Recently on our legal forum a user asked, “I have been receiving Social Security Disability Insurance (SSDI) for three years for my severe multiple sclerosis. I was in a car accident last week, and I hurt my back. It looks like I will need back surgery. I was wondering if I end up getting some type of personal injury settlement for my back injury will it affect my SSDI benefits? I don’t want to do anything to jeopardize SSDI and my Medicare benefits.”
Overview of SSDI benefits
Social Security Disability Insurance are benefits paid to workers who have worked and earned credits, who have a condition which is expected to last for at least 12 continuous months, and who are not able to work or perform substantial gainful activity.
The good news for you is that SSDI is not a “needs based program.” In fact, the benefits you are receiving are actually insurance benefits. More specifically, these payments were premiums and insured that if you were injured and could no longer work that you would receive “insurance” payments until you were able to go back to work, you reached your full retirement age, you died, or the SSA determined you were no longer disabled.
So to answer your questions, assuming you are not working and generating an income, the Social Security Administration does not care how much money you receive from certain sources such as a personal injury settlement. They also do not care how much income your spouse generates. The SSDI benefits you are entitled to receive are strictly based on your own work record, your income, and the money you paid into the SSA disability trust fund.
Supplemental Security Income and personal injury settlements
Now you did not ask about Supplemental Security Income benefits (SSI), but they are important to address. SSI is different than SSDI. SSI is a needs based monthly wage assistance program which provides benefits to the aged, blind, and disabled who are unable to work for at least 12 continuous months.
To qualify for SSI benefits you must not only meet the requirements outlined above, but you must also have very limited income and resources. Claimants who receive income or resources while on SSI can jeopardize their SSI benefits. Benefits which could jeopardize SSI benefits include personal injury settlements.
What should you do if you get SSI and you win a personal injury claim?
So what should you do if you are getting SSI and you might receive a personal injury settlement? Talk to the SSA. There are certain legal options you may be able to take to lessen the impact the receipt of an injury settlement.
In some cases, there may be a way to structure your settlement to prevent any impact to your SSI benefits. For example, settlement money may not count if it is used to pay for medical expenses or legal fees. It also may not count towards your asset limit if you use it to repair or buy a home, to purchase certain household items, to buy business tools, or to purchase a burial space.
Understand the type of benefit you are receiving before accepting any type of settlement.
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