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


In reply to by Cherie Murray (not verified)

Hi Cherie,
It did not. When you reach full retirement age your benefits will change to retirement benefits, but it would not affect your benefit amounts.

Mon, 04/18/2016 - 13:49 Permalink
Patty (not verified)

My grandmother is dying of cancer, and while I was recently trying to verify her life insurance for funeral services, I determined that her beneficiary is my grandfather who also recently passed. I was informed that my dad being the next of kin, would then be the beneficiary. My dad is on SSI and is worried that this will cause him to lose coverage. If all of the money is spent on funeral expenses does it count and still need to be reported?

Wed, 04/20/2016 - 11:55 Permalink

In reply to by Patty (not verified)

Hi Patty,
This is such a horrible situation! I am so sorry to hear about it. I am unfortunately not sure how this would affect your dad. If your dad receives less than $2,000, he should be fine. If he's going to receive more, you could potentially arrange for it to be placed in a fund to be used at a later time for his well being. I would highly recommend calling the SSA at 1-800-772-1213 to learn a little more about this.

Wed, 04/20/2016 - 12:43 Permalink
Elizabeth (not verified)

I do not qualify for ssi. I only qualify for back pay I'm still waiting for the last payment and in between that time I will inherits some money. Do I still need to notify ssi??

Thu, 04/21/2016 - 15:01 Permalink

In reply to by Elizabeth (not verified)

Hi Elizabeth,
If you are not receiving monthly SSI checks, you may not have to report that inheritance. The back pay is for months that you were eligible for benefits but did not receive them.

Mon, 04/25/2016 - 13:45 Permalink
Russ (not verified)

I currently draw SSDI and I am looking at a potentially large payout on a lawsuit. The lawsuit involved the state of Washington (DSHS) shorting in- home care providers on their wages. I already received an initial payout of approx. $650.00 for back wages and am looking at a second payout that has the potential to be in the thousands. Would the second payout ALSO be considered wages and if so, how would that effect my SS payments? Thanks

Fri, 04/22/2016 - 14:48 Permalink

In reply to by Russ (not verified)

Hi Russ,
That's a very interesting question! I would say that if you received that money from a settlement rather than as part of a paycheck, it may be considered unearned income rather than earned income.

Mon, 04/25/2016 - 13:48 Permalink

In reply to by Peter Jones (not verified)

Hi Peter,
I'm sorry for your loss.
If you get paid to be the case administrator of your father's trust, it may be considered earned income, and as such it would count toward the Substantial Gainful Activity limit.

Mon, 04/25/2016 - 13:52 Permalink
Karen (not verified)

My family member receives SSI and SSDI. Is getting a $5000 inheritance from deceased person. We understand SSI is effected by resources over $2000.
Question 1: Can the inheritance be signed over to another family member, and if so must it be reported?
Question 2: Can the SSI recipient use a portion of the inheritance for college tuition as a spend down?
Question 3: During the period of spend-down, does the SSI recipient lose Medicaid?
Question 4: What are other options? I understand PASS and IDA savings require either employment or extensive application to a government program?

Thu, 04/28/2016 - 21:42 Permalink

In reply to by Karen (not verified)

Hi Karen,
1) That would have to be reported, but the inheritance would count as income, not resources, for the month that he recieved it. After that month, it would become a resource.
2) He may be able to use the inheritance to pay for the tuition, I would contact his SSI case worker to confirm.
3) As Medicaid is administered by the state, it would depend on the particular state's regulations on coverage.
4) He may be able to set up a special needs trust as well, those types of trust may not be counted as a resource for SSI. you can find some more information here:

Fri, 04/29/2016 - 12:02 Permalink
Raymond (not verified)

what happens if my inheritance is say 2 million dollars and im on ssdi, and i receive over 50000 in intrest from dividends , do i have to report that, and how will that effect my ssdi/medicare benifits

Fri, 04/29/2016 - 14:12 Permalink

In reply to by Raymond (not verified)

Hi Raymond,
You should be fine if that money is considered unearned income, as there is no limit for unearned income for SSDI recipients. I would contact the SSA just in case. Also, you would still be covered under medicare if you would still be otherwise eligible.

