Will Receiving an Inheritance Affect My Disability Benefits?

For people who cannot return to work because of a disability, Social Security Disability Insurance (SSDI) can help them make ends meet. However, unexpected windfalls like inheritance can present complications to benefit recipients.

Receiving inheritance should not interfere with your receipt of SSDI benefits, but the sudden influx of money might be a red flag for the Social Security Administration (SSA). Inheritance is not used to determine whether someone is eligible for disability benefits, and receiving an inheritance should not prevent you from being approved for SSDI or terminate any current benefits. SSDI is based on your work history, not how much money you currently have. If your benefits are denied or terminated because of inheritance, an attorney can help you file an appeal. A lawyer can also help you notify the SSA of your inheritance to prevent any unnecessary hold-ups in your benefits.

If you are applying for disability benefits or are currently receiving them, an inheritance should not affect your benefits. If your benefits are stopped or denied because of inheritance, call our Arkansas disability benefits attorneys for help at (479) 316-0438.

How Inheritance Affects Your Disability Benefits

According to the SSA, SSDI benefits are not based on income or wealth but are instead based on your work and earnings history. Generally, eligible recipients must have worked long enough and recently enough at a job or jobs covered by Social Security. Your benefits are based on how much you earned during these working years, not how much money you have. Contrary to what many people mistakenly believe, disability benefits are not based on need or income.

This means that a recent inheritance should not affect your disability benefits or prevent you from being approved for disability benefits. Inheritance is not part of your work or earnings history and should not factor into your disability benefits at all. Unfortunately, the SSA might confuse the inheritance with earned income and deny your benefits or pause them until the situation can be sorted out.

With SSI (Supplemental Security Income), the needs-based Social Security disability program, there are “resource limits” that an inheritance could affect. People on SSI for a disability cannot have more than $2,000 in assets, so an inheritance would potentially disqualify you for benefits. However, these resource limits do not apply to people on SSDI.

Our Bentonville, AR disability benefits lawyers can help you plead your case to the SSA to get your benefits approved or to resume receiving benefits.

Is Inheritance Used to Calculate Disability Benefits?

Inheritance is not used to calculate how much money you receive in disability benefits. As mentioned above, disability benefits are not determined by a person’s financial need. This means you could inherit a very large sum of money and still be eligible for disability benefits as long as you meet the necessary criteria. Our Fayetteville disability benefits attorneys can help you make sure any inheritance does not interfere with your benefits.

Disability benefits are calculated using your working and earnings history. Your work and earnings history is used to determine how many “work credits” you have. Work credits are based on total yearly wages earned, and a person may earn up to four credits each year. The amount of income needed for a single work credit fluctuates yearly, but in 2022 it was one credit for every $1,510 in wages or self-employment. Once you’ve earned $6,040, you have four credits for the year.

The number of work credits necessary to qualify for disability benefits varies based on how old you were when your disability began, but it is usually around 40 credits with 20 credits earned in the last 10 years. Younger disability benefits recipients may need fewer credits.

Because inheritance is not considered earned wages or income from self-employment, it does not factor into your work credits or disability benefits. If you receive an inheritance while also receiving disability benefits, or if you received an inheritance in the past, your benefits should remain unaffected.

What if My Disability Benefits Are Denied Because of Inheritance?

Suppose your disability benefits are denied, paused, or terminated because you received an inheritance. In that case, our disability benefits lawyers can help you appeal your case and get your benefits approved or resumed. The stopping of disability benefits because of inheritance is a serious mistake and should be brought to the attention of the SSA immediately.

Depending on the nature of your situation, we can help you file an appeal. An appeal may be appropriate if your application for benefits was denied because of inheritance or if your benefits were paused or terminated. We have 60 days from the date a decision was made on your case to file an appeal. There are four levels of appeal that we might have to go through:

  • Reconsideration
  • Hearing with an administrative law judge
  • Review by the appeals council
  • Federal court review

If your application for disability benefits was denied because of an inheritance, there is a chance that the application was filled out incorrectly. The SSA might mistakenly believe the inheritance was income from substantial gainful activity, which is not allowed under disability benefits eligibility criteria. We might be able to clear up the mix-up and have your application reconsidered.

Do I Need to Report Inheritance to the Social Security Administration?

If you have recently received an inheritance or will receive an inheritance soon, it might be a good idea to notify the SSA to prevent any confusion. This is especially important if you have a pending application for disability benefits or are currently receiving benefits. Our Fort Smith disability benefits lawyers can help you contact the SSA and explain your situation, so there is no interruption to your benefits or adverse decisions against your application.

If you have not yet submitted your application for disability benefits, it is crucial that you allow our disability benefits lawyers to review your application for completeness and accuracy. The application process can be complex, and simple mistakes, like indicating inheritance as substantial gainful activity, may lead to a denial.

Call Our Disability Benefits Attorneys for Help Immediately

Receiving an inheritance, no matter how large or small, should not affect your eligibility for disability benefits. If you experience an interruption in benefits or your application is denied, call our Springdale, AR disability benefits lawyers for help immediately. Call us at (479) 316-0438 as soon as possible.