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Will My Personal Injury Settlement Affect My Disability Benefits?

Typically, personal injury settlements do not impact Social Security Disability Insurance (SSDI) benefits. However, they can lower Supplemental Security Income’s (SSI) standard disability payments. Understanding how and why this may happen can help you protect your financial security. Enlisting the help of a trusted disability attorney from The Khaki Law Firm can ensure you are aware of any requirements and processes.

Impacts of Settlement Awards on SSDI vs. SSI Benefits

The impact on Social Security Administration (SSA) benefits after receiving a lawsuit settlement will vary depending on the program you are currently enrolled in. The SSA determines SSDI benefits based on employment history rather than financial resources. A person is eligible for benefits as long as they have a qualifying disability and have accumulated enough work credits throughout their career. Therefore, a significant monetary award generally will not impact SSDI.

SSI, on the other hand, is needs-based and determined by income and asset limitations. To maintain benefit eligibility, a person must pass an asset test—including all income and payments they receive. Compensation after a personal injury lawsuit would be considered for this calculation and could reduce your benefit amount or make you ineligible.

How Do I Protect My Disability Benefits?

Lump sum payments are most likely to disrupt SSI eligibility. A skilled lawyer can help you navigate maintaining your benefits while receiving the compensation you deserve. One method is through “spending down,” which would involve a person spending settlement funds over the SSI asset maximum on exempt purchases. These purchases could include home modifications to accommodate their disability or prepaying funeral expenses. Paying off debt such as credit cards, student loans, or a home mortgage is also generally exempt. Typically, they must “spend down” within a month of receiving their compensation.

Another method to protect benefits and assets involves transferring the money to a special needs trust. The trust can set aside funds to cover expenses not covered by SSI, such as legal services, nursing home care, or other medical therapies. The process can be complicated, so consulting with an attorney is beneficial when creating or modifying a trust.

Enlist the Help of an Attorney to Manage Settlement Awards Alongside Disability Benefits

Within ten days of receiving a lawsuit settlement, you must report it to the SSA. However, disability benefits should not deter people from seeking financial compensation for injury damages. One of the knowledgeable attorneys from our team at The Khaki Law Firm, LLC can help you navigate your options to minimize your settlement’s impact on disability benefits. Contact us today for more information.

The Khaki Law Firm
Our Firm Approach

There are many Social Security disability law firms throughout Georgia. What sets The Khaki Law Firm apart from the rest? Why should you choose us? We are honored to represent those who have worked hard most of their lives, but due to a mental or physical impairment are no longer able to maintain employment and earn an income.

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    Have you had to stop working due to a physical and/or mental disability?YesNo
    Have you seen a medical professional in the past 6 months for your disability?YesNo
    Have you been advised by your medical professional that you are unable to work and need to file for disability?YesNo
    Have you made an application for social security disability and/or had a hearing in front of an Administrative Law Judge?YesNo
    Are you currently or have you in the past received any benefits from the Social Security Administration?YesNo

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    With offices in Alpharetta, Atlanta and Marietta, we provide legal assistance to people throughout Georgia and the Southeast in all matters of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

    We are ready to help you, and offer multiple ways to reach us.