Will an inheritance affect my SSDI? Here’s what you need to know if you receive benefits and are named as a beneficiary.
People who receive Social Security disability benefits might be concerned about anything that can interfere with their benefits. The good news is, because SSDI is an entitlement and not a needs-based program, there aren’t too many things that can interfere with what you’re receiving. But this doesn’t mean nothing can affect it.
“Will an Inheritance Affect My SSDI?”
Here’s what you need to know.
SSDI vs. Other Disability Programs
It’s essential to know the different types of disability benefits available and the ones you’re receiving. This is one of the most important factors when it comes to concerns about losing your benefits.
There are two disability benefits programs managed by the Social Security Administration.
The first is Social Security Disability Insurance (SSDI), the program funded by the wages of employees and self-employed people. Workers contribute to the program by earning money from their jobs. Anyone who has contributed to SSDI for ten years or more is eligible for these benefits.
Eligibility for an SSDI benefit is based on age, disability, and how long someone worked. You can use the Benefit Eligibility Screening Tool to determine if you qualify for benefits. You can also apply for benefits online, by phone, or in person.
The second type of disability benefits program is Supplemental Security Income (SSI). This is a special needs-based program. The government funds this program, and there is no need for someone to have worked to obtain SSI eligibility.
Despite the ability to receive these government benefits without having worked, there are stricter regulations for who qualifies as an SSI recipient. To receive SSI benefits, you must earn below a certain income and have limited assets.
How Is Inheritance Treated by Disability Programs?
Now that you understand the different types of disability payments, it’s essential to recognize how each treats inheritance money.
What Is Inheritance?
According to the Social Security Administration, an inheritance is “… cash, a right, or a non-cash item(s)” received when someone dies.
Inheritance has value and can fund your basic needs. It is money you can use to support yourself wholly or in part, depending on the amount.
It is also treated differently depending on whether you receive SSDI or SSI. This article explains more, “How does inheritance affect SSDI?”
Does Inheritance Affect Social Security Disability?
As a Social Security Disability Insurance (SSDI)-eligible individual with a work history, you contributed to the program via payments deducted from your paychecks. Because of this, you do not need to worry about inheritance, your income, or any other assets you have or money you receive.
You are entitled to the money you’ve contributed to the program, regardless of your net worth or income.
This is different from SSI. SSI is a needs-based program. It doesn’t require you to contribute to receive these government benefits. You receive benefits based on your financial need. Here’s a great article that talks about whether you can get SSDI and SSI at the same time.
Simply put, any inheritance you receive does not affect social security disability benefits.
Does Anything Put SSDI Benefits at Risk?
Yes. Some things can jeopardize your Social Security Disability Insurance (SSDI) benefits, including:
- Substantial Gainful Activity (SGA)
- No qualifying disability
- Retirement age
- Conviction of a crime
What If My Health Changes?
SSDI benefits do not change if your condition worsens because the benefit is based on your earnings history, not the level of your disability. Approval of your SSDI claim means the Social Security Administration determined you to be fully disabled. It defines fully disabled as an illness or injury that prevents you from doing most work and is expected to last at least 12 months or end in death.
Can I Receive SSDI and SSI Benefits?
Some people receive both SSDI benefits and SSI benefits.
This is known as concurrent benefits. But keep in mind that receiving SSDI benefits can reduce your SSI payment. It can also make you ineligible for one because each program’s intent and eligibility criteria differ.
It’s also possible to receive Medicare, Medicaid, and other benefits when receiving SSDI. You’ll just need to qualify for each of the programs individually.
This article dives into receiving SSDI and SSI Benefits in more detail.
Applying for SSDI
You can apply for SSDI benefits online, by phone, or in person. It’s important to know that there is a waiting period after you’ve applied. Even if you’ve been disabled for a few weeks or months, you may need to wait after you’ve applied for benefits.
SSDI payments begin after a five-month waiting period. The clock starts with the date you became disabled, not your application date. Your first payment will be for the sixth full month after that date.
The date your disability began (onset date) is different from when your claim was approved or when you applied. Your onset date is when you became unable to work due to your medical condition. It could be days, weeks, or months before you file for benefits.
Since the process takes some time and there is a possibility of getting denied, many people find it helpful to receive guidance from an attorney when applying for SSDI. Check this article out for more information on that, and feel free to apply here directly.
What Should I Do If I’m Receiving SSDI Benefits and I’m Named as a Beneficiary?
You don’t need to do anything. Your benefits should not change, no matter the amount of inheritance.
It is a good idea to speak to a financial planner if you experience a significant change in income if you’re dealing with a disability. They can help you manage your money better and determine how to protect your assets. However, you don’t need to worry about an inheritance changing your benefits.
Some people are qualified to help you if your SSDI or any other Social Security benefits are denied. There are also tools available to help you if you need to protect inheritance money when you’re receiving SSI benefits.
If you recently became disabled, we can help you apply for disability benefits.