How Is Social Security Financed?
Social Security is financed through a dedicated payroll tax.
Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $106,800 (in 2010), while the self-employed pay 12.4 percent.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance (SSDI) is covered in the Social Security payroll tax. If you qualify for SSDI, the amount you receive is based on your work history. It will depend on how many years you have been working and how much money you paid in required Social Security payroll deductions. The more you earned, the more you paid into Social Security, so the larger your disability benefit will be. The amount you receive each month can range from a few hundred dollars to a few thousand dollars.
Supplemental Security Income (SSI)
Supplemental Security Income (SSI) benefits are different than SSDI benefits. The SSI program is administered by the Social Security Administration; however, payments are made from the US Treasury general funds, not the Social Security trust funds. SSI is a welfare type program that is intended for disabled, blind and aged individuals (and couples) that do not qualify for Social Security and have little or no income and assets. The amount available to those who qualify for SSI is a fixed amount and is the same for everyone. The monthly amount available for SSI Individuals in 2010 is $674. The monthly amount available for SSI couples in 2010 is $1,011.
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