Lump Sum Payments and SSI Eligibility


This publication tells you how a lump sum payment can affect your SSI. Lump sums are things like a retroactive check, an inheritance or a gift. It gives different ideas for spending or saving the lump sum. It tells you how to report it to Social Security. It tells you how to get help if you have questions about lump sum payments.

Note: This publication contains general information only.  Everyone’s situation is different.  Be sure to consult an attorney or advocate knowledgeable in these matters for specific advice.

Many people have questions about how a lump sum (one-time-only) payment will affect their eligibility for Supplemental Security Income (SSI). This publication will discuss how lump sum payments affect eligibility for SSI.

1. What is a lump sum?

A nonrecurring lump sum payment is a one-time payment of money that you do not expect to receive again in the future.  It does not include your monthly Social Security payment such as SSI. 

2. What are some examples of lump sums?

Examples of lump sum payments include a one-time retroactive Social Security check, retroactive IHSS payments, a gift, inheritance, lottery winning, and money received to replace income or a resource.

3. How can a lump sum affect my SSI benefits?

It may reduce the monthly SSI you receive or make you ineligible for SSI. This is because your income and resources can affect your monthly SSI amount.  First, it is important that you understand some of the SSI eligibility requirements and how the SSI program determines how much SSI you get every month.  See Question 7 below for how the SSI program determines your eligibility. 

4. What is income?

Income is any item an individual receives in cash or in-kind that can be used to meet their need for food or shelter.1 “In kind” income means nonmonetary assistance, or assistance in the form of goods or services (such as food or shelter) instead of money.2

In terms of SSI eligibility, there is also “earned” and “unearned” income that is used to determine your monthly benefit amount.  Earned income is income that may be received in cash or in-kind and consists of wages, net earnings from self-employment, payment for services performed in a sheltered workshop, or royalties earned by an individual in connection with any publication of their work.3 For more information on earned income in the SSI program, visit

Unearned income is all income that is not earned income.5 For example, retroactive Social Security benefits and in-kind support6 are considered unearned income.  For more information on unearned income, visit  For more information on in-kind support, see our publication at SSI Applicants and Recipients: Learn About In-Kind Support and Maintenance (ISM).  Some unearned income does not count toward your SSI eligibility.  You can look up a list of unearned income classifications that do not count for SSI eligibility here: and

There are also things that are not considered income.8 An item is not income if it is neither food nor shelter, or it cannot be used to obtain food or shelter.9 For example, if someone pays for your medical bills, your telephone bill, your vet’s bill, or you receive free medical care, that value is not considered income to the you.10 However, even if an item is not considered income, it can still be considered a resource, which is explained below.

Other things are considered income but are excluded in determining your monthly income. The first $65 of any monthly earned income plus one-half of remaining earnings are excluded for SSI benefit computation purposes.11 The first $20 of any monthly unearned or earned income is excluded also.12 There are a number of unearned income exclusions in the SSI program, such as burial funds, child support, educational assistance, food stamps, and others. For a list of unearned income exclusions, visit

5. What is a resource?

A resource is something you own, such as cash, land, life insurance, personal property, or anything else you own which could be converted to cash and used for food or shelter.13 In addition, what you receive from the sale or exchange of a resource, such as a house or a car, is not considered income but rather remains a resource.  See section 7(d) below.

An individual can only have $2,000 worth of nonexempt resources and a married couple $3,000 worth of resources on the first moment of the first of the month (midnight on the first of the month.)14 Otherwise, you are ineligible for an SSI payment for that month.  This means that if you receive a payment that will become a countable resource in the following month, you must spend down to the $2,000 ($3,000) countable resource level before the beginning of the month following receipt in order to remain eligible for SSI.  Note:  The amount of money in your bank account on the first is the amount shown minus any outstanding checks (checks that have not yet been paid out of your account.)15

Some things are excluded from resources, which means they are not counted toward your resource limit. They are exempt resources. These include household goods, one car,16 housing assistance, or burial spaces.17 For more examples of excluded resources, visit

