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Does a personal injury settlement affect SSI?

does a personal injury settlement affect ssi

If you’re receiving Supplemental Security Income (SSI) due to disability, age, or limited income and assets, and you are considering a personal injury claim or have already received a settlement, it’s crucial to understand how this financial gain might impact your SSI benefits. Below, our Denver personal injury lawyers explore the relationship between personal injury settlements and SSI benefits, providing the insights needed to navigate this complex area.

Understanding the impact of a personal injury settlement on SSI benefits

Supplemental Security Income (SSI) is a program administered by the Social Security Administration (SSA) designed to help aged, blind, and disabled people who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter. Because SSI is a needs-based program, any change in your financial situation, including receiving a personal injury settlement, can affect your eligibility or benefits.

How personal injury settlements are treated by the SSA

  • Resource limits: SSI eligibility requires that an individual’s resources, or assets, do not exceed certain limits—generally $2,000 for an individual or $3,000 for a couple. If a personal injury settlement pushes your total resources above this threshold, you could lose your SSI benefits.
  • Exclusions and spend down: Certain parts of a personal injury settlement can be excluded from counting as resources. For example, funds explicitly allocated for future medical expenses may not count against the resource limit. Additionally, you can “spend down” the money received in a settlement on non-countable resources such as buying a home or paying off debts, which can help maintain your SSI eligibility.

Legal strategies to protect SSI benefits when receiving a personal injury settlement

Careful planning and specific legal structures can be utilized to avoid jeopardizing your SSI benefits.

Special Needs Trusts

  • Purpose and use: One effective strategy is to place the settlement funds into a special needs trust. This type of trust allows the beneficiary to use the trust assets for their benefit without those assets being counted as personal resources for SSI eligibility purposes.
  • Legal requirements: Setting up a special needs trust involves adhering to specific legal requirements and should be done with the help of an experienced attorney to ensure compliance with both state and federal laws.

Pooled Trusts

  • Alternative option: A pooled trust is another option for smaller settlements that may not warrant the expense of a special needs trust. These trusts pool many beneficiaries’ resources, each maintaining a separate account. Nonprofit organizations manage pooled trusts and can also help maintain SSI eligibility.

How Zara Injury Law can help

Navigating the implications of a personal injury settlement on your SSI benefits requires nuanced legal expertise. Zara Injury Law provides comprehensive guidance and representation to ensure that your settlement does not adversely affect your SSI benefits. Our team can help with:

  • Asset planning and protection: Advising how to appropriately handle the settlement to protect your SSI benefits, including establishing trusts.
  • Negotiations and settlement structure: Structuring your settlement in a way that minimizes the impact on your SSI benefits.
  • Ongoing support and advocacy: Assisting with any issues with the SSA regarding your benefits post-settlement.

Let us lighten your load by managing your claim

Receiving a personal injury settlement can significantly impact your SSI benefits if not properly managed. Understanding your options and the legal tools available to protect these benefits is crucial. With the skilled attorneys at Zara Injury Law, you can ensure that your financial and personal needs are balanced effectively, safeguarding your benefits while addressing your immediate and future needs.

If you’re navigating the complexities of a personal injury settlement as an SSI recipient, contact us for expert legal guidance tailored to your specific circumstances.