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.

Additional Resources

Blog comments

John Dean (not verified)

hello, I am on SSDI, I have two siblings, we are all over 50, my father recently updated his Living Will, I have been his executor for many years, however, when he updated it, his lawyers said I could not be the Executor because it would disturb my SSDI. after reading this blog, I can not understand why it would alter/disturb my disability payments. hoping you can help.

Thu, 02/09/2017 - 18:40 Permalink

In reply to by John Dean (not verified)

Hi John,
Being an executor of a will may affect your benefits if the SSA considers being an executor of a will to be work, and you derive income from that work, you may become ineligible for benefits based on that demonstrated ability to work.

Mon, 02/13/2017 - 14:38 Permalink
Vanessa (not verified)

I have a friend on Disability with SSI as a back up to make up the difference. A few weeks ago she received a settlement from a class action lawsuit against her former employer, Walmart. It was about $900.00+ about $1200.00 in interest. She received a paper for the interest and a W-2. She hasn't been able to work for a number of years. Do we file income taxes?

Sun, 02/12/2017 - 20:17 Permalink

In reply to by Vanessa (not verified)

Hi Vanessa,
Yes, your friend may need to file income taxes for that money, she may want to contact her local SSA office to report receiving that money as well.

Mon, 02/13/2017 - 16:51 Permalink
JoyLynn Wright (not verified)

Will my ssdi payment be counted as an asset limit breaker when it is deposited to my account if I have reach the $2000 limit?

Wed, 02/15/2017 - 17:21 Permalink

In reply to by JoyLynn Wright (not verified)

Hi JoyLynn,
If you're receiving SSDI benefits, then they may not be not subject to either income or financial resource limits.

Fri, 02/17/2017 - 10:26 Permalink
Anonymous (not verified)

I have been receiving ssd since I was a young girl. I am going to marry in 4 months and my husband to be has a good salary. Will this affect my ssd? I work a small job at a local school,earning only about $200. a month.

Fri, 02/17/2017 - 13:18 Permalink

In reply to by Anonymous (not verified)

Hi there,
If you're receiving SSI benefits, it may as SSI benefits for married couples are calculated differently than for single individuals.

Fri, 02/24/2017 - 10:08 Permalink
Beth (not verified)

I've been on SSI for 8 years in state of Connecticut I recently moved to New Jersey I sent them in my new information about where I am living and they stopped my SSI because I am a POD beneficiary and have been for the past 4 years ,they stopped my SSI benefits they stopped my Medicaid I have nothing now. Does being a pod beneficiary payable upon death affect my SSI as it is not available to me and I am restricted from the use of this bank account with no legal rights or use of account only upon and upon the death of this person

Sun, 02/19/2017 - 11:43 Permalink

In reply to by Beth (not verified)

Hi Beth,
any other financial resources that you have, even accounts you may not be able to access yourself, can be counted as a financial resource for the purpose of calculating eligibility for benefits.

Mon, 02/20/2017 - 16:41 Permalink
JILL ORCUTT (not verified)

iam 58 and on ssdi, when I turn 62 or 64 I have to reaply as retired will I still be on ssdi or will it change to ssi,,,some day ill be getting moneys from inheritance

Sun, 02/19/2017 - 19:10 Permalink
Anonymous (not verified)

I'm on SSD & have inherited money from my parents. I've been waiting & on a list for low income housing for age 62 & on SSD. Will this inheritance affect my SSD, or my application for low income housing & will the IRS be sending me a 1099 for tax purposes? Thank you

Mon, 02/20/2017 - 10:34 Permalink

In reply to by Anonymous (not verified)

Hi there,
Yes, it may affect your eligibility for means-tested programs, such as low-income housing. As far as a 1099, I'm not really sure what type of tax forms the IRS would send in your case.