6. What is deeming?

Sometimes the income and resources19 of your spouse or parents (if a child is under age 18) can count toward your eligibility for SSI. This is called “deeming.”  Deemed income is the part of the income of your spouse with whom you live, your parent(s) with whom you live, or your sponsor (if you are an alien), which the SSI program uses to compute the amount of your countable income and thus your eligibility and the amount of the SSI benefit.20 For more information on spousal deeming, visit For more information on deeming for children under age 18, visit

If you are a child receiving SSI, any resources in excess of $2,000 for a single parent or $3,000 for two parents with whom you live will be deemed to you.  As an SSI recipient you are entitled to your own $2,000 resource allowance.  A retirement account owned by a parent or by one spouse is exempt and not deemed if the parent or spouse is not an SSI recipient. 

7. How does the SSI program determine how much SSI I get every month?

SSI is a needs-based supplemental income program for eligible individuals who are disabled, blind, or age 65 and older who have limited income and few resources.23 It is a supplemental income program because it is intended to provide additional income to the income and resources an individual already receives.  The Social Security Administration (SSA) determines your eligibility for SSI based on the amount of income and resources you have.  Remember, you cannot have more than $2,000 in resources as an individual, or $3,000 as a married couple.  For more information on eligibility requirements, visit

The amount of SSI you receive every month is determined by your disability, age and living situation.  See chart:  This amount is then reduced by any countable income you have. Countable income is the amount of income left over applying all appropriate exclusions to the items that are income.24

If your countable income is more than you receive in SSI benefits, you will be ineligible for SSI in the month you receive that income.25 If the countable income is less than the SSI benefit payment rate, the countable income will be deducted dollar for dollar from the SSI payment that you get two months later.26 This process of using your income from a previous month to calculate benefits in the current month is known as retrospective monthly accounting.  For more information on retrospective accounting, visit  

Practice Tip: If you know that the income you receive in a month will reduce the amount of your SSI benefit or will be high enough to make you ineligible for any SSI income at all, we recommend that when you report the income to SSI you include a money order or cashier’s check for the amount of the overpayment. That way your SSI checks will continue without any reduction or interruption. 

8. How are lump sum payments treated?

It depends on the type of payment you are receiving.

a. Retroactive Social Security payments

Generally, a retroactive Social Security payment paid under Title II27 is considered unearned income in the month of receipt.28 If you are going to receive a retroactive Social Security payment, it will also be an exempt resource in the month you receive it and it will remain an exempt resource for the next 9 months after that.29 If you still have the money after the 9 months, it will become a countable resource for SSI eligibility.30

b. IHSS payments

i. IHSS payments made to ineligible spouses or ineligible parents 

An “ineligible” parent or spouse means that they are not receiving SSI benefits.  An IHSS retroactive lump sum payment made to an ineligible parent or spouse, who provides services to their minor child or spouse, is excluded income for deeming purposes—in other words it is not deemed to or counted against the child or spouse who receives SSI benefits, and thus does not affect their eligibility.31 Regular IHSS payments to an ineligible parent or spouse living in the same household are not deemed to the SSI child.32

Although the usual rule is that income becomes a resource the month after you receive it, under a special rule, an IHSS retroactive lump sum payment made to an ineligible parent or spouse is an excluded resource the month following the month of receipt.33 However, it counts as a resource the second calendar month following receipt and would be deemed to the spouse or child if it was a retroactive lump-sum IHSS payment.34 For example, if a retroactive IHSS payment is made to an ineligible spouse in January, the payment will be an excluded resource in February, but a counted resource in March for SSI.35

ii. IHSS payments made to IHSS recipients

IHSS payments made to an IHSS recipient to pay for IHSS services are not counted as income for the recipient’s SSI eligibility.36 It is also excluded as a resource for the month following receipt.37 However, it counts as a resource on the second month following receipt.38 For example, if an IHSS payment is made to an IHSS recipient in January, the payment will be an excluded resource in February, but a counted resource in March.

