Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility, Benefits, and Financing

Congressional research reportMay 16, 2018

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Social Security Disability Insurance (SSDI)

and Supplemental Security Income (SSI):

Eligibility, Benefits, and Financing

(name redacted)

Analyst in Income Security

May 16, 2018

Congressional Research Service

7-....

www.crs.gov

R44948

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

Summary

The Social Security Administration (SSA) is responsible for administering two federal

entitlement programs established under the Social Security Act 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 authorized

under Title II of the act 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 authorized under Title XVI of the act 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. 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.

SSDI is part of the federal Old-Age, Survivors, and Disability Insurance (OASDI) program,

commonly known as Social Security. OASDI benefits are based on an insured worker’s careeraverage earnings in jobs covered by Social Security and designed to replace a portion of the

income lost to a family due to the worker’s retirement, disability, or death. Workers become

insured against these events by acquiring a certain number of earnings credits during their careers

in covered employment or self-employment. The SSDI component of the program provides

benefits to disabled workers who are under Social Security’s full retirement age and to their

eligible spouses and children. The Old-Age and Survivors Insurance (OASI) component also

provides disability benefits to eligible disabled dependents of retired workers and to eligible

disabled 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. SSDI

and OASI disability benefits are paid from the Social Security trust funds, which are financed

primarily by payroll and self-employment taxes levied on the earnings of covered workers.

SSI is a federal assistance program that provides needy aged, blind, or disabled individuals with a

guaranteed minimum income to meet their basic living expenses. Although there are no work or

contribution requirements to qualify for payments, the program is based on need and therefore is

restricted to individuals with limited financial means. 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 the amount of other income that an individual receives. Some states supplement the

federal SSI payment with solely state funds. Unlike Social Security, SSI is financed by

appropriations from general revenues.

Most claimants are considered disabled for SSDI and SSI eligibility purposes if they are unable to

engage in any substantial gainful activity (SGA) by reason of any medically determinable

physical or mental impairment that is expected to last for at least 12 months or to result in death.

In 2018, the SGA earnings limit is $1,180 per month for most individuals. Claimants generally

qualify 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. If a claimant’s

application for benefits is denied at any point during the disability determination process, the

claimant has the right to appeal the determination or decision.

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

Contents

Introduction ..................................................................................................................................... 1

Social Security Disability Insurance (SSDI) ................................................................................... 1

Eligibility Requirements for Disabled Workers ........................................................................ 2

Disability-Insured Status ..................................................................................................... 2

Under the Full Retirement Age (FRA) ................................................................................ 3

Eligibility Requirements for Dependents and Survivors ........................................................... 4

SSDI Spouses ...................................................................................................................... 4

SSDI Minor Children .......................................................................................................... 4

SSDI Student Children ........................................................................................................ 5

SSDI Disabled Adult Children ............................................................................................ 5

OASI Disabled Widow(er)s ................................................................................................ 5

OASI Disabled Adult Children ........................................................................................... 6

Termination Events ................................................................................................................... 6

Cash Benefits ............................................................................................................................ 7

Social Security Benefit Formula ......................................................................................... 7

Maximum Family Benefit Limits ....................................................................................... 8

Workers’ Compensation and Public Disability Benefit (WC/PDB) Offset ......................... 8

Average and Total Monthly Benefit Levels ........................................................................ 9

When SSDI Benefits Start (The Five-Month Waiting Period) .......................................... 10

Exceptions to the Five-Month Waiting Period for Cash Benefits ..................................... 10

Retroactive Benefits .......................................................................................................... 10

Medicare...................................................................................................................................11

24-Month Waiting Period...................................................................................................11

Exceptions to the 24-Month Waiting Period ..................................................................... 12

Financing ................................................................................................................................. 13

Supplemental Security Income (SSI) ............................................................................................ 14

Eligibility Requirements ......................................................................................................... 15

Categorical Requirements ................................................................................................. 16

Financial Requirements .................................................................................................... 16

Countable Income Limits .................................................................................................. 16

Countable Resource (Asset) Limits .................................................................................. 19

Deeming of Income and Resources from Certain Close Family Members....................... 21

