How can a personal injury settlement affect SSD?

After an accident, a personal injury settlement provides victims with vital financial support and resources as they recover. But a legal settlement could complicate matters if you’re also receiving Social Security Disability (SSD) benefits. An experienced disability lawyer from Matt Fendon Law Group can advise you on how your personal injury compensation might impact your Social Security benefits.

Our Arizona law firm is committed to standing up for disabled individuals and fighting for the money they need to make ends meet. We’re familiar with Social Security’s red tape and how to maximize your SSD benefits after a personal injury award. With a commitment to outstanding client service and fierce legal representation, our attorneys will work for the best possible outcome for you.

Since 2008, we’ve helped clients throughout Phoenix, Prescott Valley, Tucson, and Flagstaff obtain results that matter. We even offer a free case evaluation to answer your questions and give you the personalized attention you deserve. Call or contact us today to get started.

How Does a Personal Injury Settlement Affect SSDI Benefits?

SSD recipients injured in accidents caused by someone else’s recklessness may be entitled to sue under Arizona personal injury laws. As they consider their legal options, many accident victims ask a great question: “Does a lawsuit settlement affect Social Security benefits?” The answer depends on whether you’re receiving Social Security Disability Insurance (SSDI) benefits or payments from other programs, such as Supplemental Security Income (SSI).

In most cases, a personal injury settlement won’t affect Social Security Disability Insurance (SSDI) benefits. That’s because SSDI is usually based on the time you’ve worked before the disability. An SSDI benefit isn’t based on the severity of the disability or on how much income you receive, so even a large personal injury settlement is unlikely to affect your benefits.

But if you’re an SSI recipient, the story may be different. SSI is a program that helps low-income individuals with disabilities. SSI is generally a need-based program, meaning that it’s only available to people who meet strict income limits. But if someone receiving SSI receives a substantial personal injury settlement, it could cause them to exceed the federal limits. That could lead to a reduction or a termination of SSI benefits.

Do I Have to Report My Settlement to SSDI?

Questions about SSDI and lawsuit settlements come up all the time. Generally, if you’re receiving SSDI benefits, you typically won’t need to report any personal injury settlement. Since SSDI benefits aren’t based on your current income, a settlement likely wouldn’t affect them.

But if you’re receiving SSI benefits, you need to report the settlement within 10 days of receiving it. This is because any SSI benefits you receive are based on income limits. If a personal injury settlement would put your income above the threshold, it could impact the SSI benefits you receive.

How to Avoid Having SSI Payments Reduced or Terminated

Since SSI benefits are need-based, a personal injury settlement could significantly increase your income in a given year unless you’re careful. Follow these steps to stay within SSI requirements:

• Gather documents about any income or benefits you receive. When you’re receiving SSI payments, you need a clear understanding of your income and its effect on your payments. Keep all documentation about your income in a safe place for future review.
• Understand what does and doesn’t count towards the SSI program. Some types of income count towards SSI, while others, such as tax refunds, nutrition assistance, disaster assistance, and others, do not. This can be confusing for people receiving SSI because there are so many exceptions.
• Talk with a Social Security Disability lawyer about your situation. SSD lawyers understand the Social Security system and work with clients every day to build and protect benefits. A lawyer can explain the relationship between Social Security Disability and legal settlements and suggest tools, such as trusts, to help protect your future.

Your SSI payments matter, and the time to protect your benefits is before you accept any income or settle. If you’re considering a personal injury settlement, now is the time to get the experienced legal support you deserve.

Protecting SSI Eligibility With a Special Needs Trust

People receiving SSI face serious challenges and don’t have the resources they need to cover their expenses. And while a personal injury settlement could help, the unfortunate result could be the loss of crucial SSI benefits. That can be a frightening prospect for people simply trying to stay financially afloat. Fortunately, there are ways to receive benefits from a personal injury settlement while protecting your SSI eligibility.

First, individuals could set up a special needs trust. The settlement would be placed into a trust and managed by a trustee. That trustee can pay necessary expenses and costs for the recipient. Since the trust doesn’t count as income, it typically won’t affect any SSI eligibility or benefits.

Talk to a Social Security Disability Lawyer in Arizona

At Matt Fendon Law Group, we’re proud to be a rock for injured and disabled workers in Arizona. If you anticipate a personal injury settlement and are currently receiving Social Security Disability benefits, our talented team can help you understand your options, protect your interests, and guide you toward a stable financial future. Our mission is to protect your settlement while preserving the critical Social Security benefits you rely on every day.

Learn more today with a free case evaluation. Call or reach out to us online now for yours.