Fri, 04/29/2016 - 16:45 Permalink
nance (not verified)

I have a disability and I also get medicaid, SNAP food stamps, and section 8 how does this effect my inheritance?

Sat, 04/30/2016 - 05:05 Permalink

In reply to by nance (not verified)

Hi Nance,
Depending on the amount of the inheritance it may disqualify you for those benefits it it brings your resources or income over the limits for each of those programs.

Mon, 05/02/2016 - 10:11 Permalink
sapphira (not verified)

This is complicated and getting an answer has been hard. Please help. My husband and I are physically disabled and under 45 years of age. My husband is on Supplemental Security Income (SSI) benefits ($30 per month), and no SSDI. He also gets a small amount from supp. welfare ($17 per m) and medicaid insurance. I am slightly different, I paid in taxes through working so I'm on Social Security Disability Income (SSDI) (about $1000 per m) benefits and SSI benefits ($30 per m). I also get a small amount from welfare ($17 per m) and Medicare + Medicaid Insurance picking up the extra. Also, we are on SNAP benefits. What happens to our income and medical benefits if my husband's family leaves him and only him an inheritance of over $20k? Do we both lose all our medical coverage as well as our SSI and my SSDI payments? Is there a limit to how much money we can have if we give up all the supplemental income and snap benefits? Can we keep the SSDI income? Help?????? Calling Social Security can be a nightmare to get a same answer twice. Any advice?

Sat, 04/30/2016 - 06:33 Permalink

In reply to by sapphira (not verified)

Hi Sapphira,
Your SSDI benefits may not be affected by the inheritance due to the fact that your SSDI benefits are based off of your own work record, but the inheritance may be counted as income for the month your husband receives it and a resource for the months after that.

Mon, 05/02/2016 - 10:14 Permalink
Michelle (not verified)

In reply to by Bryan

I get SSDI and am also on medicaid and medicare. My father passed in 2011 and my brother wants to sell his house before it forecloses due to a reverse mortgage. After talking to the realtor we would get about 5,500 each. How would that affect my benefits and if it will affect my benefits and I have the money sent to my son instead would I be ok then? Any advice would be appreciated.

Thu, 05/05/2016 - 18:18 Permalink

In reply to by Michelle (not verified)

Hi Michelle,
As Medicaid is a needs-based program, it may change your eligibility for Medicaid. If you're getting both SSDI and SSI, it may change your eligibility for SSI.

Fri, 05/06/2016 - 11:28 Permalink
Michelle (not verified)

In reply to by Bryan

In reference to previous comment I only get ssdi not ssi with that being said would my medicaid or medicare be affected? And if so would there be a problem having the money made out and sent to my 19 yr old son?

Fri, 05/06/2016 - 17:18 Permalink

In reply to by Michelle (not verified)

Hi Michelle,
Your Medicaid may be affected, but since it's a state run program, I would not be able to be specific as different states have different regulations. I would say if you did have the inheritance made out to your son, you may not run into any problems with you SSDI as that is based off of your work record and not your income or resources.

Mon, 05/09/2016 - 17:02 Permalink

In reply to by Rita (not verified)

Hi Rita,
If you are receiving SSDI benefits, then it would only affect your disability benefits if you are able to perform substantial gainful activity as defined by the SSA. You would be able to be part owner and make an income (profits from being part owner), however you may not necessarily be able to perform work for that income.
If you are receiving SSI benefits, then you may have your benefits affected by being a part-owner in your husband's business, the SSA determines SSI based on income and resources, and being part owner of a business may increase both over the limits for SSI.

Thu, 05/12/2016 - 14:36 Permalink
Kay (not verified)

I don't know if I'm on the right blog but I have a question...If someone on ssi gets married and there soon to be husband works will the person getting ssi lose her benifits???

Fri, 05/13/2016 - 13:46 Permalink

In reply to by Kay (not verified)

Hi Kay,
Their SSI benefits will be calculated with the household income and resource limits, so if the working spouse's income and resources exceed the income and resource limits, the SSI beneficiary may lose their benefits or have them reduced.

Fri, 05/13/2016 - 14:35 Permalink
Roz (not verified)

If I am covered by Medicare and Medi-Cal due to my SSDI benefits and receive a monetary gift from my mom, will my healthcare coverage be affected?