Residency Requirements ................................................................................................... 22

Citizenship Requirements ................................................................................................. 23

Other Requirements .......................................................................................................... 24

Termination Events ................................................................................................................. 25

Cash Payments ........................................................................................................................ 26

Federal Benefit Rate (FBR) .............................................................................................. 26

State Supplementary Payments (SSPs) ............................................................................. 27

Basic Payment Calculation Example ................................................................................ 28

Gross Income Breakeven Points ....................................................................................... 29

Reduced SSI Payment for Residents of Certain Medical Facilities .................................. 29

Average and Total Monthly Payment Levels .................................................................... 30

When SSI Payments Start ................................................................................................. 30

Medicaid.................................................................................................................................. 31

1634 States ........................................................................................................................ 31

SSI Criteria States ............................................................................................................. 32

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

209(b) States ..................................................................................................................... 32

SNAP ...................................................................................................................................... 33

Financing ................................................................................................................................. 33

Concurrent Disability Beneficiaries .............................................................................................. 34

Definition of Disability ................................................................................................................. 36

SSDI and Adult SSI Claimants ............................................................................................... 36

Child SSI Claimants ................................................................................................................ 36

Substantial Gainful Activity (SGA) Earnings Limits .............................................................. 37

Drug Addiction and Alcohol (DAA) ....................................................................................... 37

Following Prescribed Treatment ............................................................................................. 38

Comparisons with Other Program Definitions of Disability ................................................... 39

Application and Initial Determination Process .............................................................................. 39

Disability Determinations for SSDI and Adult SSI Claimants ................................................ 40

Step 1. Work Activity Test ................................................................................................ 41

Step 2. Severity and Duration Test .................................................................................... 42

Step 3. Medical Listings Test ............................................................................................ 43

Step 4. Previous Work Test ............................................................................................... 44

Step 5. Any Work Test ...................................................................................................... 44

Disability Determinations for Child SSI Claimants ................................................................ 45

Appeals Process ............................................................................................................................. 47

Step 1. Reconsideration ........................................................................................................... 48

Step 2. Hearing Before an Administrative Law Judge (ALJ) .................................................. 49

Step 3. Appeals Council (AC) ................................................................................................. 50

Step 4. Federal Courts ............................................................................................................. 50

Determinations of Continuing Eligibility ...................................................................................... 51

Continuing Disability Reviews (CDRs) .................................................................................. 51

Age-18 Disability Redeterminations ....................................................................................... 52

Work CDRs ............................................................................................................................. 53

SSI Redeterminations .............................................................................................................. 53

Figures

Figure 1. Social Security Beneficiaries, by Type, December 2017 ................................................. 2

Figure 2. SSI Recipients, by Eligibility Pathway and Age Group, December 2017 ..................... 15

Figure 3. SSDI Beneficiaries and SSI Disability Recipients Aged 18-64, December 2016 .......... 35

Figure 4. Average Monthly Benefit Amount for Disability Beneficiaries Aged 18-64,

by Type of Disability Beneficiary, December 2016 ................................................................... 36

Figure 5. Initial Disability Determination Process for SSDI and Adult SSI Claimants ................ 41

Figure 6. Initial Disability Determination Process for Child SSI Claimants ................................. 46

Figure 7. Appeals Process.............................................................................................................. 48

Figure 8. CDR Diary Classification for SSDI Beneficiaries and SSI Disability Recipients,

July 2017 .................................................................................................................................... 52

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

Tables

Table 1. Number and Share of Disabled Workers Terminated from SSDI and the Annual

Termination Rate, by Reason for Termination, 2016 ................................................................... 6

Table 2. Average and Total Monthly Benefit Amounts of SSDI and OASI Disability

Beneficiaries, by Type of Beneficiary, December 2017 ............................................................... 9

Table 3. Operations of the Social Security Trust Funds, 2017 ...................................................... 14

Table 4. Number and Share of Nonelderly Blind or Disabled SSI Recipients Terminated

and the Annual Termination Rate, by Age Group and Reason for Termination, 2016 ............... 25

Table 5. Calculating a SSI Payment .............................................................................................. 28

