You are here

Will inheritance affect my Social Security Disability Insurance (SSDI) payments?

Continued eligibility for Social Security Disability Benefits is dependent on many different factors. These include your ability to work, your living situation, and any income and resources you have earned. However, the two disability benefit programs—SSI and SSDI—vary. What may disqualify an SSI recipient may not disqualify and SSDI recipient. Today we will be answering a question about the effect of inheritance on a person’s Social Security Disability Insurance benefits.

If you have a question that you’d like us to address in a future blog post, please leave it in the comment section below or contact us through Facebook, Twitter, or Google+. Today’s question is:

Will inheritance affect my SSDI benefits?

If you are a Social Security Disability Insurance (SSDI) recipient and receive an inheritance, it will not affect your benefits. SSDI is not a needs-based program and is not contingent upon your unearned income—including inheritance.

The only income that may potentially affect your SSDI benefits is any wages that you earn through employment. If you engage in Substantial Gainful Activity (SGA), your monthly payments could be lowered or eliminated as a result. In 2014, SGA is considered to be earning $1,070 or more in one month. If you begin working while receiving SSDI benefits, then it is necessary to report this income to the Social Security Administration (SSA).

However, if you are receiving Supplemental Security Income (SSI) benefits and have recently inherited funds, your benefits may potentially be affected. This is due to the fact that the SSI program is based on financial need. Any income, earned or unearned, can affect your benefits. Therefore it is imperative to inform the SSA of any changes to your income. You have up to ten days following the end of the month in which the change occurred to report the change.

Comments

What happens when a person dies that's on retirement and has a son under18yrs old would that child still be eligible for any money and how much.

Hi Tracy,
Because you are on SSDI benefits, you will not have any issue with inheritances.

John Doe has been receiving SSI benefits for 12 years. 6 years ago, John's father died, his house was sold, John received $100,000 cash inheritance which he put into the bank in an interest bearing account. John consulted a CPA at the time of the inheritance asking whether he should advise SSI of the inheritnce. The CPA said "no". John did not report the inheritance and continued to receive SSI benefits including Medicaid and food stamps. Since the inheritance occurred, John did report the interest income from the bank account to SSI, indicating John did not try to hide the inheritance. Now, 6 years later, SSI noticed the interest income from the bank account, questioned John (who told them the truth). SSI cut off all benefits and is saying John has to reimburse for all benefits received since the inheritance. Is this correct? What is the CPA's position in this? Comments and guidance will be appreciated.

Hi E.J.,
Yes, John has become ineligible for SSI benefits due to the interest. If he were on SSDI benefits, this would not be an issue. I do not think the SSA will say that he is excluded from disqualification due to the CPA's false advice. He can consider suing the accountant, but I have no idea if this is a valid option or if he could make a case. It's likely the CPA made a genuine mistake and did not understand SSI benefits.

I am on ssdi, my father died in October, we have recently found out that my mother, his ex-wife is not in divorce decree to get the policy, so it is to be split up 4 ways, between me and my 3 siblings. Will this affect me? If so, what our my options?

Hi there,
So sorry to hear of your fathers' death. I do not think you have many options here. The only benefits you could be eligible for are the spousal benefit (around $200) and receiving any back pay he was entitled to. I don't think you can have it so one sibling receives more than the other or anything like that.

I am receiving SSDI benefits. I have some US savings bonds that were purchased for me as a baby. Do these have to be reported and will the amount be subtracted from my benefits?