Social Security disability benefits are utilized by millions of Americans to help make ends meet when a debilitating condition prevents them from working. Social Security disability (SSD) is available to those who have worked the required amount of quarters to qualify for benefits, and there is another program called Supplemental Security Insurance (SSI) that is means-based and is available to those who have limited income and assets but may not be eligible for SSD.
When someone who is receiving benefits through SSD or SSI suffers an injury that is caused by another person or party, the situation can start to get complicated. Those who get hurt because of someone else’s negligence are eligible for compensation and depending on the extent of the injuries and other factors, they could end up with a significant damage award.
So, how does the compensation received through a personal injury settlement or verdict affect Social Security benefits? If this situation applies to you, it is a very important question to consider as you move forward with your accident injury claim.
Will I Lose my Social Security Benefits if I Recover a Personal Injury Award?
The answer to this question depends largely on which Social Security program you are receiving benefits through. Your personal injury compensation should not impact your benefits if you are receiving them through SSD because this is not a means-based program, but there are some potential complications which we will get into more detail later. Since SSI is means-based, a significant settlement award could impact your benefits, but there are some ways to mitigate this situation, which we will also talk about in more detail later on.
How SSD May Impact a Personal Injury Claim
As we have discussed previously, technical qualification for the Social Security Disability (SSD) program is determined based on your employment history and the number of work credits you have accumulated. And since your work history is not affected by the amount of assets you have, a personal injury settlement should not directly impact your SSD benefits.
All of that said, receiving SSD benefits at the time someone suffers a personal injury could affect their claim in some other ways, such as:
- The Defendant Could Argue a Pre-Existing Condition: If you are receiving Social Security benefits because of a debilitating condition, it is almost certain that the other side will try to use this against you. If they can find any connection at all between your current condition and the injury you suffered, they will likely argue that your injuries (or at least the seriousness of your injuries) resulted from a pre-existing condition. You will need an experienced attorney to help you effectively thwart this argument.
- Little or No Damages for Lost Earnings: If you are collecting Social Security benefits, this means you are either not working or doing a very limited amount of work. That being the case, and all other factors being equal, your damage award will be lower than for someone who was working and could claim lost earnings due to their injury.
Personal Injury Claims and SSI
Qualification for Supplemental Security Insurance is determined by your income and assets, so your SSI benefits can definitely be affected by a personal injury settlement. In fact, if your settlement causes you to exceed the program’s asset limits, your benefits could end up being suspended.
Fortunately, there are some strategies that could be used to help you preserve your SSI benefits. One way would be to do what is called a “spend down”. This means spending the funds you receive on qualifying expenses until your assets go below the SSI’s allowable maximum.
For example, you could use your settlement to pay off your home mortgage, make modifications to your home to accommodate your disability, pay off student loans or other existing debt, or prepay for your burial expenses.
Maybe you would rather not spend all of your settlement money and instead save it for emergencies. In this case, you might want to consider setting up a special needs trust as a vehicle in which to hold your funds.
Special needs trusts are designed specifically for physically or mentally disabled individuals, and they can be used to house and manage your assets without losing your disability benefits. These types of trusts are complicated and need to be set up correctly, however, so be sure to work with an attorney who understands how to effectively utilize this strategy.
Contact a Reputable Florida Personal Injury, SSD and Estate Planning Firm
The question of whether an individual’s Social Security disability benefits may be jeopardized if they receive a personal injury settlement could involve two or possibly three different areas of the law. When dealing with issues like these, it is very important to hire a firm that practices all of these areas and has an in-depth understanding of how they relate to each other.
For experienced legal guidance with personal injury, Social Security disability, and estate planning needs in Florida, contact Whibbs, Stone, & Barnett. Call our office today at 1-888-219-4561 or send us a message through our online contact form. We look forward to serving you!