The History of Social Security Disability

Social Security Disability

Social Security was originally a system of providing workers with a small retirement benefit. Since it first became law in 1935, Social Security has undergone many changes. In 1954, the first legislation was passed recognizing that a medical condition can lead to economic insecurity and potentially harm a worker's ability to collect their full Social Security retirement benefits. In essence, workers inability to work because of a disabling condition was no longer to be held against them when calculating their retirement benefit. 

The first monthly cash benefits began in 1956, and were only available to disabled workers who were between the ages of 50 and 65 and their disabled children. This was the beginning of Social Security Disability Insurance (SSDI). Over the following years, the scope of Social Security disability benefits grew to provide benefits to adults of all ages who suffer from a disability that maes them unable to do gainful work (or substantially gainful work) and to other dependents as well (such as spouses and nondisabled children).

The Social Security Disability Insurance (SSDI) program is funded through payroll taxes, which go into the Social Security Trust Fund. The payroll tax is often called the FICA tax, which stands for Federal Insurance Contributions Act. The FICA tax funds Social Security retirement, disability, dependents, and survivors benefits (RSDI) as well as Medicare benefits. Title II of the Social Security Act covers Social Security Disability Insurance.

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) is a program that provides cash benefits for elderly, blind, or disabled individuals who do not have economic resources and who have not worked enough to qualify for SSDI. The SSI program was established by President Nixon in 1972 as part of an effort to federalize the 50 states' various welfare programs for the blind, disabled, and elderly.

SSI is not paid out of the Social Security trust fund, but out of general government revenue. However, the Social Security Administration does manage the program, and uses the same definition of disability for both SSI and SSDI. The eligibilty rules are quite different than for SSDI and include very low income and asset limits. Title XVI of the Social Security Act covers Supplemental Security Income.