Table 6. Average and Total Monthly Payment Amounts of SSI Recipients, by Type of

Payment and Age Group, December 2017 ................................................................................. 30

Table 7. Number of Concurrent Disability Beneficiaries Aged 18-64 and Average Benefit

Amount, by Type of SSDI Beneficiary, December 2016 ........................................................... 35

Table A-1. Comparison of the SSDI and SSI Programs ................................................................ 54

Appendixes

Appendix A. Side-by-Side of SSDI and SSI ................................................................................. 54

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

Recipients ................................................................................................................................... 55

Contacts

Author Contact Information .......................................................................................................... 59

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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).1 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.2

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.3 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-asyou-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).4

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

See 2 U.S.C. §622 for the definition of entitlement authority.

Estimates calculated by the Congressional Research Service (CRS) based on a variety of data sources available on the

Social Security Administration’s (SSA) website. For purposes of these estimates, the term Social Security Disability

Insurance (SSDI) includes Social Security disability beneficiaries whose benefits are paid from the Old-Age and

Survivors Insurance (OASI) trust fund. In addition, the term qualified disabled individuals excludes SSI-only recipients

aged 65 or older. Congressional clients may contact the author for the specific methodology used in the calculations.

42 U.S.C. §§401 et seq. See CRS Report R42035, Social Security Primer.

SSA, Office of Legislation and Congressional Affairs (OLCA), 2018 Social Security/SSI/Medicare Information,

February 15, 2018, https://www.ssa.gov/legislation/2018%20Fact%20Sheet.pdf.

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.5 That same month, the

OASI component paid benefits to 1.2 million OASI disability beneficiaries.6

Figure 1. Social Security Beneficiaries, by Type, December 2017

Source: Congressional Research Service (CRS), based on Social Security Administration (SSA), Office of the

Chief Actuary (OCACT), “Benefits Paid by Type of Beneficiary,” https://www.ssa.gov/oact/ProgData/icp.html.

Notes: Subtotals may not sum to totals due to rounding. The term other auxiliaries refers to non-disabled

dependents and survivors under the Old-Age and Survivors Insurance (OASI) component of the program.

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.7

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

SSA, Office of the Chief Actuary (OCACT), “Benefits Paid by Type of Beneficiary,” https://www.ssa.gov/oact/

ProgData/icp.html.

Ibid.

Section 223(a) of the Social Security Act; 42 U.S.C. §423(a).

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

year, regardless of when the money is earned.8 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).9 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.10 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 40quarter period immediately before the onset of the disability.11 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.12 In 2017, SSDI provided disability insurance

coverage to 154 million workers, with about 89% of covered workers aged 21-64 insured for

SSDI.13

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 66.14 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.

SSA, OCACT, “Quarter of Coverage,” https://www.ssa.gov/oact/cola/QC.html.

SSA, OCACT, “National Average Wage Index,” https://www.ssa.gov/oact/cola/AWI.html.

Section 214(a) of the Social Security Act; 42 U.S.C. §414(a). See also 20 C.F.R. §404.110.

Section 223(c)(1) of the Social Security Act; 42 U.S.C. §423(c)(1). See also 20 C.F.R. §404.130.

Workers aged 24-30 need quarters of coverage (QCs) in at least one-half of the quarters in the period beginning with

the quarter after the quarter they attained the age of 21 and ending in the quarter in which their disability began.

Workers under 24 years old need at least six QCs in the 12-quarter period ending with the quarter in which they

became disabled. Blind workers are exempt from the recency-of-work requirement. Special rules apply to individuals

who become disabled again at age 31 or older after having had a prior period of disability established which began

before age 31. See SSA, How You Earn Credits, January 2018, https://www.ssa.gov/pubs/EN-05-10072.pdf.

SSA, OCACT, “Disability Insured Workers,” https://www.ssa.gov/OACT/STATS/table4c2DI.html, See also SSA,

OCACT, “Social Security Program Fact Sheet,” March 1, 2018, https://www.ssa.gov/oact/FACTS/.

Section 216(l) of the Social Security Act; 42 U.S.C. §416(l).

