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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

a friend is receiving SSI for disabilities, she may inherit a small house with 3 acres it sets on which she is living in now. she will receive no money just house and land it sits on will this affect her SSI payments, will land and house have to be survaded?

Hi Elizabeth. This will likely affect her payments. She should contact her SSA office and let them know about the inheritance. They will be able to give her a better idea of how it will impact her monthly payments.

No it should not affect her SSI. I have a relative in the same situation and his is not affected as long as he lives in the house and does not receive any monies per the attonery we consulted.

Hi Keleka,

This may not be necessarily true for everyone. If the inheritance increases the total asset value to more than $2,000, she may become ineligible for SSI. This is why many couples lose their SSI payments after moving in with a partner. It would not affect her if she received SSDI.

what if a person applies for SSI and is awaiting an award from a divorce settlement of over 100,000 does this person still qualify for the benefit

Hi Kathy,
It will not if you are receiving SSDI benefits. If you are receiving SSI benefits, you could potentially lose all of your benefits.

My father passed away leaving .5 acres with a home, the heirs are ten siblings which we each own a tenth. He had no money, A lien was put on the property going through probate. I paid off the debt to keep the property in agreement noon else wanted any part of it. Now my sister who is on SSI refuses to sign a quit deed because she was informed she needs to be disinherited from the inheritance. however the probate is closed. Is it not wise for her to sign the quit deed to transfer her shares to others in the family?

I receive SSI and SSA I am supposed to inherit some money, around 10.000. How will this effect my monthly checks? Also does a person stay on SSI and SSA the rest of their life or can they be moved to SSDI or when I turn 62 does it turn over to SS?

My husband is on SSDI (age 58) and is scheduled to receive proceeds from the sale of his Dad's home. Will the proceeds affect his SSDI benefits?

Your inheritance will not affect your SSDI benefits because the SSDI program is not a needs-based program and is not contingent upon your unearned income - including inheritance.

Having been on long-term disability for almost ten years and no probable cure, I need to know if this future inheritance should come lump sum or a form of monthly "allowance". Is there a better way for this to be handled for my long-term benefit? Everything is in a trust which may play into the matter. Thanks! steve alcorn

My cousin who lived in ma received ssi, her mom pass away 20 years ago and she inhered a house in Puerto Ricowith with her sister, the house still under her mother name, they renting the house and getting rent, now the house have 6 apartment and are rented, how this affect the one who gettin ssi. I thing they going to transfer the house under their name. I thing the sister in PR did not disclose this to SSI because they are commuting fraud are not reporting this to SS.

You should report them. They are most definitely committing fraud. It's people like your cousin who are bankrupting this much needed program!

This person should take care of their own business and stay out of this. People are killing others about are having them killed about money. You will be nowhere around to protect them. Why don't you get the information and report them. You do the dirty work.

Hi there, It may affect your SSI benefits. I would recommend contacting your local SSA official to find out how a land inheritance would affect need-based benefits.

Hi there, I am honestly not sure if he can refuse an inheritance and have it not count as income. I would recommend contacting your local SSA office to find out.

A special needs trust can be set up and the inheritance put there and it will not affect SSI. However, the money can only be used for covering medical or other needs. Check with a trust attorney for specifics.

my son has m.s. and is on ssdi. upon my death, my retirement is set up so that he receives a check every month thru my previous employer. will this affect his ssdi, in other words will his check from my retirement account count as income that could affect his ssdi. the reason i ask is that while on ssdi, his medical pays many thousands every month for his medication and he cannot afford to lose it, regardless of the new checks he will get upon my death.

Hi Stephen,

I don't think I have a solid answer for your specific case. If your son is on SSDI his benefits shouldn't be affected by additional survivor benefits, but you can read more about them here. I'd recommend contacting your SSA representative to find out more information on the mater though. Best of luck to you.

My mom is currently receiving SSDI, my dad is coming into an inheritance and is wondering if it will affect my mom's SSDI

Hi Kaity, Inheritances do not affect SSDI benefits, as SSDI payments are work-based, not need-based.

My mother receives SSDI benefits and is set to receive mineral royalties for about 5K lump payment for oil taken from under the family farm by a large oil company through a gas lease. Is this considered unearned income that will NOT affect her SSDI benefits? It is very hard to find information on the Social Security Administrations website on this topic and the web has conflicting information. Thank you.

Hi Dean, I also do not have a solid answer for you. Inheritances do not affect SSDI payments, but I have no idea if your situation would count as an inheritance. I'd speak with a SSA representative in your area to learn more.