c. Nonrecurring lump-sum social insurance payments

Nonrecurring lump-sum social insurance payments include railroad retirement benefits, veterans’ benefits, worker's compensation, and disability insurance benefits.39 Under SSI, these benefits are unearned income in the month you receive them and a countable resource in the following month.40 It is important to note that Social Security may count as a resource more or less of the unearned income that you actually received, and the rules are different depending on your situation.41

Example from 20 C.F.R. § 416.1123: Joe, an SSI beneficiary, is also entitled to social security insurance benefits in the amount of $200 per month.  However, because of a prior overpayment of his social security insurance benefits, $20 per month is being withheld to recover the overpayment.  In figuring the amount of his SSI benefits, the full monthly social security insurance benefit of $200 is included in Joe's unearned income.  However, if Joe was receiving both benefits when the overpayment of the social security insurance benefit occurred and we then included the overpaid amount as income, we will compute his SSI benefit on the basis of receiving $180 as a social security insurance benefit.  This is because we recognize that we computed his SSI benefit on the basis of the higher amount when he was overpaid.

d. Replacement of income or a resource

Some items you receive have already been counted as income once in one form or another.  In order to avoid double counting, these items are not counted as income for SSI.  For example, some tax refunds are either not income42 or are excluded from income.43 Life and disability insurance payments to you are not income.44

Money you borrow or money you receive as repayment for a loan is not income but is a resource.45 In addition, some items you receive are not income but a resource.  For example, proceeds from the sale, exchange or replacement of a resource (such as the sale of a car) are not income but are a resource.46 As explained in the Resource section above, these items are considered resources the first moment of the month following receipt.  If you borrow money in September, it is not considered income in September, but will be considered a resource the first moment of October.

If you receive cash for the purpose of repairing or replacing an excluded resource, such as your home, that has been lost, damaged, or stolen, you have 9 months from the date you receive the cash to repair or replace the resource before the cash is considered a resource.47 This can be extended for an additional 9 months if you show good cause.48 Otherwise, the cash becomes a countable resource.49 The cash also becomes a countable resource if you change your intent to repair or replace the property.50

e. Exempt income and resources

Some items are not counted as income or a resource at all.  Disaster relief is an example of something that is classified as “unearned income” but is exempt from your income determination, and is also excluded from your resource limit.51 Another example is payments made to you by a state or local government if you were the victim of a crime.52

f. Other lump sum payments

If you are going to receive any other kind of a lump sum payment (for example, an inheritance, a gift, a life insurance payment, or a bonus from work) it will be countable income in the month you receive it and a countable resource in the following month.53

9. How can I spend down the lump sum payment?

If you receive a lump sum payment, you may want to spend the money down.  You can do this by spending the money on an exempt resource, such as a home, a car, household goods and personal effects, property essential for self-support, term life insurance, a burial plot and burial insurance, or set money aside in a Plan to Achieve Self Support (PASS).54

In addition, if you receive a lump sum and give it away for less than fair market value, you could become ineligible for SSI for up to 3 years. (Discussion of this issue is beyond the scope of this memo.)   For more information, visit

10. What about trusts and ABLE accounts?

If you receive a large lump sum, you may want to transfer the money to a trust or ABLE Account.

a. Trusts

One option may be to put some or all of the money in what is called an OBRA Trust – such as in a pooled trust – so you can use the money to improve the quality of your life without losing your benefits.55

You can also establish a Special Needs Trust.56 Changes in Special Needs Trusts law now makes it possible for the disabled trust beneficiary to establish such a trust for him or herself, instead of requiring the disabled beneficiary’s parent, grandparent, legal guardian, or a court to establish such a trust.57 This change is effective for trusts established on or after December 13, 2016.58 It is important to note that the trust must be created for the beneficiary before they reach 65 years of age.59

To find out more about these and other options, we suggest you contact California Advocates for Nursing Home Reform – – for advice and referral to an attorney specializing in these areas.60

b. ABLE Accounts

You may also check the California State Treasurer website for information about CalABLE accounts.  Available at: If you became disabled before age 26 you may be able to save up to $14,000 per year, and up to $100,000 total in a tax-advantaged savings account called the ABLE account before your SSI or Medi-Cal is impacted.62 This means that if you save money in an ABLE account, the countable resource limits will not apply to you for SSI or Medi-Cal up to $100,000. Also, you can have both an ABLE account and a Special Needs Trust. 