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.15 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.16 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.17

Divorced spouses must have been married to the worker for at least 10 years immediately before

the date the divorce became final.18

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.19 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.20 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

Section 202(b) and 202(c) of the Social Security Act; 42 U.S.C. §402(b) and 402(c). See also 20 C.F.R. §404.330.

Section 216(b)(2) and 216(f)(2) of the Social Security Act; 42 U.S.C. §416(b)(2) and 416(f)(2). See also 20 C.F.R.

§404.330(a)(1). To determine the validity of the marriage, SSA looks to the laws of the state (as interpreted by the

courts of that state) in which the insured worker is domiciled at the time of application. Alternatively, the relationship

requirement is met if, under state intestate law, the applicant would be able to inherit a wife’s or husband’s share of the

insured worker’s personal property if the insured worker were to die without leaving a will.

Section 202(b) and 202(c) of the Social Security Act; 42 U.S.C. §402(b) and 402(c). See also 20 C.F.R. §404.331.

Section 216(d) of the Social Security Act; 42 U.S.C. §416 (d). See also 20 C.F.R. §404.331.

Section 202(d)(1)(B)(i) of the Social Security Act; 42 U.S.C. §402(d)(1)(B)(i). See also 20 C.F.R. §404.350.

Section 216(e) and 216(h) of the Social Security Act; 42 U.S.C. §416(e) and 416(h). See also 20 C.F.R. §§404.354404.359. In determining a child’s relationship to an insured worker, SSA looks to the laws of the state (as interpreted

by the courts of that state) in which the parent is domiciled at the time of application. A child may qualify as an insured

worker’s child for purposes of entitlement to child’s insurance benefits if he or she would inherit the parent’s personal

property under state intestate law.

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

the worker or is receiving at least one-half of his or her support from the worker.21 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).22

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.23 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).24 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 postsecondary 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.25 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.26 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.27

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

20 C.F.R. §§404.360-404.366.

SSA, Program Operations Manual System (POMS), “GN 00306.001 Determining Status as Child,” August 30, 2016,

https://secure.ssa.gov/poms.nsf/lnx/0200306001.

Section 202(d)(1)(B)(i) of the Social Security Act; 42 U.S.C. §402(d)(1)(B)(i). See also 20 C.F.R. §404.350.

20 C.F.R. §404.367.

Section 202(d)(1)(B)(ii) of the Social Security Act; 42 U.S.C. §402(d) (1)(B)(ii). See also 20 C.F.R. §404.350.

Section 202(d)(5) of the Social Security Act; 42 U.S.C. §402(d)(5). See also 20 C.F.R. §404.352(b)(4).

Section 202(e) and 202(f) of the Social Security Act; 42 U.S.C. §402(e) and 402(f). See also 20 C.F.R. §§404.335404.336.

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.28 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.29 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.30 (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.31

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.

Table 1. Number and Share of Disabled Workers Terminated from SSDI and the

Annual Termination Rate, by Reason for Termination, 2016

Terminations

Reason for Termination

Total

Number

Termination Rate

820,372

100.0%

9.3%

Attainment of Full Retirement Age (FRA)

470,320

57.3

5.3

Death of Beneficiary

251,492

30.7

2.8

Return to Work

47,887

5.8

0.5

Medical Improvement

37,623

4.6

0.4

Other

13,050

1.6

0.1

Section 216(k) of the Social Security Act; 42 U.S.C. §416(k). See also 20 C.F.R. §404.335(a).

Section 216(d)(2) and 216(d)(5) of the Social Security Act; 42 U.S.C. §416(d)(2) and 416(d)(5). See also 20 C.F.R.

§404.336(a)(2).

Section 202(d)(1)(B)(ii) of the Social Security Act; 42 U.S.C. §402(d) (1)(B)(ii). See also 20 C.F.R. §404.350.

SSA, Office of Research, Evaluation, and Statistics (ORES), Annual Statistical Supplement, 2017, March 2018,

Table 5.A1.4, https://www.ssa.gov/policy/docs/statcomps/supplement/ (hereinafter “2017 Annual Statistical

Supplement”).

