how will a car accident settlement affect my ssi benefits

The compensation from a car accident settlement can cause your monthly income to surpass the FBR threshold enforced by the SSA. If your settlement causes you to earn more than the monthly limit, you could lose your eligibility for SSI

benefits, or see a substantial reduction in your monthly SSI payments.

Full Answer

How does a personal car accident settlement affect Social Security benefits?

The Social Security Administration (SSI) provides benefits to people in three different ways, and a personal car accident settlement impacts each one differently. Social Security income is based on the Social Security payroll tax paid during a person’s working years.

How does an injury settlement affect my SSI benefits?

In order to qualify, countable assets must be less than $2,000 for an individual or $3,000 for a couple. Click here for a full list of what sorts of income, assets, and changes must be reported under the SSI program. Because program benefits are “need based” or “resource based”, an injury settlement will impact the SSI benefits received.

Will SSDI affect my settlement for a motorcycle accident?

For example, SSDI for COPD would not reasonably affect your settlement for back injuries suffered in a motorcycle wreck. However, the SSDI benefits you’re receiving for severe back problems very possibly could. You and your lawyer would need to demonstrate the differences between your ongoing disabling condition and the personal injury.

Why can’t I get SSDI If I’ve been injured in an accident?

This is because SSDI is contingent upon your employment history, not your current financial circumstances. The work credits you earned to become eligible for SSDI will not disappear or be erased simply because you were injured in an accident. Unfortunately, the same cannot be said of SSI benefits.

Does a lawsuit settlement count as income for SSI?

Receiving a settlement should not impact your SSDI benefits because it doesn't qualify as income, which SSA considers when deciding what you're eligible to receive. This differs from SSI (Social Security Income), where lawsuit settlements count towards the eligibility threshold.

How does a lump sum settlement affect Social Security?

Like regular workers' comp payments, the lump-sum amount is subject to an offset — a reduction of one benefit to meet the federal requirement that workers' comp and SSDI payments combined be no more than 80 percent of your typical earnings before you became disabled.

Does settlement money affect Social Security benefits?

A personal injury settlement will not affect SSDI benefits. On the other hand, one of the main eligibility requirements for Supplemental Security Income (SSI) is an asset test. In fact, assets as low as $2000 can disqualify an individual from receiving SSI benefits ($3000 if married).

Does car value affect SSI benefits?

The SSA is not concerned with the value of the vehicle. Owning one $20,000 car won't count hurt you. However, owning two cars that are valued at just over $1,000 will count against you. While that may seem odd, keep in mind that they are looking at this as if you could sell excess assets in order to pay bills, etc.

How can I protect my settlement money?

Keep Your Funds Separate You must keep your settlement monies in a segregated, separate bank account. Do not mix up any other money with your settlement monies. This is called “commingling funds” and it removes the “exemption”, or protection, for this money.

How do I hide money from SSI?

Here are some suggestions for what an individual could buy to spend down a lump sum:Buying a home or paying off a mortgage, if the SSI recipient is on the title or has a lifetime agreement to be a tenant of the home. ... Buying a car or paying off a car, if the SSI recipient is on the title.More items...•

Will I lose my SSDI if I get a settlement?

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.

Can Social Security be garnished for a lawsuit?

Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or other legal process, or from the operation of any bankruptcy or insolvency law.

Can Social Security benefits be taken in a lawsuit?

Protected Social Security benefits This protection applies even if a company sues you, you lose the case and a court enters a judgment against you. The following benefits are protected from garnishment and bank levies thanks to federal law: Social Security benefits.

What income is not counted for SSI?

WHAT OTHER RESOURCES DO NOT COUNT FOR SSI? cash received for medical or social services that we do not count as income is not a resource for 1 month; EXCEPTION: Cash reimbursements of expenses already paid for by the person are evaluted under the regular income and resources rules.

How much money can I have and still get SSI?

Supplemental Security Income (SSI) is a needs-based program. To get SSI, your countable resources must not be worth more than $2,000 for an individual or $3,000 for a couple. We call this the resource limit. Countable resources are the things you own that count toward the resource limit.

How much money does SSI allow you have in the bank?

A single person can have resources worth up to $2,000 and still get SSI. A couple can have resources worth up to $3,000. We don't count many of the things you own.

What happens if you get a car accident settlement?

The compensation from a car accident settlement can cause your monthly income to surpass the FBR threshold enforced by the SSA. If your settlement causes you to earn more than the monthly limit, you could lose your eligibility for SSI benefits, or see a substantial reduction in your monthly SSI payments. You must report any changes in your income ...

Why are people not eligible for SSI?

