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How Will Inheritance Affect Your Social Security Disability Benefits?

If you recently received an inheritance while on SSDI, you might wonder how it’ll affect your monthly benefits. Many beneficiaries worry that an inheritance might automatically jeopardize their monthly payouts. However, every case is different, and the types of benefits you receive will determine the outcome. Learn more about how inheritance affects disability benefits and how it may impact your financial situation going forward.

Will Inheritance Impact Your Disability Benefits?

The Social Security Administration (SSA) has two main types of benefits you could receive:

  • Social Security Disability Insurance (SSDI): This program benefits individuals who have worked and paid into the Social Security system but can’t work due to their disabilities. The SSA evaluates your payouts based on disability and work credits, not financial need.
  • SSI (Supplemental Security Income): SSI is there to help older adults, blind, and disabled individuals without income. Unlike SSDI, SSI is needs-based and does not require the recipient to have a work history. However, it does require meeting strict income and asset limits.

The effect of inheritance on your Social Security disability benefits will ultimately boil down to the type of benefits you receive. If you’re an SSDI beneficiary, inheritance won’t affect your benefits because the program’s funded through payroll taxes you’ve already paid based on your work history. SSI recipients, on the other hand, who receive benefits based on financial need, might go over the SSI’s strict income and asset limits and have their benefits taken away.

Should You Report Your Inheritance To The SSA?

For SSI recipients, you need to report any inheritance to the SSA within 10 days of receiving it. If you don’t, you’ll have to pay back any overpayments and other penalties. If you receive SSDI payments, you don’t need to report anything. However, it’s always advisable to maintain open communication with the SSA to ensure everything is up to date.

Does Inheritance Affect Other Benefits?

Inheritance may impact your government benefits, especially if you qualify for other low-income programs like Medicaid or food stamps. Like SSI, these programs limit how much you make or how many total assets you have. Getting a large inheritance could instantly push you over the threshold, leading to a loss of benefits unless you properly manage everything through legal financial tools.

Can You Stop The SSA From Taking Away Your SSI Benefits?

Your benefits may be suspended if you go over SSI’s resource limit. However, there are a few ways to avoid this, such as spending your inheritance quickly on non-countable assets like your home, a car, or personal debts. Another strategy is setting up a special needs trust, which can hold your inheritance without directly affecting your benefits if you set it up correctly.

Our Attorneys Are Here To Help

Dealing with inheritance while on disability benefits can be confusing. Our experienced New York social security disability attorneys can help you understand your rights and options. We can help you navigate the process to protect your benefits while maximizing your inheritance. Please contact us online or at 855-208-7783 to schedule a free consultation today.

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