Fri, 02/24/2017 - 10:06 Permalink
sal (not verified)

my daughter gets ssdi i plan on retiring and am able to leave her half of my state pension benefit on my death for her lifetime will that effect her ssdi benefit and medicare

Wed, 02/22/2017 - 18:06 Permalink
Charles Hines (not verified)

I appplied for SSI and Disability in November when I was diagnosed with End Stage Kidney Failure. It is almost March and I just got approved. I have to interview with the SSI office because they told me I may not be capable of controlling my finances......which is not true at all. I struggled from November to January when I got a lump sum of $30,000.00 from my life insurance because my disease is considered a critical illness. Of course with over 100 thousand in hospital bills, that money won't last forever. SSI told me that I would not be approved because of the amount I recieved. I have contacted an attorney but I would like another opinion please.

Fri, 02/24/2017 - 11:40 Permalink

In reply to by Charles Hines (not verified)

Hi Charles,
SSI benefits are awarded based on income and financial resources, meaning you would not be eligible if you have more than $2000 in savings if you are single and $3000 if you are married.

Fri, 02/24/2017 - 15:10 Permalink

In reply to by jenny (not verified)

Hi Jenny,
It may, you may want to contact your local SSA office regarding this so you can plan for any changes in income or financial resources.

Tue, 02/28/2017 - 09:06 Permalink
Alex O'cean (not verified)

If I were Given a car as a gift and am receiving SSDI and SSI, is there any rules I should know about before I am Given the car?

Tue, 02/28/2017 - 21:44 Permalink

In reply to by Alex O'cean (not verified)

Hi Alex,
while the vehicle may not be counted as a financial resource for the purposes of calculating your SSI, you may want to contact your local SSA office regarding this for some detailed information specific to your case.

Wed, 03/01/2017 - 10:18 Permalink
Viper (not verified)

I'm getting 735.00 a month on disability. My ex boyfriend past away and left me $19,000.
Will that make me lose my disability?

Thu, 03/02/2017 - 19:32 Permalink

In reply to by Viper (not verified)

Hi Viper,
I'm sorry to hear about that!
Those funds may be considered income for the month that you receive them and a financial resources for subsequent months, so it may affect your disability. You may want to contact your local SSA office regarding this.

Fri, 03/03/2017 - 15:36 Permalink
Marie (not verified)

My step father whom I care for receives ssi benefits and recently received several thousand dollars from a trust. Will this affect his benefits? Is this something we need to report. It was a one time payment.

Fri, 03/03/2017 - 23:24 Permalink

In reply to by Marie (not verified)

Hi Marie,
This would affect his benefits--But you may be able to put it in a secured account to be used for his needs at a later time. I would speak with the SSA representative who handles his case as soon as you can.

Tue, 03/07/2017 - 08:24 Permalink
Shyla (not verified)

My mother passed away and two of my siblings receive SSI and SSDI. There will be two separate transactions. One from an investment in the amount of $18,000 and the sale of a house $20,000. Will this affect their SSI and SSDI and if so for how long and will they need to refile?

Sun, 03/05/2017 - 22:18 Permalink

In reply to by Shyla (not verified)

Hi Shyla,
This will affect their SSI (they'll lose it) but not their SSDI. They should have an extended period of eligibility after losing SSI to reapply if they no longer have more than $2,000 in assets.

Tue, 03/07/2017 - 08:25 Permalink
Terry (not verified)

Hi my friend receives ssdi and was determined disabled before she was an adult. Her father died and left her and her sister property oil well and royality rights. Because her family and friends took a large amount of her money the courts order a trustee to over see her inheritance. The trustee pays most of her bills but gives her a monthly allowance. She get her monthly check from social security. Is her inheritance completly protected. When social security sends out renewals dies she have to report the inheritance to social security at all.

Mon, 03/06/2017 - 13:11 Permalink

In reply to by Terry (not verified)

Hi Terry,
If you are a Social Security Disability Insurance (SSDI) recipient and receive an inheritance, it will not affect your benefits.

