Do You Have To Report Inheritance If You Receive Social Security Disability?

Published on: May 4, 2023

Often, those receiving disability benefits have various questions about what may or may not affect their ongoing eligibility to receive those benefits. The possibility of receiving an inheritance often raises such questions. Losing a loved one can be difficult - and most people want to avoid added financial stress while dealing with their grief. Let's take a closer look together at how inheritance might impact Social Security disability benefits.


If you are receiving Social Security disability benefits, you may already know that there are two primary types of disability benefits provided by the Social Security Administration. These include:

  • Social Security Disability Insurance (SSDI): SSDI benefits are disability benefits that the Social Security Administration pays to individuals who are “insured" and have a qualifying medical disability that has rendered them unable to work for at least one calendar year or more. Essentially, being "insured" means that the individual has worked a qualifying job for a sufficient length of time through which they have paid a necessary amount of taxes to the Social Security Administration from their salary.
  • Supplemental Security Income (SSI): Unlike the case with SSDI benefits, an individual does not have to be “insured” to receive SSI benefits. However, they must have a qualifying medical condition that renders them disabled for at least one calendar year or more and have income and resources below a certain threshold established by the Social Security Administration.

It is essential to understand the differences between these two types of benefits because depending upon which type you receive, and how inheritance will affect your benefits differently.


How Will An Inheritance Affect Each Type of Benefit?


SSDI Benefits


The good news for those receiving SSDI benefits is that SSDI benefits are typically not affected by receiving an inheritance. SSDI benefits are obtained based on an individual paying taxes from their salary to the Social Security Administration. These benefits are not based on having income or resources below a certain level. They are simply based on the individual meeting the qualifying factors to receive benefits and being “insured.” As a result, an individual receiving an inheritance may do so without concern that it will affect their eligibility for benefits. Unfortunately, the same is not true for those receiving SSI benefits.


SSI Benefits


Unlike the case with SSDI benefits, in order to receive SSI benefits, the individual receiving the benefits must have income and resources below a certain level. Although this amount may change slightly from year to year, as determined by the Social Security Administration, it’s usually only a few thousand dollars. In 2023, for example, the asset limit in order to receive SSI benefits is $2,000 for an individual or $3,000 for a couple. Certain resources are typically excluded from being considered in this amount, including: 

  • A home
  • A vehicle
  • Household goods and personal effects
  • Burial Plots and Funds (up to $1,500)
  • Other assets like life insurance (up to $1,500 or less)

Because there are income and resource limits, suddenly receiving a great deal of money in the form of inheritance may put a beneficiary over the legal threshold to continue receiving benefits. Typically, an individual receiving an inheritance must report receipt of the inheritance to the Social Security Administration within the first ten days of the month following the receipt. Understandably, this can be troubling for those who receive benefits and want to continue doing so.


While this may seem discouraging, the good news is that there are various options available from a financial perspective, including setting up certain kinds of trusts or taking other steps that may allow an individual to receive an inheritance and continue to receive benefits. Talking to a knowledgeable and experienced attorney and a financial advisor is always recommended in these circumstances. Doing so may provide insight into your unique situation and options available that you may wish to consider and implement to put yourself in the best financial position possible. At Disability Experts, we’re here for you.


Disability Experts – Your Social Security Advocates 


If you are disabled and receiving disability benefits from the Social Security Administration, you want to do all you can to protect those benefits. If you are not yet receiving such benefits, you understandably want to seek the compensation you need and deserve. At Disability Experts FL, we are here to help. Our talented and experienced team of disability attorneys understands every aspect of the law surrounding these benefits. We know the best legal strategies to pursue on your behalf, and we are here to guide you through the process every step of the way. If you're ready to get started, give us a call. We look forward to speaking with you soon.






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