Will My Settlement Affect My Social Security Disability?

Will My Settlement Affect My Social Security Disability?

You waited and waited and finally got approved for Social Security disability benefits, but now you’ve been injured in an accident. Hopefully, you’ll hire a personal injury attorney and get the settlement you deserve. But how will that settlement money affect your disability benefits? If you receive SSI or Medicaid, your settlement could affect your […]

settlement-affects-disability

January 30, 2017

You waited and waited and finally got approved for Social Security disability benefits, but now you’ve been injured in an accident.

Hopefully, you’ll hire a personal injury attorney and get the settlement you deserve. But how will that settlement money affect your disability benefits?

If you receive SSI or Medicaid, your settlement could affect your benefits or cause you to lose them completely. However, every case is different, and we strongly urge you to discuss your situation with your casework or an experienced Social Security disability attorney.

Here are a few questions we can answer:

Question: Will my Social Security disability benefits be reduced if I get a settlement check from a lawsuit?

Answer: No

Generally speaking, your Disability Insurance Benefits (DIB) would not be affected if you received a settlement.

However, if you are receiving Supplemental Security Income (SSI) through Social Security, your SSI would likely be decreased.

SSI is a needs-based rather than earnings-based program for which you can qualify without ever having held a job or accumulating credits, so long as you meet certain asset and income limitations. If the settlement amount pushes you over the income limit, then your SSI payments could be decreased.

Question: Do I have to report a lump sum settlement to Social Security?

Answer: Yes

SSI and Medicaid benefits are determined based on income and assets. If the settlement amount pushes you over the income limit, your SSI and Medicaid benefits could be affected. If you accept a lump sum settlement, you must report it to your Social Security caseworker within 10 days.

Question: Does a workers’ compensation settlement affect Social Security disability benefits?

Answer: Yes and No

YES: Public disability benefit payments paid under a federal, state, or local government law may affect your Social Security disability benefit.

If the combined total amount (Social Security disability payment plus your public disability payment) exceeds 80 percent of your average earnings before you became injured or ill, your Social Security disability benefit will be reduced so that the total does not exceed 80 percent of average prior earnings.

NO: Typically, disability payments from private sources, such as a private pension or insurance benefit, do not affect your Social Security disability benefits.

Question: Will my Medicaid or Medicare be affected if I get a settlement?

Answer: Yes and No

YES: Medicaid benefits, which are provided to the disabled and the needy, would probably be affected by a settlement.

Medicaid, like SSI, is based on income and family size. If the settlement amount pushes your income over the limit, your Medicaid, SNAP Food Assistance, and Subsidized Housing benefits could be affected.

Even if you choose to give away part of your settlement as a gift or a charitable donation, the government could reduce your Medicaid or even seek reimbursement for the benefits you’ve received.

NO: Medicare benefits would not be affected because those are based on work history, not income or financial resources. However, a settlement may affect your Medicare premiums, and recipients must report those earnings.

If you are disabled and receive a large personal injury settlement, you probably won’t lose your Social Security disability benefits. However, you may lose other programs you may currently rely on, such as SSI or Medicaid. Call Hensley Legal Group today for a free, no-obligation consultation and talk to an experienced Social Security disability attorney about your case.