People who earn countable income above a certain monthly threshold, which is known as the Federal Benefit Rate (FBR), are ineligible to receive SSI benefits because they are not considered to be low-income by the SSA. The FBR typically changes from year to year to account for inflation.

What is countable income for SSI?

An SSI applicant has to meet various criteria in order to be eligible to receive benefits. One of these criteria is earning less countable monthly income than $733. Put simply, your “countable” income is whatever money is left over after you exclude: All items which aren’t income from employment.

How many people in Oklahoma receive SSI?

About 8.4% of these beneficiaries – roughly 5.5 million people – exclusively receive SSI. There are just under 100,000 SSI recipients in the state of Oklahoma, with the largest numbers of recipients residing in Oklahoma County (roughly 19,400 people) followed by Tulsa County (roughly 14,800 people). Unlike SSDI (Social Security Disability ...

Do you have to report changes to your income to the SSA?

You must report any changes in your income to the SSA. Upon reviewing your information, the SSA should send you a notice informing you that you are over the SSI income limit and that your benefits will be reduced or terminated, which will generally lead to a loss of your Medicaid coverage.

How much does SSI decrease?

According to the SSI program, the more you earn, the less SSI benefits you receive. For every extra dollar you earn, your SSI benefit decreases by 50 cents. It may not seem much, but you have to remember that under the SSI, you must report every income and every expense.

How to protect your SSI and Medicaid?

There are two things that you can do to protect your SSI and Medicaid benefits: Spend the settlement money in the same month on something that will not count as resources. It’s okay if you receive only a reasonable amount.

What is the difference between SSI and SSDI?

SSI is different from social security disability insurance (SSDI). While SSDI also provides monthly payments to those disabled, it distinctly gives them to those who previously worked or those who have parents who work.

What is a pass for self support?

If you set your money aside for a Plan to Achieve Self-Support (PASS) Create a Special Needs Trust or a Pooled Trust . As a general rule, trusts are considered as a resource because, depending on the condition, you may earn something from the trust.

Can you get SSI if you get into a car accident?

When you get into a car accident and end up getting into a personal injury settlement, this can affect your SSI and Medicaid eligibility. SSI has income and resource limits and a settlement can be an income. According to the SSI program, the more you earn, the less SSI benefits you receive.

How long does it take to report a lump sum settlement to Social Security?

If you accept a lump sum settlement, you must report it to your Social Security caseworker within 10 days.

What percentage of Social Security disability is reduced?

If the combined total amount (Social Security disability payment plus your public disability payment) exceeds 80 percent of your average earnings before you became injured or ill, your Social Security disability benefit will be reduced so that the total does not exceed 80 percent of average prior earnings. NO: Typically, disability payments ...

Can I get disability if I receive a settlement?

Answer: No. Generally speaking, your Disability Insurance Benefits (DIB) would not be affected if you received a settlement. However, if you are receiving Supplemental Security Income (SSI) through Social Security, your SSI would likely be decreased.

Can you qualify for SSI without a job?

SSI is a needs-based rather than earnings-based program for which you can qualify without ever having held a job or accumulating credits, so long as you meet certain asset and income limitations. If the settlement amount pushes you over the income limit, then your SSI payments could be decreased.

Does disability affect Social Security?

NO: Typically, disability payments from private sources, such as a private pension or insurance benefit, do not affect your Social Security disability benefits.

Can you lose your Social Security if you receive Medicaid?

If you receive SSI or Medicaid, your settlement could affect your benefits or cause you to lose them completely. However, every case is different, and we strongly urge you to discuss your situation with your casework or an experienced Social Security disability attorney. Here are a few questions we can answer:

What happens if you get unearned income on Social Security?

Unearned income is one of the resources the Social Security Administration looks at when determining eligibility for SSI benefits. If the award pushes your income over the $2,000 or $3,000 threshold, your benefits may be terminated.

What is SSI protection?

Protecting Your SSI Benefits. SSI benefits provide critical income and other income-based qualification benefits for vulnerable individuals. These individuals should not be forced to choose whether or not to accept damages resulting from a personal injury case or risk losing their SSI benefits.

What to do if you receive SSI?

Together, you and your attorney can discuss your options for protecting your SSI income if you win a settlement. Your attorney should also be able to help you set up a special needs trust to protect your settlement income.

What is the maximum amount of SSI for disabled people?

In order to qualify, countable assets must be less than $2,000 for an individual or $3,000 for a couple.

Does a need based settlement affect SSI?

Because program benefits are “need based” or “resource based”, an injury settlement will impact the SSI benefits received. Monetary settlements change the amount of unearned income a person receives.

Is SSI a personal injury case?

