Effects of an Inheritance on SSI Benefits
According to financial experts, people who receive Social Security Disability (SSD) benefits should be aware that inheritances can jeopardize their ability to receive these government payouts. If you are receiving Social Security only through retirement benefits, you will likely not be affected by measures governing large inheritances. If you are receiving SSD or Supplemental Security Income (SSI) benefits, though, a careful financial analysis must be performed to ensure continued eligibility for the programs.
Social Security is a governmental program which provides a monthly check because you are retired and age 62 or older. You also will receive Medicare benefits beginning at age 65. Social Security is not a “means tested program” – your eligibility is not affected by receiving assets or income from an inheritance. Therefore, receiving an inheritance doesn’t effect your Social Security payments.
Social Security Disability is a program that provides cash benefits to disabled people throughout the nation without any age restriction. According to experts, if you are disabled and cannot work, you are likely receiving the SSD version of the benefits. SSD also isn’t a means tested program, so your SSD benefits will not be affected by any change in your assets or income. Receiving an inheritance will not have any effect on your monthly SSD benefits.
But SSI benefits are another situation entirely. The Supplemental Security Income governmental program provides financial benefits to disabled adults and children who have limited income and resources. People receiving SSI are most likely receiving Medicaid benefits as well. Some people receive SSI and SSD or Social Security benefits. SSI is a means-tested program, so any changes in the amount of assets that you own, or changes in the amount of income that you receive from an inheritance, may affect your monthly SSI benefits.
Even a one-time inheritance could permanently jeopardize your ability to receive SSI income from the government. You must report the inheritance immediately to the SSI program. If you have assets that are more than $2,000 as a single person, or more than $3,000 if you are married, you may no longer receive the benefits. An inheritance that propels your net worth above those thresholds may endanger your continued eligibility for SSI.
And while it may be a good thing to not need the benefits anymore, make sure you budget responsibly, so that you are not stuck in the same situation.
Source: The Times Reporter, “Inheriting assets, money may impact other benefits,” James Contini, July 2, 2012