Although you might think they are the same due to their similar names, there are some considerable differences between Social Security Disability Insurance (SSDI) and State Disability Insurance (SDI).
For starters, state disability insurance is more suited for short-term disability due to its duration of 6–8 weeks, whereas SSDI is a program that continues as long as you remain disabled. SSDI is administered by the Federal government, whereas SDI is administered by the state where you reside.
Keep reading below as we describe more differences between the two.
What You Need to Know
People commonly get the two types of disability insurance, Social Security Disability Insurance and State Disability Insurance, mixed up. California, Hawaii, New Jersey, New York, and Rhode Island are the five states that have obligatory state-mandated disability insurance.
Other states do not have these mandates. Insurance is required by law in Puerto Rico as well.
The Social Security Administration (SSA) is responsible for overseeing the management of SSDI on behalf of the federal government. Disabled workers who have contributed to the Federal Insurance Compensation Act (FICA) can get financial assistance if they become disabled.
In 2023, an individual’s monthly benefit might range from a few dollars to up to $3,627, based on their FICA contributions. The amount of the benefit could be raised if you have dependent children. Although it may come as a surprise to some, SSDI is not intended to replace lost income completely.
After receiving SSDI compensation for two years, an individual is also eligible for Medicare. The Social Security Administration allows recipients to continue receiving SSDI benefits until either their disability has improved or they are physically and mentally able to return to work.
A disabled individual who has reached the age of retirement can continue to receive the SSDI amount that they were receiving before retirement if this amount is higher than their retirement amount. Whatever your payment amount may be, the SSA will begin referring to these payments as retirement benefits.
It’s possible that state-run disability programs will differ throughout the states. The high cost of living in California, for instance, required the creation of the state’s own disability program. This is a short-term program that ends after 12 months at the most.
Even if you’ve been disabled for longer than a year, you won’t get any more money from the government. The program is managed by the Employment Development Department (commonly known as the “EDD”), which is a state organization that is also responsible for managing unemployment benefits.
SDI beneficiaries do not automatically qualify for health insurance through the program, but those who satisfy the income requirements can apply for Medi-Cal.
Although it is possible to apply for both SSDI and SDI at the same time, recipients should be aware that there may be a reduction in their total public assistance payments.
SSDI vs. SDI: Key Differences
If you are unable to hold down a job as a result of a severe illness or injury, you can collect benefits from both short-term disability insurance and Social Security disability insurance.
However, there are important distinctions between the two, such as:
- Who is in charge of the program’s administration?
- Details regarding your eligibility for assistance.
- How long do you have to wait to start receiving benefits?
- How much money can you get each month?
- How long do both programs last?
Administration
The Social Security Administration is responsible for administering SSDI. State Disability Insurance (SDI), sometimes known as Temporary Disability Insurance (TDI), is a disability insurance program that is administered by the state.
Eligibility
In order to qualify for benefits from the state’s disability insurance program, you must be working in the state and have either paid into the program yourself or had your employer do so on your behalf.
In order to qualify for SSDI, you must have worked and paid social security taxes during the last few years and for a minimum number of years (determined by your age).
Waiting Time
There is a waiting period before receiving both SDI and SSDI. While the wait time for SSDI is five months, it is only a week or so for SDI.
Duration of Benefits
Depending on where you live, your SDI benefits could last anywhere from six months to a full year. However, Social Security Disability Insurance payments may continue for as long as the recipient lives or until they reach retirement age.
Disability Benefits Payment Amount
You can receive anywhere from 60% to 70% of your pre-tax salary in SDI benefits. For instance, in California, the maximum weekly benefit under the California SDI is $1,620 ($7,020 monthly).
Very few people receive the maximum SSDI payout of $3,627 per month (for an individual), which is equivalent to around $837 per week.
Is It Possible to Receive Both Federal and State Disability Benefits?
You are eligible to claim disability payments if you become disabled and your condition is projected to last a year or lead to your death. You can rely on these benefits to help you make ends meet if you become unfit to continue working.
If you are disabled and meet the requirements set forth by Social Security, you may also be eligible for state payments.
The Social Security Administration (SSA) is a good resource for learning more about programs like:
- Medicaid.
- Supplemental Nutrition Assistance Program (SNAP, or “food stamps”).
- Temporary Assistance for Needy Families (TANF).
- State or regional assistance as determined by the need.
Will SDI Affect SSDI?
Your Social Security Disability Insurance benefit will have a portion of it deducted to account for the state disability benefits you receive. This type of reduction is referred to as an “offset.”
In order to determine the amount of the offset, Social Security will add together the monthly amount that you receive from SSDI (including any dependent benefits that your family may receive) and the monthly amount that you receive from SDI payments.
Social Security will reduce your SSDI payment by the amount by which your combined benefits exceed 80% of your average pre-disability earnings.