Best Wishes,

Mon, 03/06/2017 - 16:32 Permalink
Mandy (not verified)

My dad doesn't have very long left and when he dies I will receive a large sum. I have ssi. Once I use the money to pay for a vehicle(don't have one now) and my on home(don't have one now) I will be left with just ssdi to live on, can i get back on ssi again?

Tue, 03/07/2017 - 19:52 Permalink
Brittney (not verified)

Jane Doe has been receiving SSDI for 5 years, and SSI for 1 year (from her former spouse that passed away). Jane also lives in subsidized housing. Jane's mother passed away and Jane will be receiving her inheritance. What will this affect for her? Who does she need to contact?

Wed, 03/08/2017 - 12:48 Permalink

In reply to by Brittney (not verified)

Hi there,
It would affect Jane's SSI benefits as the money would be considered income for the month that she receives it and a financial resource for every month afterward. However, it may not affect her SSDI benefits.

Wed, 03/08/2017 - 15:07 Permalink
Susan (not verified)

If I got $from my parents when they passed and it went to home improvement and I get ssd ssi will that be a problem for me??
I spent some$ on dental, my husband is my payee

Wed, 03/08/2017 - 23:02 Permalink

In reply to by Susan (not verified)

Hi Susan,
If you're receiving SSI benefits, the SSA may consider this money income for the month that you receive it and a financial resource for the months after. It may be a good idea to get in touch with the SSA for some more information about how this would affect your benefits.

Mon, 03/13/2017 - 12:59 Permalink
HVED (not verified)

I receive SSDI and have a few questions:

1) Would I lose my benefits if I received large lump sum life insurance payout?

2) would I lose my benefits if I invested the life insurance money and received $40k-$50k per year off of the investment?

Thu, 03/09/2017 - 23:17 Permalink
Val (not verified)

I am on SS disability, medicare and medi-cal. I an going to receive an inheritance soon. Will that affect my medi-cal? I am unable to work

Fri, 03/10/2017 - 18:29 Permalink

In reply to by Val (not verified)

Hi Val,
You may want to contact the office that administers Medi-Cal, as they can explain any restrictions on your benefits that they may have.

Mon, 03/13/2017 - 13:00 Permalink
Deannarich87 (not verified)

I am asking for my mother in law.
She received an inheritance and is on SSI. She was told by SSI that due to and inheritance, she should spend the money on home improvement within 90 days, and it would not count as income.

She has been spending money to fix her house and barns (bought a truck for farm equipment), called SSI to see exactly want they needed (she has been keeping receipts for all purchases) and they are now cutting her off, and she now owes back payments!

What is she suppose to do? Is there any advice?

Wed, 03/15/2017 - 19:23 Permalink

In reply to by Deannarich87 (not verified)

Hi there,
She may need to collect financial documentation if she needs to dispute the overpayment. Additionally, inheritances count as income for the month you receive it (The SSA reduces SSI benefits one dollar for every two dollars of income). After that first month, it is counted as a financial resource, which has a maximum of $2000 for eligibility.

Thu, 03/16/2017 - 10:20 Permalink
Mm (not verified)

We receive disability for my daughter's autism, I am her representative payee. I will be getting an inheritance in a few months. I know that when they do financial reviews they ask about gifts. Will this change her benefits?

Mon, 03/20/2017 - 16:36 Permalink
jerry (not verified)

hi, I have been receiving ssdi for approx. 10 years, I bought and paid off 2nd home next door, My daughter and boyfriend live in there at cost meaning they pay only for taxes insurance termites and getting the house livable putting in nearly 20k to fix it. She and I cannot get along so I may sell the home, she is in the process of calling ssdi and possibly giving them inaccurate info info to try and make me loose my ssdi. is this possible for her to do this?

Tue, 03/21/2017 - 20:27 Permalink

In reply to by jerry (not verified)

Hi Jerry,
I'm sorry to hear about that! The SSA does investigate claims of fraud, but they may not terminate your benefits without investigating.

Wed, 03/22/2017 - 10:05 Permalink

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