WILL A CAR ACCIDENT SETTLEMENT AFFECT MY SSI BENEFITS?

Are you receiving a settlement from a car accident, but you’re afraid that it could affect your SSI benefits? Since SSI benefits are need-based, any settlement that diminishes your need may result in a reduction or loss of SSI benefits. To get a better understanding, let’s look at the benefits that are paid by the Social Security Administration and what you can do to retain your SSI benefits, and why you should seek a personal injury attorney for advice.

Social Security Benefits

There are generally three types of benefits that are paid by Social Security. Depending on the benefit that you receive, it may or may not be affected by a settlement from a car accident.

Social Security

This is income paid to persons 62 years of age and older. It is based on a payroll tax that is paid during a person’s employment years. Because it is not based on need or income, a car settlement will not affect Social Security income benefits.

Social Security Disability Income (SSDI)

The Social Security Administration pays this benefit to those who have a severe permanent injury that prevents them from being employed. In most cases, the SSA does not view SSDI as earned income, so it should not be impacted by a car accident settlement.

Supplemental Security Income (SSI)

This benefit is based on need by computing household income and resources. You could lose these benefits unless some action is taken.

How is SSI Calculated?

SSI provides a monthly benefit to those children and adults who are disabled, aged, blind, and low income The program is need-based for those who have income less than $2000 per person or $3000 for a couple. An application, along with required documentation and annual reviews, are made to be sure you do not go over the limits. Earned and unearned income is included, but income tax refunds, energy assistance, and social services are not included. For a complete list, the SSA provides a document to explain covered and uncovered income and resources.

How Can You Protect Your SSI Without Forfeiting Your Settlement?

Victims of car accidents should not be made to choose between a car accident settlement and receiving Supplemental Security Income. Often if a person loses the SSI, they also lose Medicaid coverage. There are ways to protect some or all of your SSI, but it requires some diligence on your part and the experience of a Social Security lawyer.

There are two options for protecting your SSI from being terminated. The first is to spend down the settlement proceeds. This option only works in small settlements, and you must be careful not to spend it on things that the SSA does not consider resources. And you would need to spend it in the month you receive it.

A second, better option, particularly for larger settlements, is to set up a special needs trust. By placing the money in a trust, it allows you to keep the proceeds from your settlement and to continue receiving your SSI benefits. In a trust, the settlement money is managed by a trustee who pays expenses and costs for the recipient. By creating this trust, you avoid having it included as income, so it will not affect an SSI benefit. Trusts of this sort are subject to federal and state laws, and the SSA has many criteria that must be met in order to avoid counting it as income. It is important to have your attorney from The Miley Legal Group work on this as soon as possible since the trust must be in place before you receive any settlement.

What You Need to Do

In order to stay in compliance with Social Security and supplemental security income guidelines, you should begin by gathering all of your documentation about any benefits you receive. Keep track of any reimbursable expenses that will be covered as part of your settlement. Get a good understanding of what is considered income on a needs-based benefit and how the settlement can affect you. Refer to the SSA guidelines if you are uncertain. Consult with an attorney that specializes in car accident injury settlements and Social Security benefits.