Will a Personal Injury Settlement Affect My Social Security Disability Benefits?

personal injury settlement and disability benefitsThe short answer is it depends. If you are receiving Social Security Disability Income (SSDI), these benefits generally will not be impacted by a personal injury settlement award, but there may be other things to consider. If you are receiving Supplemental Security Income (SSI), your settlement may cause your benefits to decrease or stop altogether. However, certain things could be done to prevent this. 

Below, Sigman Janssen further discusses this issue. SSI and SSDI are two different Social Security Disability programs. An initial consultation with one of our Oshkosh Social Security Disability lawyers is completely free of charge without any risk or obligation involved. We only get paid if we help you receive benefits. 

Personal Injury Settlements and SSDI Benefits

SSDI benefits should not be affected by an injury settlement, even if the settlement amount is high. Eligibility for this program is based on your work history, not your financial situation.

If you have a qualifying disabling condition, you may be able to receive SSDI benefits with enough work credits. These credits are earned for every quarter that you have been employed. It makes no difference if you suffered a personal injury and obtained compensation for it. Your injury settlement should not have a direct impact on your ability to receive and retain your disability benefits.

With that being said, worker’s compensation and other disability payments may affect eligibility for SSDI and the benefit amount you may be able to receive.

Personal Injury Settlements and SSI Benefits

SSI has different eligibility requirements than SSDI. SSI is a need-based program, which means that qualifying for SSI benefits is based on your income and the assets you own. An injury settlement could cause you to exceed the program’s asset limits ($2,000 for an individual and $3,000 for couples), which could result in your disability benefits being suspended.

However, certain things can be done to try to avoid losing your SSI benefits if you receive a personal injury settlement award. For instance, you could spend the excess funds quickly. If it is done within the first month you receive the lump sum and the funds are spent in an acceptable manner, you may only lose one month of benefits.

Some ways to spend the excess funds that may be acceptable under the Social Security Guidelines are as follows:

  • Pay off your mortgage or a large portion of the mortgage you still owe.
  • Make repairs to your home or modifications to accommodate your disability.
  • Pay off your student loans and other education expenses.
  • Pay off any existing credit card debt.

The biggest downside in spending the excess funds is not having anything left in case of an emergency or other future expenses. Another way to help protect your SSI benefits is placing these funds in a special needs trust. These trusts are designed for individuals with physical and mental disabling conditions and overseen by a third party. Any funds in a special needs trust cannot be counted as income, which could allow you to maintain your eligibility for disability benefits.

Get the Help You Need from an Experienced Lawyer

If you are receiving disability benefits and suffered a personal injury, you should not have to decide between keeping your benefits and obtaining the compensation you need. At Sigman Janssen, we are here to help. An initial consultation with one of our experienced lawyers will allow you to discuss your situation, ask any questions you may have and learn more about the possible options available to you.

Go to our testimonials page to see what some of our satisfied SSD clients have to say about our services.

Give us a call at (877) 888-5201 to get started.