Eligibility for Social Security disability benefits depends on several factors, including your health, ability to work, living situation, and financial resources or income earned. This also varies based on the type of benefit program you seek. Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) have slightly different qualifying factors, in particular when it comes to the financial aspect. If you are wondering, “Will inheritance affect my SSI benefits?” keep reading to learn more about the Social Security Administration’s requirements.
Will Inheritance Impact My Benefits?
Supplemental Security Income (SSI)
SSI beneficiaries must follow very strict guidelines in order to receive benefits. The general rule of thumb is that a single individual may only have up to $2,000 of resources available to them. An increase in financial resources or income can reduce – or in some cases, even eliminate – your eligibility benefits. Depending how much you receive, an inheritance that is paid to you directly can raise your resources past the limit that makes you eligible for SSI benefits. If you receive a home or property, as long as you live in the inherited home, it will be exempted from consideration as a financial resource.
Social Security Disability Insurance (SSDI)
If you’re eligible for or a recipient of SSDI and receive an inheritance, it will not impact your benefits because it’s not contingent on unearned income. The only income that would have an effect on your SSDI benefits is wages earned through employment, called Substantial Gainful Activity, which could lower or eliminate your disability payments.
How to Proceed with an Inheritance
Even if you never “accepted” the inheritance or saw it deposited to your bank account, the SSA still considers it a resource for SSI purposes. By refusing it, you are technically giving up control of that resource, which is the SSA equivalent of transferring it. This could lead you to be penalized by way of suspended benefits. You do have an obligation to report any news of inheritance to the SSA, or you could face additional charges.
Typically the best solution for managing your inheritance is to transfer it to a “special needs trust,” which is permissible by the SSA. This type of trust is managed by a trustee and payments are made to those that are providing you goods or services; for example, home health care attendants, continuing education or tuition, and so on. If the funds are in a special trust, they are not under your control and therefore aren’t legally considered a resource.
Contact the Expert Attorneys at Woodruff & Mathis
If you find yourself wondering, “Will inheritance affect my SSI benefits?” look no further for the next steps. Handling an inheritance when you receive SSI or SSDI can be complicated, which is why it’s always best to contact an experienced disability attorney who understands the intricate process.
Woodruff & Mathis is a trusted Central Maine disability attorney who offers client-centered services. To speak with our team, please request an appointment today.