I have a sister that was in a car wreck when she was 25 years old and broke her neck and will never regain full use of her hands. She was on SSI and received $694 monthly and a medical card. Her husband by law passed away in June 2014 and left her his KPERS and some insurance money. She lost her SSI benefits and her medical card and she has many health problems. Can they take her medical card from her since she is disabled? I can understand her monthly check she was getting but how can they take her medical card from her when she is still physically disabled? Her spinal cord is shrinking and she has other health issues needing addressed which would include chemo treatments but with no health insurance nobody will help her. Can they take her medical coverage like they did and if so any suggestions on how she can get help with her medical issues? Trying to buy insurance coverage would cost her an arm and a leg, I just don't understand how they can take medical coverage from someone who is disabled. Can anyone give me some insight on this or direct me to who I can contact? The Social Security Administration in her county is of no help and I believe they are crooked although I have no proof. I just know something is just not right with her situation. Thank you so much...Julie C

Hi Julie, I am really sorry to hear that. It may be possible for her to apply for Medicaid and being receiving benefits again. Medicaid is automatically given to SSI recipients, which is probably why it was taken away when she lost SSI. When the healthcare reform rolled out, some states chose to expand Medicaid, and some did not. If your sister lives in one of the expanded states and earns less than $16,000 per year, she will be able to apply for Medicaid. Your sister can find out if her state expanded its Medicaid coverage here.

Hi Karen,

This will depend on whether or not your friend receives SSDI or SSI. If your friend receives SSDI, an inheritance will not affect her at all. If your friend receives SSI, an inheritance will affect her payments. Depending on how much she receives, she may lose her SSI payments completely.

Hi Alyssa,
This can become a sticky situation, so I would highly advise that you contact the SSA before doing anything. If the inheritance does not affect you at all and you do not go over your means limit, then you should be able to keep your SS benefits. But the SSA does also penalize beneficiaries for activities like selling your care for less than its actual value, so it's always best to be 100% honest with the SSA and contacting them first! Their number is 1-800-772-1213

Hi Elaine, Yes, SSDI payments are work-based, not need-based. This means you can receive inheritances without worrying about them affecting your payments, and you can purchase land or property with the inheritances.

My sister receives SSDI and recently received an inheritance as a beneficiary to an estate. The money is set up in a trust fund as a "special needs" account assuring her proper care for the rest of her life. Is she required to pay taxes on that money? Or is there anything she needs to know? Please help.

Hi Karen,

I do not believe the inheritance will be taxes, even if it grows over time. The SSA considers an inheritance an unearned income for people receiving SSDI benefits. You can call the SSA to be sure at 1-800-772-1213.

I just recently qualified to receive ssdi and will receive my first payment in March 2015. I am also awaiting a couple of small payments from a lawsuit for work done prior to my disability approval going back two or three years. will this affect my ssdi

Hi there,
It is likely that the SSA will reduce your benefit payments when you receive the lawsuit settlements to offset the additional funds.

I f my friend inherates a home and lives it i think he will be ok bieng on SSI, can the title also go in his name? what about the funds with his Inheritance can that effect his medical?

Hi Josie,
Inheritances on SSI can be tricky. If your friend moves into the home, he can claim it as his place of residence and the SSA will exclude it from his asset value, but his current home may be eligible as an asset that will disqualify him. If he gets funds that make him surpass the allotted $2000 is assets, he will become ineligible for SSI payments.

My father in law is reciving ss benifits and he wants to sell his house and property to me does that action affect his ss benifits ???

Hi Leo,
This will not matter if he is receiving SSDI benefits. If he is receiving SSI benefits however, this would almost certainly disqualify him, as he will have more than $2000 in assets.

Thank you for my previous message but i was wrong he gets SSDI Not SSI so my question is can my friend receive Inheritance with out penalty and inheritate property in his name? also what about if there is 2 homes involved 1 in california 1 in Arizona can both properties be put in his name? Than You :)

Hi Josie,
No problem then! Anyone who receives SSDI does not get penalized if they receive inheritances, no matter how large the sum is. SSDI is based off work history, not financial need.

A family member is receiving ssdi for a life-long illness. She is likely to receive a house w/ her sibling. She was told that she could be forced to sell the house in order to pay back ssdi, can this happen? Her mom set up a disability trust that pays her money every month, but is limited to what she can use the money for, things other then housing, food and 1 other thing. Y can't she receive the full lump sum of money? Will that effect her ssdi? Does the State you live in put restrictions on your benefits even though ssdi is federally funded?

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