Social Security typically takes your highest-earning calendar year in the preceding five years to calculate your average monthly earnings prior to disability.
Let’s assume that your highest-earning year in the past five years brought in an average of $5,000 each month. You and your dependents can collect a total of $4,000 per month (80% of $5,000) in short-term disability and SSDI payments before reaching Social Security’s maximum limit.
Let’s assume your expected Social Security income, which includes payments for your dependent children, is $3,300 before any offsets. According to the state of California’s SDI calculator, a person living in that state with the same income level would receive a benefit of $693 per week, or about $3,000 per month.
Your combined monthly SSDI and SDI benefits would be $6,300 ($3,300 for SSDI and $3,000 for SDI).
Yet the sum of your benefits ($6,300) is greater than 80% of the average earnings ($4,000). As a result, your monthly Social Security check would be $2,300 less than it otherwise would be ($6,300 minus $4,000). Your monthly SSDI payout would be $1,000, and your monthly SDI payment would be $3,000.
It’s important to remember that any reductions to a disabled worker’s Social Security payments will first affect his or her family members’ benefits.
Does the SDI Offset Affect Retirement Benefits?
Retirement benefits from Social Security are exempt from the short-term disability offset. To avoid the Social Security Administration’s offset, those above the age of 62 or close to it may want to apply for retirement benefits early.
However, if you plan on collecting Social Security in retirement, you should know that retiring early will cut your monthly benefit. You ought to weigh the costs and benefits to find out if this is a good idea.
A Social Security office worker might be able to help you figure out whether or not retiring early will save you money.
Can You Receive Both State Disability and Private Short-Term Disability?
There are certain forms of short-term disability insurance that are not provided by the state. If you are unable to work due to an injury or sickness, you may be eligible for benefits from private short-term disability (STD) insurance.
The majority of short-term disability insurance policies will pay out approximately sixty percent of your salary for a maximum of approximately six months. After that time, a long-term disability insurance (LTD) policy may begin paying out benefits. You can get insurance through your work, or you can buy a policy on your own.
You can receive SDI benefits from your state agency in addition to STD coverage from an insurance company. However, insurance companies typically reduce STD payouts to account for SDI benefits.
Application Process for SDI and SSDI
If you’re disabled and in a position to receive SDI payments, you’ll need to make a claim with the appropriate state agency.
This is typically the labor department or a specialized disability insurance office (such as in Rhode Island, New Jersey, or California). However, in New York and Hawaii, you have to go through your employer to make a claim.
SSDI benefits are only available through the Social Security Administration, so make sure to apply there.
The Social Security Administration accepts disability claims in person at any of its local offices, over the phone by calling 800-772-1213 (TTY 800-325-0778), or through the agency’s online disability application.
You can file an appeal with Social Security if you believe your initial request for SSDI or SDI benefits was unjustly rejected or if you are receiving both SSDI and SSI and believe that too much is being deducted from each of your monthly payments.
In addition to that, you might want to think about seeking the assistance of a disability attorney.
Programs for Disabled Residents in Various States
Following are some state-run disability programs:
California State Disability Insurance
Benefits from California Disability Insurance are available to qualified California residents for a maximum of 52 weeks. A worker in California who suffers from an illness, injury, or pregnancy that is not work-related can enroll in this program.
You also need to have a certain type of employment history in order to qualify. In order to qualify, you must have earned $300 or more over the 12-month base period. The amount you receive each week cannot exceed $1,620, but it will be in the range of 60%–70% of your previous weekly salary.
Eligibility requirements also include being off work for eight days straight, receiving treatment from a doctor during that time, and waiting seven days without pay.
Hawaii State Disability Insurance
Those who have worked and received income in Hawaii but are temporarily disabled are eligible for Temporary Disability Insurance.
In order to qualify for these benefits, you must have worked in Hawaii for at least 14 weeks before your injury or illness and have been paid for at least 20 hours per week during that time.
Those who are eligible can receive up to $58 per week (based on a maximum weekly wage of $765) in benefits.
You are eligible to submit an application following a 7-day waiting period and have a good chance of being accepted if you are suffering from an injury or disease that prevents you from doing your regular job activities and are receiving treatment from a licensed physician or another healthcare professional.
New Jersey State Disability Insurance
The Temporary Disability Insurance program in the state of New Jersey provides its employees with benefits for a short period of time. Benefits in New Jersey might cover up to 85% of your regular income for up to 26 weeks.
The highest possible weekly payment, however, is set to be $1,025 in the year 2023.
You need to have worked for at least 20 weeks and made at least $260 per week, or $13,000 total, throughout your 12-month base period to be eligible. There is a 7-day waiting period before applications are accepted.
Conclusion
So, while there are significant differences between SSDI and State Disability, their essential purpose remains the same: to provide financial assistance to disabled people who are unable to work. Talk to a lawyer to find out whether or not you are eligible for both SDI and SSDI.