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

Source: Congressional Research Service (CRS), based on the following data sources: Social Security

Administration (SSA), Office of Research, Evaluation, and Statistics (ORES), Annual Statistical Report on the Social

Security Disability Insurance Program, 2016, October 2017, Table 50, https://www.ssa.gov/policy/docs/statcomps/

di_asr/2016/sect03f.html#table50; and SSA, Office of the Chief Actuary (OCACT), “Benefits Paid by Type of

Beneficiary,” https://www.ssa.gov/oact/ProgData/icp.html.

Notes: The term termination rate is the ratio of the number of terminations to the average number of disabledworker beneficiaries during the year. In 2016, the average number of disabled-worker beneficiaries was

8,862,068. The term return to work means that the disabled worker’s termination was due to monthly earnings

above the substantial gainful activity (SGA) threshold, which in 2016 was $1,130 per month for most workers.

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.32

Cash Benefits

Social Security Benefit Formula

Initial monthly Social Security benefits are based on an insured worker’s creditable, careeraverage 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).33 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).34 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).35

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).36

For termination data on SSDI dependents and OASI disability beneficiaries, SSA, ORES, Annual Statistical Report

on the Social Security Disability Insurance Program, 2016, October 2017, Table 50, https://www.ssa.gov/policy/docs/

statcomps/di_asr/2015/index.html (hereinafter “2016 SSDI Annual Report”).

CRS Report R43542, How Social Security Benefits Are Computed: In Brief. Earnings in years after the indexing year

are counted at their actual value.

Up to five of the worker’s lowest-earning years are dropped from the computation.

SSA, OCACT, “Benefit Formula Bend Points,” https://www.ssa.gov/oact/cola/bendpoints.html.

CRS Report 94-803, Social Security: Cost-of-Living Adjustments. Pursuant to the Department of the Treasury’s 2010

rule (75 Federal Register 80315), all federal benefit payments must be made via electronic funds transfer (ETF), unless

(continued...)

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.37 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.38 A different family maximum formula applies

to OASI disability beneficiaries.39

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.40 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.41

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.42 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

(...continued)

the individual can demonstrate hardship due to age, mental impairment, or geographic location. Social Security

beneficiaries receive their payments by direct deposit, either to a bank account or to a Direct Express® card account.

Section 203(a)(6) of the Social Security Act; 42 U.S.C. §403(a)(6). See also 20 C.F.R. §404.403d-1.

2016 SSDI Annual Report, Table 30.

Section 203(a)(1) of the Social Security Act; 42 U.S.C. §403(a)(1). See also 20 C.F.R. §404.403(d) and SSA,

OCACT, “Formula for Family Maximum Benefit,” https://www.ssa.gov/oact/cola/familymax.html.

CRS Report R44580, Workers’ Compensation: Overview and Issues.

Section 224 of the Social Security Act; 42 U.S.C. §424a. See also 20 C.F.R. §404.408 and SSA, How Workers’

Compensation and Other Disability Payments May Affect Your Benefits, https://www.ssa.gov/pubs/EN-05-10018.pdf.

Section 224(a)(2)(B) of the Social Security Act; 42 U.S.C. §424a(A)(2)(B). See also 20 C.F.R. §404.408(b).

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

offset no longer applies once the disabled worker attains FRA and converts to retired-worker

benefits.43 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.44 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.45

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).46 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.

Table 2. Average and Total Monthly Benefit Amounts of SSDI and OASI Disability

Beneficiaries, by Type of Beneficiary, December 2017

Type of Beneficiary

Number of

Beneficiaries

Average

Monthly

Benefit

Estimated Total

Monthly Benefits

(in thousands)

Social Security Disability Insurance (SSDI)

Disabled Workers

8,695,475

$1,197

$10,407,353

126,154

335

42,315

Minor Children of Disabled Workers

1,418,446

351

497,761

Student Children of Disabled Workers

47,920

499

23,898

Disabled Adult Children of Disabled Workers

123,257

493

60,782

10,411,252

$1,060

$11,032,075

Disabled Widow(er)s

258,286

729

188,404

Disabled Adult Children of Retired Workers

319,162

696

222,255

Disabled Adult Children of Deceased Workers

662,986

877

581,419

1,240,416

$800

$992,063

Spouses of Disabled Workers

Total

Old-Age and Survivors Insurance (OASI)

Total

Source: CRS, based on SSA, OCACT, “Benefits Paid by Type of Beneficiary,” https://www.ssa.gov/oact/

ProgData/icp.html.

