SSI Benefits and Inheritance: What You Need to Know

If you have a severe medical condition that has caused you to be unable to work and earn an income as you otherwise would, and you have income and resources below a certain level, you may be receiving supplemental security income benefits from the Social Security Administration. If not, and you find yourself in this situation, you may be considering whether or not you should apply. Either way, SSI benefits can make a significant difference to those who have no other source of income.

Understandably, you may have many questions about these benefits. One question we are often asked is, what happens if a recipient begins earning income in some way, or receives a financial windfall like an inheritance? Will that affect their eligibility to receive SSI benefits? These are important and understandable questions to ask. Let’s take a closer look at the law together.

What Types of Benefits Does the Social Security Administration Offer?

As you may know if you are already receiving SSI benefits, the Social Security Administration offers two types of benefits to disabled individuals. These include Supplemental Security Income, or SSI benefits, and Social Security Disability Insurance (SSDI) benefits. To qualify for either type of benefit, an individual must have a qualifying medical condition that has rendered them unable to work for one continuous calendar year or more.

While the two types of benefits share these characteristics in common, they have significant differences, too. A primary difference is that SSDI benefits are intended for individuals who worked a job through which they regularly paid employment taxes into the Social Security system, while SSI benefits are intended for individuals with income and resources below a certain limit established annually by the Social Security Administration.

Another important difference between the two benefits is how receiving a financial windfall, like an inheritance, might affect your ongoing entitlement to those benefits.

Inheritance and Different Benefit Types

If you receive SSDI benefits, you should be aware that as a general rule, inheritance money will not affect your ongoing entitlement to benefits. This is because SSDI benefits are based upon your work history and prior payments into the Social Security system, as opposed to your current income or resources. As a result, you can usually receive an inheritance of any amount without impacting those benefits.

Because SSI is an income-based benefit, however, the situation is different. It’s important to understand that an inheritance could affect your SSI benefits, because SSI has a resource limit of $2,000 for individuals, and $3,000 for couples. The Social Security Administration typically considers countable resources to include things like cash, stocks, bonds, bank accounts, brokerage accounts, land, life insurance, personal property, and a second vehicle, among other things.

As a result, if an individual receives an inheritance of more than the annual total resource amount, it will affect ongoing entitlement to benefits. Typically, the inheritance will start counting as a resource the month after you receive it.

If you receive an inheritance, it is essential to notify the Social Security Administration as soon as possible. In most cases, you are required to report your receipt of an inheritance to the Social Security Administration within ten days of the month following its receipt. At that point, the Social Security Administration will evaluate your ongoing eligibility and notify you if it has decided to terminate your SSI benefits.

Sometimes, people are tempted not to report the receipt of an inheritance to the Social Security Administration. In some circumstances, people even refuse an inheritance, assuming that the refusal means they don’t have to make a report. This is incorrect. Even if an individual ultimately refuses an inheritance, they still need to report it. Failure to do so could lead to financial penalties and a suspension of SSI payments for up to three years.

Understandably, all of this information may seem confusing and overwhelming. Knowing exactly how the law might affect your circumstances can be difficult. The good news is, you never have to worry and wonder alone. At Disability Experts, we’re here for you.

Call Disability Experts Today

If you receive SSI benefits, those benefits are very important to you, and it is understandable that you want to do all you can to protect and preserve your right to those benefits. At Disability Experts, we are here to help. We understand how vital these benefits can be to your financial security and stability, and that’s why we’ll fight for your right to continue receiving those benefits as long as possible, each step of the way. At times, legal rules and requirements can seem complicated and confusing, but we’ll keep you informed and involved in your case each step of the way. You deserve nothing less. If you’re ready to get started, give us a call today. We look forward to speaking with you soon.