August 23, 2019

Can Inheritance affect your Social Security Benefits?

  • by Marston Pickworth
  • 2 Years ago
  • Comments Off

Often, the overall eligibility for social Supplemental Security Income or security disability benefits depends on a range of factors. Some of these factors include your living situation, overall ability to work, the income and other resources you have acquired, and more.

Note that SSI (Supplemental Security Income) and SSDI (social security disability insurance) are different programs. And what might impact or disqualify a recipient of SSI may not automatically disqualify someone from getting SSDI. To determine whether or not inheritance will affect your social security, consult with a good Rockford social security attorney.

Social security disability insurance and inheritance

The social security administration offers two distinct types of disability benefits; SSDI is meant for disabled workers, and the other policy is intended for adults and kids with limited resources and income. Note that social security disability insurance is a safety net for employees who suffered disabilities before reaching their retirement age and are unable to continue working. Note that eligibility form SSDI is based on one’s work history and the level of work credits on their records. Thus, income, assets, and other resources don’t matter in this case.

However, if you earn more than $1,170 monthly, this level of income is likely to affect your social security disability benefits. Generally, inheritances are classified as unearned income, and thus, any form of inheritance you get will not affect your social security disability benefits.

The case for Supplemental Security Income (SSI) is different

The social security administration also offers a disability benefits program known as Supplemental Security Income (SSI) for disabled children, blind people, and even disabled adults who have limited work histories. Note that this is a need-based program, and that means your assets, income, and other resources you own have a direct impact on your eligibility for Supplemental Security Income.

As of 2017, the financial criteria for supplemental security indicated that your monthly income shouldn’t be more than the FBR (Federal Benefit Rate) $735 monthly an individual or $1,103 for a couple. Besides, the overall value of your allotted assets shouldn’t be more than $2,000 for an individual and $3,000 for a couple. Note that the social security administration excludes essential assets, including your car and home.

So, any income, whether earned or inherited, will have an impact on your eligibility for SSI benefits. Therefore, if you recently got an inheritance and you’re already on supplemental security income, you are supposed to report the amount of inheritance to the social security administration.

Protecting your SSI benefits

There are different ways to protect your supplemental security income benefits in case you are likely to get the inheritance. You can talk to the benefactor to place the property or funds in a special needs trust. A good attorney can help handle the necessary paperwork.

Another option is to get an ABLE (Achieving a Better Life Experience) account. This account is created for qualified people with disabilities. It can allow you to save up to $100,000 without affecting your eligibility from SSI benefits. Lastly, if you become disabled before you attain 26 years and you’re getting SSI benefits, then you automatically eligible for an ABLE account.

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