the SSA method or the physician's certification method are subject to a three-year monitoring period from the date the discharge is initially granted. During the post-discharge monitoring period , the borrower is required to have annual earnings at or below the Department of Health and Human Services' (HHS's) poverty guideline for a family of two, regardless of his or her actual family size. ED will reinstate the loan obligation if the borrower fails to meet any of the TPD discharge program's requirements during the post-discharge monitoring period. The post-discharge monitoring period does not apply to borrowers awarded a TPD discharge based on a determination of totally and permanently disabled under the VA method. For more information on the TPD discharge program, including the monitoring period, visit http://www.disabilitydischarge.com .

Computer Matching Agreements between ED and Other Federal Agencies to Improve the TPD Discharge Process

Some disability advocates and Members of Congress have expressed concern that the TPD discharge process is "cumbersome," in that it requires borrowers to independently determine whether they qualify for the discharge and to coordinate the sharing of information between federal agencies to verify that they meet the applicable requirements. To address such concerns, President Barack Obama issued a memorandum in March 2015 that directed the Secretary of Education and the Director of the Office of Management and Budget (OMB), in consultation with the Commissioner of Social Security, to develop a plan to proactively identity student loan borrowers who receive SSDI and determine if they qualify for the TPD discharge. Later that year, ED released a report that, among other things, advocated for the streamlining of the TPD discharge process by having federal agencies coordinate their efforts to notify borrowers automatically of their potential eligibility for the discharge.

In April 2016, ED announced that it had conducted a data match with SSA to identify borrowers potentially eligible for the TPD discharge under the SSA method. The match identified 387,000 SSDI beneficiaries and SSI disability recipients with a combined loan balance of over $7.7 billion. Shortly thereafter, borrowers who were positively identified in the match received a customized letter from ED's TPD servicer, Nelnet, explaining their eligibility for the discharge and how to apply for it. The number of individuals identified in the data match represented about 3% of the total SSDI beneficiary and SSI disability recipient population in July 2016, and about 7% of the total population with a MINE CDR diary that month. According to the Government Accountability Office (GAO), as of July 31, 2016, "TPD discharge applications were sent to about 234,000 borrowers based on the data matching and slightly more than 19,000 applications had been submitted and approved."

In April 2018, ED announced that it would conduct a similar data match with the VA to identify borrowers potentially eligible for the TPD discharge under the VA method.

Recent Changes to the Federal Income Tax Treatment of Loans Discharged Under the TPD Discharge Program

Under prior law, the amount of student loan debt discharged under the TPD discharge program was included in the borrower's gross income for purposes of federal income tax in the year the discharge became final, which for borrowers approved under the SSA method or physician's certification method is at the close of the three-year monitoring period and for borrowers approved under the VA method is the date that ED approves the discharge. This resulted in some borrowers having markedly high taxable income relative to their income exclusive of the discharged student loan indebtedness for the tax year. However, during debate on the 2017 tax revision ( P.L. 115-97 ), the Senate incorporated some of the provisions of the Stop Taxing Death and Disability Act ( S. 405 ) into the legislation, which were ultimately enacted into law. Section 11031 of P.L. 115-97 excludes the amount of the discharged indebtedness under the TPD discharge from the definition of gross income for federal income tax purposes. These new provisions apply to loans discharged during the period from January 1, 2018, through December 31, 2025. Student loan debt discharged under the TPD discharge program may still be considered income for state income tax purposes.