Notes: Average and total monthly benefit amounts are rounded to the nearest whole dollar. Total monthly

benefits are derived by multiplying the number of beneficiaries by the unrounded average benefit amount. These

estimates are nearly identical to the rounded total monthly benefit data reported in Table 2 of SSA’s “Monthly

Statistical Snapshot.” Estimated data are used because the snapshot does not provide data for the same

beneficiary categories used in this report.

Section 201 of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act; Division B of P.L.

113-295) increased the age at which the offset no longer applies from 65 years old to full retirement age (FRA).

SSA, POMS, “DI 52105.001 Reverse Offset Plans,” February 12, 2018, http://policy.ssa.gov/poms.nsf/lnx/

0452105001. The reverse offset also applies to railroad sickness pensions administered by the Railroad Retirement

Board (RRB).

2016 SSDI Annual Report, Tables 1 and 31.

SSA, OCACT, “Benefits Paid by Type of Beneficiary,” https://www.ssa.gov/oact/ProgData/icp.html.

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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

For disabled workers47 and disabled widow(er)s,48 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).49

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.50 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.51 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.52

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.53 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

Section 223(a)(1) and 223(c)(2) of the Social Security Act; 42 U.S.C. §423(a)(1) and 423(c)(2).

Section 202(e)(1)(F)(i), 202(e)(5)(A), 202(f)(1)(F)(i), and 202(f)(5)(A) of the Social Security Act; 42 U.S.C.

§402(e)(1)(F)(i), 402(e)(5)(A), 402(f)(1)(F)(i), and 402(f)(5)(A).

See 20 C.F.R. §404.1807 and SSA, “Schedule of Social Security Payments,” https://www.ssa.gov/pubs/calendar.htm.

There is no statutory exception to the five-month waiting period for disabled adult children. Section 202(d) of the

Social Security Act (42 U.S.C. §402[d]) simply does not require claimants to serve a waiting period to be entitled to

child’s insurance benefits due to a disability. In the case of disabled adult child of a disabled worker, the disabled adult

child’s benefits start only after the disabled worker has satisfied the five-month waiting period requirement and is

entitled to disabled-worker benefits.

Section 223(a)(1) of the Social Security Act; 42 U.S.C. §423(a)(1). See also 20 C.F.R. §404.315(a)(4).

Sections 202(e)(4)(C), 202(e)(5)(A)(ii)(II), 202(f)(4)(C), and 202(f)(5)(A)(ii)(II) of the Social Security Act; 42

U.S.C. §§402(e)(4)(C), 402(e)(5)(A)(ii)(II), 402(f)(4)(C), and 402(f)(5)(A)(ii)(II). See also 20 C.F.R. §§404.335(c)(2)

and 404.336(c)(2).

Section 202(e)(5)(B) and 202(f)(5)(B) of the Social Security Act; 42 U.S.C. §402(e)(5)(B) and 402(f)(5)(B). See also

20 C.F.R. §§404.335(c)(3) and 404.336(c)(3).

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

application is filed.54 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.55

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.56 (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 $12,776.57

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.58 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 30th 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 25th month of disability benefit entitlement. Disabled adult children are not subject to the fivemonth 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 2016.59

Sections 202(e)(5)(A), 202(f)(5)(A), and 223(c)(2) of the Social Security Act; 42 U.S.C. §§402(e)(5)(A),

402(f)(5)(A), and 423(c)(2). See also 20 C.F.R. §§404.315(a)(4), 404.335(c)(2), and 404.336(c)(2).

See SSA, “Medicare Information,” https://www.ssa.gov/disabilityresearch/wi/medicare.htm.

