Many North Carolina residents get confused about social security disability insurance and social security insurance. Although these are both federal programs, they do serve distinct purposes. Knowing the difference can help you determine which program you may qualify for.

The Social Security Administration created SSDI as a form of retirement compensation for U.S. employees. Funding for the program is the result of the Federal Insurance Contribution Act. It is better known as FICA, which legalizes the withdrawal of taxes from your paycheck. This money gets placed in a trust fund that is specifically used for funding Social Security and Medicare. When you reach the retirement age of 62 and older or become disabled, you can receive SSDI benefits. What you have paid into the system via the payroll tax determines the amount of SSDI you receive. Additionally, your surviving spouse and/or children 18 and younger can also receive a portion of your cash benefits.

SSI, on the other hand, is a need-based program. The money to fund this program comes from general taxes received as opposed to a payroll tax. Anyone who is 65 and older or disabled can receive these benefits. Federal and state laws determine the amount of your SSI payment. For example, circumstances such as who lives with you or your personal assets may affect the amount of your SSI benefits. Unlike SSDI, your family members are not eligible to receive any portion of your SSI payments.

Take note that this is general information used for educational purposes only and it is not legal advice.