Distributions from your ABLE account do not count as income, and you can use the money from your ABLE account to spend on qualifying expenses, such as housing, transportation, and healthcare.63 Another benefit of an ABLE account is that you can receive a distribution from the account and it will not be counted as a resource as long as you are retaining the amount to pay for a non-housing related qualified disability expense.64 For example, if you withdraw $500 from your account in June to pay for an anticipated medical expense occurring in September, the $500 will not be counted as a resource for June, July, August, or September.65

11. Do I need to report the money to SSA?

Yes.  You have to tell Social Security about the payment as soon as you receive it but no later than the 10th day of the month after the month you receive it.66 For example, if you receive the payment in December, you would have to tell Social Security about it by January 10th.

12. What should I do if I receive a lump sum payment?

If you receive a lump sum payment, it is always best to talk to an advocate or attorney who understands SSI eligibility and the effect of a lump sum on SSI eligibility. 



1 20 C.F.R § 416.1102; P.O.M.S. SI 00810.005, available at – (Return to main document)

2 to main document)

3 P.O.M.S. SI 00820.001, available at – (Return to main document)

4 The rules for earned income are described in 20 C.F.R. § 416.1110 through 416.1112. – (Return to main document)

5 P.O.M.S. SI 00830.001, available at  htps:// – (Return to main document)

6 In-kind support and maintenance (ISM) is unearned income in the form of food or shelter, or both.  P.O.M.S. SI 00835.001, available at – (Return to main document)

7 The rules for unearned income are described at 20 C.F.R. § 416.1120 through 416.1124. – (Return to main document)

8 20 C.F.R. § 416.1103. – (Return to main document)

9 P.O.M.S. SI 00815.001, available at – (Return to main document)

10 For more information, visit – (Return to main document)

11 For more information, visit – (Return to main document)

12 For more information, visit – (Return to main document)

13 For more information, visit – (Return to main document)

14 20 C.F.R §§ 416.1207(d) and 416.1205(c). – (Return to main document)

15 P.O.M.S SI 01140.200.G.3, available at – (Return to main document)

16 See endnote 19 below about additional exempt resources relating to self-employment or a business or items used as an employee such as a second car. – (Return to main document)

17 20 C.F.R. § 416.1210 (general exclusions from resources). – (Return to main document)

18 See end note X regarding changes in the law affecting at least 20 CFR § 416.1222. – (Return to main document)

19 For rules on deeming of resources, look at 20 C.F.R. §§ 416.1202, 416.1203, and 416.1204. – (Return to main document)

20 The 1989 OBRA expanded the exclusion of property necessary for self-support by eliminating any dollar or return limitation, including a business’ cash accounts, and also excluded property used by an employee at work. Section 8104 of Pub.L. 101-239, effective May 1990, codified at 42 U.S.C. § 1382b(a)(3), and invalidating conflicting provisions in 20 C.F.R §§ 416.1220 and 416.1222. For instance, a second vehicle in the family can be excluded if used on the job including for picking up or delivering things, attending meetings in other locations. One might argue that a second vehicle should be exempt when necessary to get to and from work.  However, there is no legal authority for this. In the 28 years since enactment, SSA has yet to update the regulations. P.O.M.S. SI 0501130.500, available at, and P.O.M.S. SI 0501130.501, available at  For more information on Unearned Income exclusions, visit – (Return to main document)

21 You can also look at 20 C.F.R. §§ 416.1161 and 416.1163. – (Return to main document)

22 You can also look at 20 C.F.R. §§ 416.1161 and 416.1165. – (Return to main document)

23 For more information, visit – (Return to main document)

24 For more information, visit and – (Return to main document)

25 20 C.F.R §§ 416.202(c) and 416.420. – (Return to main document)

26 20 C.F.R § 416.420(a); P.O.M.S. SI 02005.001, available at – (Return to main document)

