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Lane
Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 10104
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
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I am on SSI disability and have recently received an

Customer Question

I am on SSI disability and have recently received an inheritance. Do I need to report it to SS adminisrtation?
Submitted: 4 months ago.
Category: Social Security
Expert:  Lane replied 4 months ago.

Hi,

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So sorry, yes.

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An inheritance wouldn't affect SSDI, but becacsue SSI is meanss tested, you do need to report this.

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The rule is that you have up to ten days following the end of the month in which the change occurred to report the change.

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I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content. Otherwise I’m working for no crediting at all here.

Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 4 months ago.

By the way, if you are on SSI (as opposed to SSDI) then there are some things that you might want to consider.

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There are two components to the needs testing for SSI; Income (money received) and assets (money held)

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Receiving the money will definitely affect your SSI in the month you receive it .... but then, if you simply put it in the bank, it would eliminate your SSI for FUTURE months (until such times as the amount would have covered the SSI amount) - 733/month, I believe

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So, although there's really nothing you can do about the one month you receive it, there MAY bbe some things you can do, NOT to have it counted as an available asset in future months.

Expert:  Lane replied 4 months ago.

Because the resource limits for SSI and Medicaid are so low, the receipt of a lump sum, including an inheritance or a settlement, can easily disqualify the individual.

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So upon the receipt of sums in excess of the resource limits, you can opt to (1) discontinue benefits, (2) shelter the excess amounts in certain types of special needs trusts, or (3) attempt to re-qualify for benefits through a process known as a “spend down.”

Expert:  Lane replied 4 months ago.

In order to minimize the loss of SSI and Medicaid, goods and services must be purchased in the same calendar month in which the lump sum is received.

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(You don't have a period of a month or 30 days to complete the spend down. If a lump sum is received on the 20th of August for example, the spend down must be completed in 11 days to bring resources below the applicable limit before September 1.)

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Expert:  Lane replied 4 months ago.

Here's a list of exempt expenditures that the lump sum recipient could make and still qualify for SSI:

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  • Purchasing a home; paying off a mortgage on a home; paying rent for that calendar month only; modifying a home to accommodate an individual’s disabilities; home repairs, remodeling, or deferred maintenance expenses (including landscaping)
  • Purchasing home furnishings or appliances
  • Medical expenses/bills not covered by Medicaid or Medicare (e.g., better quality wheelchair than what is authorized by Medicaid/Medicare)
  • Dental expenses, eye glasses, physical therapy, support services not covered by any benefit program
  • Education expenses (including computer, software, books, etc.)
  • Entertainment/recreation expenses (books, magazines, movie/concert tickets, sporting events, audio/video equipment)
  • Vacation travel (airline tickets, train/bus passes, food & shelter while temporarily away from home on vacation, etc.)
  • Pay an attorney to do estate planning and/or Medicaid planning
  • Pay off debts (existing credit card debt, loans with supporting paperwork)
  • Pre-pay burial arrangements
  • Personal hygiene (haircuts, manicures)
  • Purchase an automobile, pay for registration and insurance
  • Purchase clothing
  • Set aside up to $2,000 for a single person, or up to $3,000 for a married couple, in non-exempt resources, e.g., in savings, checking, etc.
Expert:  Lane replied 4 months ago.

Finally, the spend down has to be reported to Social Security by the 10th day of the month following the month in which the lump sum was received.

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State Medicaid agencies have similar (some even earlier) reporting requirements. Here are some guidelines (from the special Needs Alliance) to follow in order to properly prepare for the reporting:

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  • Keep sufficient funds in a bank account to repay SSI benefits for the month in which the excess funds were received—but remember that this amount needs to be included as part of the individual’s countable resources.
  • Keep receipts for all items or services purchased, including payments for home remodeling.
  • The beneficiary must be on the title to any real property or vehicle purchased with the lump sum.
  • The beneficiary must be the loss payee for any auto or homeowners insurance purchased with the lump sum.
  • Make copies of current bank statements from all accounts, as well as a printout on the last day of the month showing the balance as of that day.
  • Checks to purchase items and services should clear the beneficiary’s bank account by the last day of the spend-down month. If there is any question that a check may not clear the account in the month, payment should be made by certified check or a cashier’s check.
  • Have the bank provide documentation of the bank balance on the first day of the next month to verify the spend down was successfully completed.

An individual may have spent down the lump sum in the month of receipt, but an SSI check or other monthly income is deposited into the account at the beginning of the next month, pushing the bank balance above the non-exempt resource limit. That will not be a problem because the SSI check or other monthly income is not counted as part of the resource limit in the month the income is paid to the individual.

Expert:  Lane replied 4 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here

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Thank you!

Lane

Expert:  Lane replied 4 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

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Let me know…

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Thanks

Lane

Expert:  Lane replied 4 months ago.

Hi,

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Did you see my answer?

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Again, there ARE somethings you can do here

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Let me know if I can help more here.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here. Thanks!

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