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

Submitted by Daniel on Fri, 12/20/2013 - 12:52

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 2023, SGA is considered to be earning $1,470 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.

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Blog comments

E J Anderson (not verified)

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.

Mon, 12/28/2015 - 09:35 Permalink

In reply to by E J Anderson (not verified)

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.

Mon, 12/28/2015 - 16:42 Permalink
Betty Anderson (not verified)

In reply to by Deanna

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?

Thu, 07/14/2016 - 19:45 Permalink

In reply to by Betty Anderson (not verified)

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!

Fri, 07/15/2016 - 11:18 Permalink

In reply to by Kaye (not verified)

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

Tue, 06/06/2017 - 12:31 Permalink
Mike (not verified)

In reply to by vmw

What happens in the future when the said inheritance is spent and John no longer has little or no income, can John get His SSI benefits back?

Tue, 10/09/2018 - 12:52 Permalink
maryann thieme (not verified)

In reply to by Betty Anderson (not verified)

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

Sun, 12/11/2016 - 19:00 Permalink

In reply to by maryann thieme (not verified)

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.

Mon, 12/12/2016 - 12:52 Permalink

In reply to by Sara (not verified)

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.

Mon, 12/12/2016 - 12:52 Permalink
doug (not verified)

In reply to by Deanna

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.

Thu, 03/23/2017 - 09:45 Permalink

In reply to by Ms. Question (not verified)

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.

Wed, 07/12/2017 - 10:00 Permalink
Ys (not verified)

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?

Fri, 01/01/2016 - 15:00 Permalink

In reply to by Ys (not verified)

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.

Mon, 01/04/2016 - 16:27 Permalink
jackie (not verified)

In reply to by Deanna

my girlfriend might get an inherititance she is on ssdi and death benefits from her dad. (she was declared disabaled at age age 22). will she lose one or both for getting the inherititace?

Wed, 04/11/2018 - 08:49 Permalink
Beverly (not verified)

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?

Mon, 01/04/2016 - 21:07 Permalink
maureen mcdonald (not verified)

In reply to by Mike smith (not verified)

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?

Mon, 07/25/2016 - 01:17 Permalink

In reply to by maureen mcdonald (not verified)

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.

Mon, 07/25/2016 - 15:51 Permalink
margie (not verified)

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

Wed, 01/20/2016 - 02:47 Permalink

In reply to by Phaedra (not verified)

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.

Mon, 01/23/2017 - 09:53 Permalink
Cindy (not verified)

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?

Tue, 02/09/2016 - 19:02 Permalink

In reply to by Cindy (not verified)

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.

Fri, 02/19/2016 - 15:22 Permalink
Lo (not verified)

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.

Wed, 02/10/2016 - 19:19 Permalink

In reply to by Lo (not verified)

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.

Fri, 02/19/2016 - 15:23 Permalink
Helen (not verified)

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?

Sun, 02/14/2016 - 21:01 Permalink

In reply to by Helen (not verified)

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.

Fri, 02/19/2016 - 15:24 Permalink

In reply to by marie smoak (not verified)

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.

Mon, 03/21/2016 - 10:38 Permalink
Kim (not verified)

In reply to by Bryan

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 !

Thu, 05/11/2017 - 03:30 Permalink
Theresa (not verified)

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?

Thu, 02/18/2016 - 02:27 Permalink

In reply to by Theresa (not verified)

Hi Theresa,
I'm sorry for your loss. I'm not sure if you would need to pay taxes as I don't know how much you are receiving, but it would depend if the money from the mutual fund is considered income or not. I would definitely confirm this with the SSA, their number is 1-800-772-1213

Mon, 03/21/2016 - 10:47 Permalink
Theresa Gutowski (not verified)

In reply to by Theresa (not verified)

Hi my father just passed .. I’m on Medicaid & Ssi .. the house is sold .. I will be receiving 25,000 and 2,500 in life ins policy .. will I loose all this monies due to sale or can I waver all my money over to my 6 siblings .. or can I loose my Medicaid .. from nys

Thu, 11/30/2017 - 13:48 Permalink

In reply to by Theresa Gutowski (not verified)

Hi Theresa,
You may not be eligible for benefits for the month that you receive that money, and for any months after as it would be considered a financial resource. You may be able to place it in a special needs trust as that would exempt those funds from the resource limit.

Thu, 11/30/2017 - 15:11 Permalink
Ralph (not verified)

If I receive SSI and I inherit a million dollars do I have to pay back 15 years I was on SSI and my SSI Gats discontinued

Fri, 02/19/2016 - 16:43 Permalink

In reply to by Ralph (not verified)

Hi Ralph,
You would not have to pay back the SSI benefits that you have received, but because the million dollars is over the income and benefit limits for SSI, you would experience a loss of benefits because of the inheritance.

Mon, 03/21/2016 - 10:40 Permalink

In reply to by Mike (not verified)

Hi Mike,
It may affect your SSI benefits, as there is a benefit limit for SSI. If this inheritance puts you over the $3000 benefit limit for families, you may be ineligible for benefits.

Mon, 03/21/2016 - 10:35 Permalink
Dyrel Pierce a… (not verified)

I started receiving royalties from my brother's estate in Nov. 2012 and Feb. 2013, which at that time I reported to the social security administration because I do receive SSI. However, they (ssa) called me 2/17/16 to address this issue. My issue is that I did the right thing and then two years or more later, I am being handled like a criminal? Is there any legal recourse after I had done the right thing by reporting these circumstances, because now they are treating me like I did something wrong, even though I informed them of my receipt of royalties from my brother's estate! Someone, please advise?

Mon, 02/22/2016 - 16:13 Permalink

In reply to by Dyrel Pierce a… (not verified)

Hi Dyrel,
I am not sure what you should do in this situation! If you reported the payment, you should not have to lose your benefits. If the SSA is demanding some type of repayment and you can afford it, I always recommend to just do it, just to make sure you keep the benefits and health insurance you need.

Thu, 03/24/2016 - 13:15 Permalink

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