27 Title II benefits include retirement, survivor’s, and disability insurance. – (Return to main document)

28 20 C.F.R. § 416.1123(d); P.O.M.S. SI 00830.210, available at; see also P.O.M.S. SI 03020.040, available at; see also P.O.M.S. SI 00830.010 for exceptions, available at – (Return to main document)

29 20 C.F.R § 416.1233; see also – (Return to main document)

30 20 C.F.R § 416.1233; see also – (Return to main document)

31 20 C.F.R. § 416.1201(a)(3); 20 C.F.R. 416.1161(a)(16); P.O.M.S. SI 01320.175(B), available at – (Return to main document)

32 20 C.F.R. § 416.1161(a)(16). – (Return to main document)

33 20 C.F.R. § 416.1201(a)(3). – (Return to main document)

34 20 C.F.R. § 416.1201(a)(3); P.O.M.S. SI 01120.112(B)(1), available at – (Return to main document)

35 Payment is income to the individual providing the care or services.  If an ineligible spouse or parent receives in-home supportive services payments for services provided to anyone other than his/her eligible spouse or eligible child, the payments are included as income subject to deeming (P.O.M.S. SI 01320.175, available at – (Return to main document)

36 20 C.F.R. 416.1103(b)(1); In-home supportive services (chore, attendant, homemaker) payments are medical or social services and are not income when paid directly to an eligible individual to pay for the services (P.O.M.S. SI 00815.050).  However, the payment is income to the individual providing the care or services (P.O.M.S. SI 01320.175, available at – (Return to main document)

37 20 C.F.R. § 416.1201(a)(3). – (Return to main document)

38 20 C.F.R. § 416.1201(a)(3). – (Return to main document)

39 20 C.F.R. § 416.1121(a). – (Return to main document)

40 20 C.F.R §§ 416.1121, 416.1207(d). – (Return to main document)

41 20 C.F.R. § 416.1123(b). – (Return to main document)

42 20 C.F.R § 416.1103(d). – (Return to main document)

43 20 C.F.R § 416.1124(c)(1). – (Return to main document)

44 20 C.F.R § 416.1103(e). – (Return to main document)

45 20 C.F.R § 416.1103(f). – (Return to main document)

46 20 C.F.R §§ 416.1103(c), 416.1207(e). – (Return to main document)

47 20 C.F.R § 416.1232(a). – (Return to main document)

48 20 C.F.R. § 416.1232(b). – (Return to main document)

49 20 C.F.R § 416.1232(a). – (Return to main document)

50 20 C.F.R § 416.1232(d). – (Return to main document)

51 20 C.F.R § 416.1124(c)(5) and 20 C.F.R. § 416.1210(k). – (Return to main document)

52 20 C.F.R. § 416.1124(c)(17) and 20 C.F.R. § 416.1210(p) (payments received as compensation for expenses incurred or losses suffered as a result of a crime). – (Return to main document)

53 20 C.F.R §§ 416.1104 (SSI counted income), 416.1120 (SSI unearned income), 416.1207 (SSI resource determinations); see also P.O.M.S. SI 00810.410, Infrequent of Irregular Income Exclusion, available at – (Return to main document)

54 20 C.F.R § 416.1210. – (Return to main document)

55 P.O.M.S. SI 01120.200, available at – (Return to main document)

56 22 C.C.R. § 50489.9. – (Return to main document)

57 ACWDL No. 17-13, available at – (Return to main document)

58 ACWDL No. 17-13, available at – (Return to main document)

59 42 USC § 1396p(d)(4)(A). – (Return to main document)

60 Go here for more information: – (Return to main document)

61 See also and for more information. – (Return to main document)

62 26 U.S.C. § 529A; P.O.M.S. SI 01130.740, available at – (Return to main document)

63 P.O.M.S. SI 01130.740(C), available at – (Return to main document)

64 P.O.M.S. SI 01130.740(C)(5)(a), available at – (Return to main document)

65 P.O.M.S. SI 01130.740(C)(5)(c), available at – (Return to main document)

66 20 C.F.R § 416.714(a). – (Return to main document)