How does receiving inheritance affect Social Security Disability?

On Behalf of | Jan 31, 2022 | Social Security Disability

The Social Security Administration has set rules that govern how an inheritance can impact any New Jersey residents who receive disability benefits. The issue with an inheritance is that there are two distinctly different programs for those who are disabled. One program is an insurance system where beneficiaries must qualify per their employment tax deduction record. The other is based on financial need and the amount of assets an applicant may own. There are many individuals who receive disability of some type who are not affected by any inheritance, while there are some who will lose their benefits entirely.

Social Security Disability Insurance

The first program all disability applicants will want to qualify for is Social Security Disability Insurance. The intake information for each program is the same regarding personal information, and then the information is used to determine Social Security tax payment records for establishing Social Security Disability Insurance eligibility. Those with 20 work credits in the past 10 years based on quarterly earnings tax payments are awarded SSDI if determined disabled by medical evidence.

Supplemental Security Income

All applicants are evaluated first for SSDI, and then the ones who are not qualified are evaluated for Supplemental Security Income eligibility. Being eligible for Supplemental Security Income, or SSI, requires the applicant to have less than $2000 in personal monetary assets, including life insurance. Exemptions are made for ownership of one vehicle of a reasonable value and one primary residence. SSI recipients are typically disqualified for benefits if their total monetary assets exceed $2000, or $3000 if married.

There are also trust funds that can be set up to help disabled beneficiaries have limited access to some of their inherited assets. This can also help recipients maintain their eligibility for Medicaid due to trust funds being technically the property of the trustee.