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What Happens if You Inherit Money While on Social Security Disability?

What Happens if You Inherit Money While on Social Security Disability?
Medicaid Planning
Jason Neufeld
November 2, 2022

Inheriting money can be life-changing. But what if that inheritance negatively impacts your eligibility for the social security benefits you need?

An elder law attorney in Florida can help you determine if your inheritance will jeopardize your benefits and help you navigate your options.

Read on to find out what happens if you inherit money while on Social Security Disability – while receiving Social Security disability benefits.

Do You Have SSI Disability or SSDI Disability?

Now, what's really interesting about this question is, it can be tricky because there's more than one disability program and they have very different implications if you inherit money. And they're both commonly referred to as disability and lots of people say they have social security disability without knowing which of these programs they're on.

Again: both SSDI and SSI are sometimes referred to as "disability"

SSDI stands for: Social Security Disability Insurance
SSI stands for: Supplemental Security Income

So, I'm going to tell you kind of how to tell the key differences between SSI and SSDI - and then what the consequences are for inheriting money, coming into money, selling a house, or getting a personal injury settlement. You can also choose to watch this video: 

There is SSDI and SSI.

SSDI is a program that gives you access to your retirement early. SSDI is for people who have worked a certain number of quarters, have paid into the system, and become disabled prior to reaching age 65 (there are a few exceptions, but this is the general rule).

You are then entitled to the SSDI program.

If you wait two years (with several exceptions) after being approved for SSDI, you are entitled to receive Medicare.

Comparing SSDI to SSI

I now want to compare and contrast SSDI with SSI.

SSI is a program that you get because you are disabled, whether you’re under the age of 65 or over the age of 65, and your income is also under a certain amount.

In the year 2023, that monthly income limit is $914.00 (this income threshold changes every year).

If your income is below $914.00, you can apply for SSI - if you are also disabled or over the age of 65.

Basically, they will bring your income up to $914.00. So as an example, if your income is $913.00 and you apply, you will be entitled to $1 of SSI payments every month.

Now, some people go, ‘Why would we do that? Who cares about $1?’ Well, the reason why that's important for many individuals is because if you have SSI – even one dollar worth – it automatically entitles you to Medicaid.

Not Medicare; but Medicaid.

There is no waiting period. As soon as you're eligible for SSI for at least one dollar’s worth per month, you are then automatically essentially enrolled in your state's community Medicaid program.

So again, SSDI gets you Medicare; SSI gets you Medicaid.

To make things just slightly more confusing: It is possible to be entitled to both SSDI and SSI. It is also possible to receive both Medicare and Medicaid.

How Does an Inheritance Impact Disability benefits? 

Now let's go back to the original question. If you receive an inheritance, personal injury settlement, or any sum of money, while on Social Security disability, what happens?

  • If you're on SSDI only, nothing happens. This is because SSDI is not a needs-based program, meaning that you could have a million dollars in the bank or own any number of assets and you would still be entitled to your SSDI and your Medicare.

That's because you paid into the system while you were working. It's kind of like paying an insurance premium and now you're collecting your insurance policy – it doesn't matter how much money you have.

  • However, if the disability you have is SSI, then receiving money will jeopardize those benefits. And that's a very good reason to call a law firm such as ours if you or your loved one resides in the state of Florida.

At Elder Needs Law, we can talk to you about the different legal and ethical ways to protect the inheritance, the personal injury settlement, the proceeds from the sale of your house, or however you're coming into money to protect the SSI and your Medicaid benefits.

Give us a call and schedule a consultation today!


Find more helpful resources:

●     Can I sell a house and keep Medicaid benefits in Florida?

●     Can I keep Florida Medicaid if I temporarily have more than $2,000?

●     Dual eligibility for Medicare and Medicaid: What it means for you

●     Florida asset protection: What is an estate plan?

●     Your options for receiving Medicaid benefits after a personal injury settlement

Jason Neufeld

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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