Effective August 1991, death benefits, including gifts and inheritances, that are not income under SI 00830.545, also are not a resource for one calendar month following the month of receipt. If retained until the first moment of the second calendar month following receipt, death benefits are resources.

Death benefits that are repayment of bills for last illness and burial expenses the individual has already paid are subject to resources rules beginning with the first moment of the month following the month of receipt.

Do not develop unless the amount retained plus other countable resources exceeds the applicable resources limit.

If an individual would have excess resources, determine and document whether death benefits:

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  were income under SI 00830.545; and

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  if not income, whether the amounts were for repayment of bills already paid.

If you determine that death benefits should not be counted for one calendar month, document the amounts and the month.

As a result of their relative's death, Barbara Smith, a disabled SSI recipient, receives $4,000 in July as beneficiary of the relative's life insurance policy. Smith intends to spend the entire amount on the relative's last illness and burial expenses. Smith has already received bills totaling $900 which Smith pays. On August 1, Smith receives a funeral bill for $2,900 and a few days later receives a cash gift of $500 to be used for last illness and burial expenses. Smith pays the $2,900 funeral bill in August and intends to use the remainder to pay some hospital expenses.

Neither the $4,000 Smith receives in July nor the $500 Smith receives in August is unearned income. Since Smith uses $900 of the $4,000 life insurance check in July, as of August 1, Smith has a $3,100 balance which is not a resource for August. During August Smith pays the $2,900 bill and then has $200 left. However, the $500 Smith receives in August gives Smith $700 to use for hospital expenses. Smith must spend $200 in August for burial or last illness expenses, otherwise the $200 will count as a resource September 1. Smith has until the end of September to spend the remaining $500, otherwise it will be a resource October 1.

Ruth Taylor, a 68-year-old SSI recipient, has total countable resources of $1,980 consisting of a $1,000 savings account and $980 checking account. Taylor's sibling died in late October. In November Taylor receives $3,000 as beneficiary of their sibling's life insurance policy. Taylor has last illness and burial expenses of $2,750 to pay. There will be no more bills after these.

Of the $3,000 Taylor received, $250 is unearned income in November because last illness and burial expenses are only $2,750. The $2,750 is not unearned income and will not be a resource until January 1 if Taylor still has it then. The $250 amount will be a resource on December 1 and, when added to the money Taylor has in their checking and savings accounts, will cause Taylor to be ineligible if the total is more than $2,000.