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The Truth About Inheritance & Social Security Disability Income

Inheritance & Social Security Disability IncomeThere are a lot of misconceptions around Social Security Disability Income (SSDI), and how monetary inheritance and endowments can affect it. This article will help dispel speculations and set apart fact from fiction when it comes to inheritance and Social Security disability income.

Defining Social Security Disability Income (SSDI)

First and foremost, let’s define what SSDI is. It is not a form of welfare. SSDI is an early retirement income for someone who has worked and earned Social Security credits, but is unable to work due to a disability. SSDI benefits are only available to individuals with severe, long-term disabilities.

SSDI is funded through payroll taxes. Individuals can earn up to four Social Security work credits a year that go towards SSDI. The amount of work credits necessary for an individual to qualify for SSDI depends on their age and when they became disabled. The amount of monthly benefits an individual receives is based on their earnings record.

Qualifying for SSDI is based on the individual’s work credits and proof of a disabling condition that prevents them from being able to work — it is not affected by how much money an individual can have or receive by inheritance.

Defining Supplemental Security Income (SSI)

SSDI is often confused with Supplemental Security Income (SSI), but it is very different.

SSI is a form of welfare. Individuals that receive SSI did not earn the amount of Social Security credits necessary to be eligible for SSDI. SSI has nothing to do with work history, and is solely based on financial need. To be eligible to receive SSI, an individual must have $2,000 in assets or less and a very limited income. Couples with $3,000 in assets or less and a limited income also qualify.

Therefore, because SSI is a form of welfare, it restricts the amount of assets and inheritance an individual can receive. The Social Security Administration (SSA) counts any type of in-kind support as income, and subtracts the amount of money received from the SSI payment.

Other Circumstances When Inheritance Can Jeopardize Benefits

It can be hard to know if an individual will need assistance or benefits later down the road. Inheritance can sometimes interfere with an individual receiving certain forms of government assistance – including housing allowance, food stamps, and Medicaid assistance.

If an individual is left an amount of inheritance that the government deems significant to cover care costs, then that individual may be denied assistance and benefits offered by the state. To avoid this from happening, inheritance can be left in a Special Needs Trust or a Pooled Trust. Funds in these trusts can be accessed to supplement governmental benefits, but will never replace them.

M. Stanley Whitehead is an experienced Houston disability denial attorney who helps clients across the United States to fight unfair Social Security disability denials. If you were wrongly denied benefits, contact us today at (713) 993-7311.

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