Social Security disability

Question: My cousin, for whom I am Power of Attorney, is disabled after more than 30 years as a housekeeper. She receives disability Medicare, PERA disability and long term disability from her work. She is very frugal and has more than $25,000 in savings. Her sister says this will affect her social security payments and so says that my cousin should shift money to savings in the sister's name. Does your net worth affect your disability social security payments? Would it affect her social security when she reaches 66? Margaret, Coon Rapids, MN

Answer: I wouldn't shift over the savings, at least not without consulting with an attorney first, preferably an eldercare attorney. That's a general rule before doing anything along the lines of shifting assets and money around.

In the world of government programs and benefits terminology really matters. With Social Security and Social Security disability benefits assets and savings don't matter. They don't figure into the calculation. She can own a home. She can invest in the stock market. She can have a savings account. The reason is that she paid into Social Security all the years she was working. The disabiity benefit she's now getting was part of her FICA.

However, there is another program where assets and savings do matter. It's the SSI or supplemental security income program. It's a need-based program. Among the rules governing SSI is that recipients can't have more than $2,000 in a savings account that's in addition to what is needed to meet ongoing expenses.

Again, I would consult with an attorney.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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