How Will a Personal Injury Settlement Impact my Social Security Benefits?

When a person with a disability is preparing to receive a personal injury settlement, they often wonder whether the settlement will impact their Social Security benefits. The answer to this question depends on the type of Social Security benefits you receive. Understanding how the SSA counts income and assets is key to protecting your benefits when you expect a personal injury settlement.

SSD vs. SSI: Major Differences

There is often confusion regarding the two types of Social Security income. It is important to distinguish between the two as the Administration treats them differently regarding assets and income.

Social Security Disability Income (SSD/SSDI)is available to any disabled person who has worked and contributed to the Social Security’s FICA tax fund. In some cases, the disabled person receives benefits from the contributions of their parents or their spouse. This income is considered an “entitlement benefit,” as the taxpayer is entitled to withdraw what they or their spouse contributed over the years.

Social Security Income (SSI) is a need-based federally funded program that provides income to low-income individuals who are blind, elderly, or have a disability. People can draw from the SSI system even if they have not paid it through taxes.

How Does My Settlement Affect Either of These Benefits?

The Social Security Administration applies an asset test to any income you receive while getting benefits. Individuals receiving SSDI have met the asset standard by paying into the FICA system, and their income is not affected by a personal injury settlement. Therefore, if you receive SSDI benefits, your benefits will not be reduced if you receive a settlement for your injuries.

On the other hand, SSI is treated differently by the Social Security Administration. One of the main requirements for receiving SSI is low income and having assets of less than $2,000. If you are married, you may hold assets of $3,000 jointly. If you accept a personal injury settlement that makes your assets exceed these amounts, your benefits will probably be affected, and you might be disqualified from receiving benefits.

If you have been injured in an accident and are receiving disability benefits, you will need your attorneys to protect your benefits while you recover from your injuries. According to a Pittsburgh Social Security disability lawyer, the law firm you chose to seek damages in the personal injury lawsuit could help you understand your legal options and make the best decisions. If you want to work with specialized disability lawyers, find a firm in your state that has years of experience successfully working with cases just like yours and can help you protect your assets and income.

When you choose your attorney, make sure they have worked with many other individuals in similar circumstances and help you with your case. Most likely, you will receive a free, no-obligation initial consultation, so money should not be an issue.

How to Protect Your Social Security Benefits

For people who depend on SSI benefits, the loss of this income can be devastating. In addition, after an accident, the medical bills and other expenses are likely piling up, and losing any source of income will create a hardship. Fortunately, many law firms are experienced in working with cases like these and have strategies to help disabled individuals who expect a settlement.

A special needs trust (SNT) is a special account reserved for people with a disability so that they can access the proceeds from their personal injury settlement without affecting their benefit eligibility. There is a specific set of steps to take to set up this trust, and it can be a challenge to navigate the tricky waters when it comes to preserving your SSI benefits.

In addition to the SNT, other options are available to help you preserve your SSI income. These options depend on the amount of the settlement you are requesting, but most law firms are generally aware of ways to help you avoid being disqualified for benefits.


How Will a Personal Injury Settlement Impact my Social Security Benefits?With a BA in communications and paralegal experience, Irma decided to make the best of her writing skills. She decided to turn complicated legal matters into something more palatable for the masses. Therefore, Irma became a law communicator who writes about everyday problems so everyone can understand them and take the appropriate action. She specialized in personal injury cases, as they are more common than anyone thinks, but her areas of expertise also include civil law, criminal law, insurance-related issues, and more.

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