Can I Give Away Money and Still Retain My SSI Benefit?

If an SSI recipient gifts money, they could lose up to three years of SSI eligibility. In order to calculate the period of ineligibility, the amount transferred is divided by the transferor’s monthly SSI benefit (including the state supplement), rounding the result up or down to the nearest whole number.

An Inheritance Example

Eric, who receives SSI benefits ($900/month), inherits $30,000 from his grandmother at her death. Concerned about his benefits eligibility, he gives his entire inheritance to his brother immediately. Unfortunately, this won't help. The best he could have done was refuse the gift and have it passed to the next beneficiary, assuming there was one. His grandmother needed to be aware of the impact her gift could have on her grandson's SSI and get legal or financial advice to avoid it.

Instead, the Social Security Administration (SSA) divided the transferred amount ($30,000) by Eric's SSI benefit ($900) to determine an ineligibility period of (33 months). Eric becomes ineligible for SSI for nearly 3 years. This is certainly not what his grandmother would have wanted. She was only trying to help.

Preparation and Protection

Eric and his grandmother should have discussed their situation together with an experienced special needs planner to learn about legal strategies, including special needs trusts. There are ways to protect government benefits while still allowing family members to contribute gifts to improve a loved one's quality of life. Learn more about gift transfers and SSI.

If you receive disability benefits and believe you may inherit money, or you want to give a gift to a loved one with a disability that could jeopardize their benefits, find a special needs planner near you for advice.