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.

Can I Test My Ability to Work While Receiving SSDI Benefits?

testing ability to work while receiving disability benefitsSome Social Security Disability Income (SSDI) recipients may be hesitant to return to work because they are not sure how it will affect their disability payments. The Social Security Administration (SSA) offers a trial work period, which is a period to test your ability to work and still be considered disabled.

Below, the Green Bay Social Security Disability lawyers at Sigman Janssen discuss the trial work period in greater detail and what may happen to your SSDI benefits when it ends.

Social Security Disability Trial Work Period

The trial work period is a work incentive that allows for SSDI recipients to re-enter the workforce for at least nine months. During this period, you can continue to collect your full monthly benefits regardless of how much you earn, as long as you report all work activity and remain eligible under SSA regulations.

In 2021, any month that you earn over $940 will be a month of services that will count toward your trial work period. This monthly amount is evaluated by the SSA and is adjusted on an annual basis.  

The months that count toward your trial work period month do not have to be consecutive. Any month in a rolling 60-month (five year) period could count toward your nine months.

What Happens Once the Trial Work Period Ends?

Your SSDI benefits may be affected. Once the trial work period ends after nine months, the SSA will evaluate your earnings to see if you maintained substantial gainful activity (SGA) in those months.

SGA is any earnings at or above a certain threshold. This threshold is assessed by the SSA and is adjusted on an annual basis based on inflation and cost of living changes. For 2021, the SGA threshold is $1,310 a month for non-blind SSDI recipients and $2,190 for blind SSDI recipients.

Should your average earnings meet or exceed the SGA threshold during the trial work period, your SSDI benefits will stop. However, if your average earnings stay lower than the SGA threshold, you will keep receiving your monthly benefits.

Entering an Extended Period of Eligibility

If you continue to receive your SSDI benefits and you can still work after completing the trial work period, you will go into an extended period of eligibility for 36 months.

During this period, you will continue to be eligible for disability payments as long as your monthly earnings do not meet or exceed the SGA threshold.

Otherwise, any month you earn more than the SGA threshold is a month you will not get a disability payment. After completing your extended period of eligibility, if you had even one month above the SGA threshold, the SSA will deem you no longer disabled. Your benefits will be terminated after being paid in full for that month and an additional two-month grace period.

What If My Condition Worsens and I Cannot Work Again?

You may be eligible for expedited reinstatement if it has been five years since you last received SSDI benefits. This applies if your condition worsened making you unable to work again or if your disability benefits were terminated because you started working and earning too much.

Expedited reinstatement allows you to restart your benefits without having to reapply for disability. You can receive your monthly benefits much sooner than going through the entire process all over again.

In order to qualify, you must have stopped working or working as much for the same disability you were originally receiving SSDI benefits for. The SSA in some cases may qualify a closely related disability. Your condition can also not be better than when you initially applied for SSDI. It must be the same or worse.