42 U.S.C. §§1395 et seq. For more information on Medicare, see CRS Report R40425, Medicare Primer.

Medicare Payment Advisory Commission (MEDPAC), A Data Book: Health Care Spending and the Medicare

Program, June 2017, p. 21, http://www.medpac.gov/docs/default-source/data-book/

jun17_databookentirereport_sec.pdf. Estimate excludes spending on individuals under 65 years old who are entitled to

Medicare on the basis of end-stage renal disease (ESRD).

Section 226(b)(2)(A) of the Social Security Act; 42 U.S.C. §426(b)(2)(A). See also 42 C.F.R. §406.12.

CRS analysis of the 2017 Current Population Survey Annual Social and Economic Supplement (CPS ASEC).

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.60 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.61

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.62 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.63

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.64 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)65 or certain medical conditions caused by exposure to

qualifying environmental health hazards,66 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.67 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.

Section 226(f) of the Social Security Act; 42 U.S.C. §426(f). See also 42 C.F.R. §406.12(b)(1) and 406.12(b)(2).

Section 226(f) of the Social Security Act; 42 U.S.C. §426(f). See also 42 C.F.R. § 406.12(b)(3).

Section 226(e)(1)(B) of the Social Security Act; 42 U.S.C. §426(e)(1)(B).

Based on information provided to CRS by SSA on August 10, 2017.

Section 226(h) of the Social Security Act; 42 U.S.C. §426(h).

Section 226A of the Social Security Act; 42 U.S.C. § 426-1. ESRD is a stage of kidney impairment that appears to be

irreversible and permanent, requiring a regular course of dialysis treatments or a kidney transplantation to maintain life.

Section 1881A of the Social Security Act; 42 U.S.C. §1395rr-1. See SSA, “Libby,” https://www.ssa.gov/libby/.

42 U.S.C. §426-1(b) and 42 C.F.R. §406.13(e).

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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.68 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 $128,400.69 Of the 12.4%,

2.37% is allocated to the DI trust fund and 10.03% is allocated to the OASI trust fund.70 The two

trust funds are also credited with income from the taxation of a portion of some Social Security

benefits71 and from interest earned on special-issue U.S. securities held by the trust funds for

years when receipts exceeded outlays.72

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 2034.73

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.

26 U.S.C. §§3101, 3111, 1401, respectively.

SSA, OCACT, “Contribution and Benefit Base,” https://www.ssa.gov/oact/cola/cbb.html.

Section 201(a) and 201(b) of the Social Security Act; 42 U.S.C. §401(a) and 401(b). The allocation of the tax rate

between the OASI and Disability Insurance (DI) trust funds is scheduled to change in 2019. See SSA, OCACT, “Social

Security Taxes Rates,” https://www.ssa.gov/oact/progdata/oasdiRates.html.

Section 121(e) of the Social Security Amendments of 1983 (P.L. 98-21); 42 U.S.C. §401 note.

Section 201(f) of the Social Security Act; 42 U.S.C. §401(f).

U.S. Congress, House Committee on Ways and Means, The 2017 Annual Report of the Board of Trustees of the

Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 115th Cong., 1st sess., July

18, 2016, H.Doc. 115-54 (Washington: GPO, 2017), p. 3, https://www.ssa.gov/oact/tr/2017/index.html.

Congressional Research Service

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

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 CY2031.74

Under its April 2018 baseline, CBO now projects that the DI trust fund will be depleted in early

FY2025.75 Upon depletion, CBO projects that continuing revenues to the DI trust fund would be

sufficient to pay about 88% of benefits scheduled under law.

Table 3. Operations of the Social Security Trust Funds, 2017

(in millions of dollars)

Old-Age and Survivors

Insurance (OASI) Trust Fund

Disability Insurance

(DI) Trust Fund

Hypothetical Combined

OASDI Trust Funds

$706,505

$167,087

$873,592

Income from

Taxation of Benefits

35,877

1,973

37,850

Interest

83,231

1,888

85,119

$825,630

$170,951

$996,581

Benefit Payments

798,692

142,806

941,499

Administrative

Expenses

3,661

2,796

6,457

Transfers

4,316

207

4,522

Total Outlays

$806,669

$145,809

$952,478

Asset Reserves at

End of the Year

$2,820,309

$71,480

$2,891,789