SSI is also separate and distinct from Social Security Income, which workers paid through the Social Security Payroll Tax when they were working. Social Security Income is not affected by a personal injury case, because it is not need based.

Does SSDI affect your income?

SSDI benefits are provided when a person have a severe, long-lasting disability that affects his/her ability to work. Since the settlement is not earned income, it should not affect your receipt of SSDI benefits.

Why do I lose my SSI benefits?

If an SSI recipient sees an influx of income due to a personal injury settlement or award, he or she may see a reduction in SSI benefits or even lose SSI eligibility altogether, because there is no longer financial hardship.

What are the factors that could lead to a reduction or termination of your SSI benefits?

Other than receiving additional income, other factors that could lead to a reduction or termination of your SSI benefits include: Recovering from your injury/disability. Being incarcerated in jail or prison. Receiving an inheritance or other valuable assets/resources. Leaving the United States for more than 30 days.

How many people were on Social Security in 2016?

2016 SSI and SSDI Statistics. According to the Social Security Administration (SSA), over 65 million Americans are Social Security beneficiaries as of March 2016. Nearly three quarters of them are seniors and retirees (about 44.5 million people), while the remaining 21 million beneficiaries are disabled, early retirees, young survivors, ...

How much of your Social Security benefits should be reduced?

However, as Social Security Handbook 504.2 explains, your benefits should only be reduced if your combined Social Security benefits and workers’ compensation benefits are greater than 80% of your average current earnings , or greater than your family’s total pre-reduction Social Security benefits – whichever number is larger.

What is the difference between a settlement and an award?

This is typically accomplished through out-of-court negotiations, though in rare instances where negotiations are unsuccessful, the injury victim may wish to file a lawsuit and go to trial. The compensation that comes from negotiating outside of court is called a settlement, while compensation resulting from a trial for a lawsuit is called an award.

Why do people collect Social Security?

Millions of Americans collect Social Security benefits due to retirement or disability. Millions of Americans also suffer accidental injuries every year. If you belong in both categories, you may have wondered how filing a lawsuit could affect your benefits.

When can you get an offset on disability?

This reduction, which is called an “offset,” can be made during any month before the month you turn either 62 or 65 years old. The offset can continue until you turn 62 or 65 years old, depending on: When your disability began. The month you began receiving benefits.

Why are PI settlements different from SSI?

The reason PI settlements affect the two SSA programs differently is that each program has very different eligibility requirements to fit different purposes. SSDI is an “earned benefit” program, while SSI is a “needs-based” program for people whose assets and income fall within a certain poverty range.

What does it mean if you are not working and you are on disability?

Therefore, any PI settlement would be less than if you were working. The settlement would not include compensation for lost wages and lost future earning capacity. This often results in a significantly lower personal injury settlement or award.

Is Supplemental Security Income tied to work history?

Supplemental Security Income is a “needs-based” welfare program and is therefore not tied to your work history. To get SSI, you must be disabled, blind, or at least 65 years old and pass an “asset test” proving you meet financial eligibility requirements. Your spouse’s income and assets can affect SSI eligibility as well.

What is resource based Social Security?

These terms mean that they are based on your current needs or resources, and such resources exceed the limits set by the social security office then your SSI benefits can be terminated.

Is SSI a low cost benefit?

SSI benefits can be critical for many recipients providing low to no cost healthcare at most hospitals in California. Recipients receive low cost healthcare, pharmaceuticals and life saving operations at little to no cost, so it is important for such benefits to remain intact.

Do I Have to Report My Settlement to SSDI?

Yes, a settlement amount must be reported to the Social Security Administration within 10 days of being received. However, a Social Security Disability payment and a personal injury settlement should not directly affect each other.

How Does a Lump Sum Settlement Affect Social Security Disability?

If your settlement is a workers' compensation settlement from public sources, this might affect your SSDI.

What Is the Average Payout for Social Security Disability?

The average SSDI payout in 2020 is roughly $1259, but this amount can typically range from $800-$2000. The amount you receive monthly is determined from an average of your earnings in the years before the disability began. This takes into account your whole employment history.

What Is the Average Payout for a Personal Injury Claim?

Some personal injury claims might settle for only a couple thousand dollars, but the average can actually fall anywhere between $3,000 and $75,000. It can be challenging to determine the value of your personal injury claim, and you should seek the guidance of a professional, typically a personal injury lawyer, to help you with the process.

Summary of Social Security Disability and a Personal Injury Settlement

On the whole, personal injury settlements are unlikely to impact your SSDI, but they can directly affect other government sources of income like SSI. Make sure to check out the official website of whatever benefits you are receiving to find out if the amount you qualify for will be impacted by assets as well as income.