Supplemental Security Income (SSI) Benefits

Supplemental Security Income (SSI) is a needs-based program that provides monthly payments to elderly, blind, or disabled people with limited income and resources.  SSI is different from Social Security retirement benefits, which are paid to people who have worked and paid Social Security taxes for many years. The Federal regulations governing SSI state that all resources (including checking and savings accounts, certificates of deposit, etc.) need to be spent down before an SSI recipient can qualify for benefits.  The regulations also place a limit on the value of a real estate that an individual may own and still remain eligible for SSI.

Eligibility for SSI

In order to qualify for SSI, you must meet all of the following criteria:

  • You must be age 65 or older, blind, or disabled.
  • You must have limited income and resources.
  • You must be a citizen or national of the United States or meet the requirements for status as an alien lawfully admitted for permanent residence.

How to Inherit a Home Without Losing Your SSI Benefits?

There are a few different ways that an SSI recipient can inherit a home and still keep eligibility for benefits. Here are some tips:

Sell the home and use the money to pay down your other resources.

If you sell the home and use the money to pay down your other financial resources, you may be able to keep your SSI benefits. The amount of your resources will be reduced below the limit, and you will be able to continue receiving benefits.

Transfer ownership to another family member who is not receiving SSI.

This means that you could give your home to another family member who is not an SSI recipient, such as your spouse, child, or sibling.  Of course, before you do this, you will want to make sure that the other person is able and willing to keep up with the financial demands of owning a home.

Transfer ownership to a trust created for your benefit.

A special type of trust called a “special needs” trust can be set up where the title to your home is transferred to the trust. The trust can then be managed by a trustee who will make sure that the property is used for your benefit.  This option can be especially useful if you have a family member who is not able to care for you and you would like them to be able to live in the home after you die.

Keep the home and rent it out.

If you keep the home and rent it out, you will be able to receive rental income without affecting your SSI benefits. However, you will need to make sure that the rent is reasonable and that all of the necessary taxes and repairs are taken care of.

Tips for Inheriting a Home While Receiving SSI Benefits

  1. If you are considering any of these options, it is important to consult with a financial advisor to find out how they may impact your eligibility for SSI benefits.
  2. If you are considering transferring your home to an individual or trust, it is important to have the proper estate planning documents that transfer ownership of the property into the name of your family member or trustee. 

This means having a deed prepared so that there is clear evidence of ownership of the property.

  1. If you are considering transferring ownership of your home to a family member who is not receiving SSI benefits, remember that the other person will be responsible for all of the responsibilities and costs associated with owning a home.
  2. If you are considering selling your home in order to create financial resources, it is important to know that if you sell your home for less than the value, you can still lose your SSI benefits. 

This is because the amount you receive from the sale of a home will be counted as income for eligibility purposes.

  1. It is important not to give up your SSI benefits unless there are no other options available to ensure that you have enough financial resources to live on without them.

Work With a Financial Advisor

A financial advisor can help you sort through your options and choose the best strategy for receiving an inheritance without losing your SSI benefits. They can help you understand how each option will impact your benefits and what you need to do in order to maintain eligibility. A financial advisor can also help you plan for the future and make sure that you have enough resources to live on even after you stop receiving SSI benefits. Lastly, a financial advisor can help you manage your money and make sure that you are getting the most out of your finances.

Final Thoughts

Inheriting a home can be a blessing or a curse, depending on your circumstances. If you are receiving SSI benefits and are fortunate enough to inherit a home, it is important to know your options and how they may impact your benefits.  It is also important to seek legal and financial advice so that you can make the best decision for yourself and your family. Remember that you should never give up your SSI benefits unless there are no other options available to make sure that you have enough financial resources to live on without them.  The benefits that you receive from SSI can be invaluable, and it is important not to jeopardize them without good reason.

You can consider several options for receiving your inheritance without losing your benefits. One option is to set up a trust, where the property is held in the name of the trust and used for your benefit. Another option is to sell or transfer ownership of the home to a family member who is not receiving SSI benefits. If you decide to sell the home, it is important to know that you could lose your benefits if you sell for less than the value. You can also rent out the home and receive rental income without affecting your benefits. However, you will need to make sure that the rent is reasonable in order to avoid having the rent count as income. Lastly, you can consult with a financial advisor to find out how to best manage your finances and ensure that you have enough resources to live on.
If you have a disabling condition that requires a live-in aide, then your benefits will not be affected as long as you continue to receive care and supervision. In addition, Social Security rules allow for reasonable compensation for caregivers under certain circumstances. You can receive more information about reasonable compensation by contacting your local Social Security office.
If you move into the home that you inherited, your benefits will continue to be paid as long as you live in the home and it is your primary residence at the time that you apply for SSI benefits.
The value of the home will be counted as income for SSI purposes, but any mortgage payments or other debts on the home will be deducted from the value. In addition, if you receive any money from the sale of the home, that money will also be counted as income.
Yes, you can transfer ownership of the home to your spouse as long as he or she is not receiving SSI benefits. The home will then be considered the spouse's primary residence, and your benefits will continue to be paid.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.