Tue, 05/17/2016 - 15:12 Permalink

In reply to by Roz (not verified)

Hi Roz,
Your Medi-Cal may be affected if the monetary gift affects your income and resources. I would contact the state Medicaid office to check how specifically it would affect your eligibility.

Wed, 05/18/2016 - 10:38 Permalink
hoss (not verified)

My friend daws ssi and ssa do you have to report money if your granny left you the benfirary and how much can you recieve without report it

Wed, 05/18/2016 - 21:51 Permalink

In reply to by hoss (not verified)

Hi there,
yes, you would have to report that money, regardless of amount as the SSA uses your income and resources to calculate SSI benefits.

Thu, 05/19/2016 - 09:52 Permalink
Charles (not verified)

Will an inheiretance or being a beneficiary to a government retirement be kept when the other person dies and you are on SSDI and Medicare.

Fri, 05/20/2016 - 13:38 Permalink

In reply to by Charles (not verified)

Hi Charles,
Yes, you may be able to keep an inheritance or receive benefits from a government retirement plan while getting SSDI benefits and Medicare

Mon, 05/23/2016 - 09:48 Permalink
BETTY (not verified)

I am on SSDI and my friend passed away and left me a annuity life insurance for 12,995 will the money affect my monthly payments and do i have to report it.

Sat, 05/21/2016 - 00:25 Permalink

In reply to by BETTY (not verified)

Hi Betty,
If you are on SSDI, it would not affect your payments as that may be counted as unearned income. I would still contact the SSA and let them know about it just in case.

Mon, 05/23/2016 - 09:49 Permalink
Beth (not verified)

If someone gets SSI and SSDI and a family property is sold and they recieve $20,000 from it, does she lose the SSI? What if she takes the money and buys a small home with it. Does she still lose it or does she get to keep it and also buy home with the money.

Fri, 05/27/2016 - 11:46 Permalink

In reply to by Beth (not verified)

Hi Beth,
That person would lose their SSI benefits for the month that they receive the money, and it would be considered a resource for the months after that, so they may lose the SSI. I would have that person contact the SSA, they can absolutely buy a home with that money and stay on SSI, but it's a good idea to make sure the people at the SSA would know about the change in housing and income/resources.

Fri, 05/27/2016 - 15:41 Permalink
Laura (not verified)

My mom owns working farm land. My sister and I are part owners but only get 1.5% at the moment. Upon her death the farm is to be sold to the person that actually farms the land and the income is to be divided between both my sister and I. I am on SSDI, how will that affect my benefits if I am not doing the work?

Mon, 05/30/2016 - 17:57 Permalink

In reply to by Laura (not verified)

Hi Laura,
I'm happy to say that it might not affect your income at all! As you're on SSDI, the SSA does not have a cap on the amount of unearned income (like inheritances) that you would be able to have.

Tue, 05/31/2016 - 10:04 Permalink

In reply to by Laura (not verified)

Hi Laura,
I'm happy to say that it might not affect your income at all! As you're on SSDI, the SSA does not have a cap on the amount of unearned income (like inheritances) that you would be able to have.

Tue, 05/31/2016 - 10:04 Permalink
Lafaye Martha … (not verified)

It's sad, that people who are on disability, barely financially make it, I feel if thier love one died and left them five hundred or 1200. Dollars, the government should not be allowed to Robb them of such a gift from a dead loved one, thus penalizing the handicapped, for this, it's so criminalizing.

Thu, 06/02/2016 - 16:12 Permalink
Rosemary Little (not verified)

My significant other's son is on SSDI and SSI. He currently lives in a rental house. My significant other has made a will to leave his estate to his disabled son in a special needs trust. The estate consists of a house and perhaps about $5,000 in cash once debts are settled. If my significant other's disabled son moves into the house after he inherits it, will he be able to continue receiving his SSI?

Thu, 06/09/2016 - 14:09 Permalink

In reply to by Rosemary Little (not verified)

Hi Rosemary,
That's a great question! Assets in a special needs trust, such as a house, may not be counted as income or resources for the purposes of SSI benefits, so he may still be eligible.

Thu, 06/09/2016 - 15:54 Permalink

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