Dear Penny: My Daughter Who’s Disabled Inherited $90K. Will She Lose Benefits?

A woman lifts her son up into the air while laying on their bed. Her son is a toddler.
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Dear Penny,

My daughter, who is 29, disabled and a single mom of two, just inherited $90,000 from her uncle. Will she lose her Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) and her children’s government health insurance?

Also, she only gets $932 per month from her SSI and SSDI, but when she tried to get SNAP benefits for her household, she was told she makes too much money from SSI and SSDI. Why do I know someone else whose husband makes $100,000 per year and they get free housing, SNAP and government health insurance? I don’t understand how that works.

— Concerned Mama

Dear Mama,

An inheritance is considered a change in resources, so your daughter is required to report the inheritance to the Social Security Administration within the first 10 days of the month following the month she receives the inheritance. The SSA will recalculate her benefits with the new information.

SSDI benefits are based on your daughter’s past work and payments into Social Security, so they don’t have income limits. Her SSDI payments should be unaffected by the inheritance.

SSI and Medicaid benefits, however, are income- and asset-based, so the inheritance will likely affect the family’s eligibility. The benefits come with absurdly low limits on assets: $2,000 per individual or $3,000 per couple. If your daughter receives the inheritance money all at once, it would certainly put her over those limits and make her ineligible and push her children off of Medicaid.

However, the SSA makes an exception for assets held in what’s commonly called a “special needs trust,” which is any trust established for a disabled person under 65 years old that meets the state’s requirements. Typically this trust would be established before the inheritance is accepted, but I recommend speaking with an estate attorney and an SSA representative to discuss whether moving the funds into a trust now would preserve your daughter’s and her children’s eligibility while helping secure their future.

Also speak with an attorney before transferring the money to anyone else; a transfer of resources can also affect benefits eligibility.

The net monthly income limit to be eligible for SNAP benefits (the Supplemental Nutrition Assistance Program) is $2,072 per month for a household of three in 2024 (and goes up as the size of the household grows). All people in a household who buy and prepare meals together are counted for this eligibility. If your daughter lives with anyone else who earns income, or earns income from another source, the combined income might be over the limit for SNAP benefits.

SNAP is administered by the state, so contact a state representative if she’s being denied but believes she meets the requirements.

Re: the other couple you mentioned, I recommend keeping your eyes on your own paper. Every person’s financial situation and needs are very personal, and there’s often a lot going on beneath the surface that we don’t know about.

Dana Miranda is a Certified Educator in Personal Finance®, author, speaker and personal finance journalist. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.