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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, or Twitter. 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 2017, SGA is considered to be earning $1,170 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.

Hi John,
SSDI does not have limits on unearned income, so you do not need to report it.

Hi Jane,
You're right! When you reach full retirement age, your benefits will convert to retirement benefits.

I was very worried I am currently on SSDI my mom passed away and left me a will of a little inheritance I was afraid to lose my SSDI because I need my medical and I need my SSDI because of my illness

Hi Skyla,

You don't have to worry because inheritance does not affect SSDI.

-Eric

I am my sons payee he is on SSSI has been for a long time he has brain damage from a head I injury if I die and leave him money can he receive it without losing his check and medicare ins I have been told if I leave it to him if there is any left in his bank account it goes back to SSSI when he dies

Hi Patricia,

Unfortunately any unearned income, including inheritance may affect his SSI benefits.

Best Wishes,
Eric

I am on SSI,, my mother is 92 and if she dies and leaves me her house will I have to sell it and give the money to the SSI office???

Hi Jackie,

If you are on SSI, you should report any additional income (including property through inheritance) to the SSA.

Best
Eric

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.

Reading your reply, you seem to be saying John is ineligible for SSI benefits because he collected INTEREST on his inheritance he put into an interest bearing account. Wouldn't his receipt of the inheritance make him ineligible?

Thanks for your comment, Betty! Since John is on SSI, which is a need-based disability program meant for those who have little or no income or resources, the interest of his inheritance affected the "need-based" to qualify for SSI benefits. Hope this helps!

Hi Kaye,
That may affect each other as SSDI payments may be considered income for the purposes of determining Medicaid eligibility.

my mom died and left me 10,000. and I put in cd and lost 500. for early take out now they are taking out money every month and I have to live on less than 600 a month don't understand if I wasn't honest they would have never known then money stolden from home now still paying i'm 68

Hi there,
If you're recieving benefits based on your income level, the money that your father left you may be considered income for the month you receive it. I really could not say why the money is being withdrawn from your account but if you contact the SSA at 1-800-772-1213 they may be able to give you some more information about your benefits.

HI Sara,
If you do not reimburse any money that the SSA claims you were overpaid, you may not be eligible for benefits at that time.

I think you missed the main issue here as to why his SSI has been cut off and he is not only responsible for paying that money back, but has most likely had those funds frozen.

The issue is his assets. For SSI and dependent on your state medicaid have limits. Most states limit your savings to under $7,500... some as low as $2500. This has been one of the main benefits of "ObamaCare" it stopped the asset limit and focused on your income not your retirement.

You answer about being cut off due to interest income is totally misleading amd false. To begin with, how much interest can you get anymore on $100,000, maybe $3,500 but if he had a savings, money market, cd, etc. then less.

Hi there,
If the child had inherited it rather than the mother, it may not, however you may want to contact your local SSA office regarding this.

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?

Hi Mike,
So long as you receive SSDI benefits and not SSI benefits, no problem.

My friend is not too savvy with real estate or ssdi rules. I am also on medicare and ssdi.
She co- owns a distressed home w her sister left in a will. The sister is awaiting another family home, agreeing to sign hone to my friend so she can sell it. Can she retain her ssdi entitlements upon sale of an inherited property?

Hi Maureen,
Yes, your friend may still be able to sell the property while keeping SSDI benefits, as those benefits are based off of her work record, rather than her income or financial resources.

My parents left me property,which is for sale,wen the property sells will the inheritance property affect my social security disability?

Hi there,
If you're on SSDI and inherit property, it may not affect your benefits as SSDI benefits are based off of work history rather than income.

If my diabled sister forfiets her quarter of her inhertance (home where she lives) to my brother who lives with her, would that then be a "value" asset and jeopardize her benefits. Not sure if she gets SSI OR SSDI?

Hi Cindy,
Well, I really cannot help you if you don't know what type of benefits she's receiving. Any inheritance will not matter if she's on SSDI, but she could be disqualified completely if she's on SSI.

My son, who is 12 receives ssi. My father just passed & left approximately 14000 in life insurance to me. Do I need to report this & will it affect my son's ssi? If so, how much the amt of money will only go so far.

Hi Lo,
This is a spectacular question! It could affect your son's eligibility. You should definitely contact the SSA worker who handles your case to determine whether or not he will become disqualified from SSI benefits.

Hi my brother is on SSI. In 2014 we both received checks from my deceased mom's retirement contributions. Under $5000. My mom passed in 2003. My brother signed his check over to me to help pay my debt as I had a newborn and ws out of work for 7 months. I just received an unofficial letter from SA asking about these funds. Isn't my brother entitled to transfer his money?

Hi Helen,
The issue is that if your brother has more than $2,000 in assets, he will no longer qualify for SSI benefits. So if he received more than that through the inheritance, he might not be able to receive them. If he received less, he could be fine.

Hi Marie,
It would! I'm not sure about the land inheritance itself, but the proceeds from its sale would be counted towards the income and asset limits for SSI benefits.

Well, that's not entirely true. My SSI was completely cut off, even though the house hasn't been sold. Now I just got a Bill from social security for over $1,400 for "overpayment". They say I wasn't eligible for Feb - March. I never had any other cash, until the end of Feb, and I reported it w/ in 10 days after the month of Feb ( just like it says I'm supposed to)
Social Security's excuse is "We figure you can sell the house, and live off of "That"
But I have no control over when or how it gets sold. The other Ben's have control of that. I don't even have a key to the house !

I understand that an inheritance from my Dad passing won't affect my SSDI benefits BUT does it make a difference if the funds came from a mutual fund account that he had where my siblings and I were named beneficiaries? I received a form from the mutual fund company for tax purposes but I am just wondering if when I am calculating on the back of the form that Social Security sends each year to see if I do have to pay taxes on my SSDI payments and I add my inheritance funds to the total it still says I don't have to pay taxes? Do I need to report this to Social Security?

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