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Can a Personal Injury Settlement Impact Social Security Disability Benefits?

lawyer going over legal documentsEach year, the Social Security Administration (SSA) sets a limit on the amount of money Social Security Disability applicants or recipients can earn and while continuing to receive benefits. This limit is known as the substantial gainful activity (SGA) limit.

While it is helpful to know the SGA limit for the year in which you are applying for benefits, it is also important to know what counts as income. For example, would the money received from a personal injury settlement affect your eligibility for benefits?

Learn more about this issue below, including how a personal injury settlement may affect Supplemental Security Income (SSI) benefits. SSI is a separate program from Social Security Disability Insurance (SSDI).

Our Harrisburg Social Security Disability lawyers offer a free consultation to discuss how we may be able to assist you.

Lawsuit Settlements and SSDI Benefits

The general rule is SSDI benefits are not affected by a personal injury settlement. Eligibility for this benefit program is not dependent on your financial circumstances. The key issues are your work history and whether you have a qualifying medical condition.

However, workers’ compensation and other public benefits may affect your eligibility for SSDI and the amount of benefits you receive.

What About SSI Benefits?

SSI is a different program from SSDI, and as such has different eligibility requirements. SSI is a needs-based program, which is why it has asset limits for applicants ($2,000 for an individual and $3,000 for couples).

If you receive a settlement from a personal injury claim, it could result in your benefits being suspended (the extra money would likely put you over the asset limit).

However, there are a couple of things you can do to try to avoid losing your benefits, or at least reduce the amount of time your benefits are suspended. For example, you could spend the extra money quickly – if you do so within the first month you receive it, you may only lose benefits for one month.

There are many ways to spend the extra money that may be beneficial to you, such as:

  • Paying off your mortgage or paying off a significant portion of the mortgage you still owe
  • Repairing your home or making modifications to accommodate your disability
  • Paying off credit card debt
  • Paying off a student loan
  • Paying for education
  • Buying a new car to accommodate your disability (one vehicle does not count against the asset limit, no matter the cost)

Another way to try to maintain benefit eligibility is to place the money in a special needs trust. These are specially designed for those with physical or mental disabilities and managed by a third party. This could be included in the settlement and possibly prevent your benefits from being interrupted for even one month.

Get Answers to Your Questions. Call Today

The licensed attorneys at Schmidt Kramer are here to answer your Social Security Disability questions. We are also prepared to help you pursue benefits, whether you have yet to apply or have already been denied.

We have extensive knowledge of Social Security Disability benefits and the many rules that govern eligibility and the amount of benefits applicants may receive. We have a proven track record of securing benefits for many disability applicants. Review our testimonials page to find out what some of our satisfied SSD clients had to say about the services we provided.

Free Consultation. No Upfront Fees. Call today: (717) 888-8888