SSI disability and Life Insurance

Submitted by Anonymous (not verified) on Sun, 10/01/2017 - 02:19

My mom, 55, just lost her husband (my dad). Shes receiving SSI disability (not SSDI) and survivors bemefits for my 15 yr old brother. She just received the deposit for my dads life insurance, $30k and now bank is telling her she has to put the money in her account. However, she wont qualify for ssi if she does that right??. The 30k is to supplement the ssi because shes only receiving 1400 a month (will go down to 700 when my brother graduates) and she can not work due to medical reasons. Theres no way she can survive on 700/month, but everywhere I look says she'll lose it. Help!!! Any way to avoid this?

Thu, 10/05/2017 - 09:23 Permalink

HI there,
Your mother may want to look into a disability trust as they are exempt from SSI asset limits.

Janet (not verified)
Sat, 10/14/2017 - 10:04 Permalink

So she has in her possession a $30,000 check. For SSI, it doesn't matter if she puts the money in the bank or keeps it in a lock box in her house or puts in your safe deposit box. She has the money. It belongs to her. She is required to report it or she is committing fraud. And SSI will find out. There is a paper trail and a 1099 will be issued for this money in 2017 and it will be attached to her SSN and SSI will find out. In about six months. If she hasn't reported it, her debt to SSI will be even bigger once SSI gets the information which they will. Don't think she can hide it. She is already overpaid SSI and this will continue to grow if she hides the money.

However, why is she not getting disabled widow's benefits to replace some of the SSI?

She can't transfer the money into any kind of trust NOW. It would have to have been done before the money was issued to her, it would have to have been part of the decision made by the insurer when he took out the policy, that the beneficiary was a trust. If she puts it in a trust now, it becomes a countable resource

$30,000 is a nice chunk of money but it won't last the rest of her life either. Use it to make sure she is debt free, has a vehicle that will last her a long time, household goods and appliances to last a long time, and figure out how to live as an SSI recipient who can only have countable resources of $2000. And she can be penalized with months of non-payment for giving away money.

Now, if her disabled widow's is more than her SSI, then give up SSI and live on the widow's benefit and hoard the money as long as she can. Food stamps and section 8 will have to be informed as well. These programs are the safety net for people who don't have $30,000.


In reply to by Janet (not verified)

Wed, 10/18/2017 - 15:07 Permalink

Hi Janet,
You may want to contact the SSA regarding this, you can do so by contacting them at 1-800-772-1213.

Krystal (not verified)
Sun, 11/26/2017 - 19:06 Permalink

SSI will not cancel since a one time payment is not the same as an income change. It would only be paused until the money is used if you can use it within a month or two then she will not be out much SSI , only a few thousand and the Medicaid or Medicare will not end at all during this time. So the best thing to do since it is only 30,000 is, can she refinance her home and put a large chunk toward completely paying it off. Are there any mandatory things that need paid? Pay a year’s worth of car payments up front as well as the car insurance and home insurance. Why not put some into a college trust for your brother? Any sort of bills or credit cards that need paid? All of this will not be counted against you if it can be done in a few months then that temporary pause of SSI will be back in motion with benefits if you simply use the money. Other ideas: book a vacation in advance and already pay it, put 2000 or more on grocery and gas gift cards to use for such needs, that way you’re still accessing the money but it is no longer traceable. She is going to have to first deposit it in the bank, will have to report it to taxes but if she keeps all receipts from how she spent that money that will help in getting tax money back. Oh also, a good computer is a tax write off for your brother due to school. SO, yeah, all you have to do is quickly spend it and spend it wisely and you will keep SSI.

rod sanders (not verified)
Fri, 03/09/2018 - 20:46 Permalink

Looking for life insurance for myself I'm on ssi /di

Mark (not verified)
Wed, 02/13/2019 - 14:33 Permalink

I'm on disability for medical reasons and can't work family member dies and leaves me 50,000 dollars will I lose my benefits because of this?


In reply to by Mark (not verified)

Thu, 02/14/2019 - 15:38 Permalink

Hi Mark,

If you are on SSDI, then it will not impact your benefits. If you are on SSI, the inheritance will likely cause your benefits to stop or decrease.

John (not verified)
Fri, 12/13/2019 - 04:06 Permalink

My sister is on SSI and is about to receive a $60,000 life insurance benefit from her brother who has passed away. She 71 years old will this affect her SSI benefits


In reply to by John (not verified)

Fri, 12/13/2019 - 15:25 Permalink

Hi John,

The SSI does see inheritance as a form of income and therefore can affect her SSI benefits. However, if she works with your local SSA office, there are ways where she can continue to receive benefits. I would recommend making an appointment with your office and making sure that they are aware of any changes or projected changes in income.

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