By Eric A. Shore, Esq. Injury and Disability Lawyer Founder, The Law Offices of Eric A. Shore
Over the past 30 years, I’ve helped tens of thousands of people obtain Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Many of those
same people later call me after they’ve been hurt in a car accident, a slip and fall, or another serious accident, because they need help with a personal injury claim.
Sooner or later, the conversation usually turns to the same question. “Eric, if I settle my injury case, am I going to lose my disability benefits?”
It’s a fair question. For someone who depends on monthly benefits to pay rent, buy groceries, and receive medical care, the thought of losing those benefits can be terrifying. I’ve sat across the table from people who had that exact look of panic, and I understand why. When you depend on a check every month just to get by, any threat to that check feels like a threat to your whole life.
The good news is that many people are worrying unnecessarily.
The biggest misconception I see is that people think “Social Security disability” is one program. It isn’t. The Social Security Administration administers both SSDI and SSI, but they are very different programs with very different financial rules. Knowing which one you receive is often the first step toward protecting your benefits.
SSDI and SSI fire Not the Same
One of the first things I explain to clients is the difference between SSDI and SSI.
Social Security Disability Insurance, commonly called SSDI, is generally based on your work history and whether your medical condition prevents you from working.
Supplemental Security Income, or SSI, is different. It is a needs based program for people with limited income and resources.
That distinction is critical.
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SSI is different. Because SSI is a needs based program, a settlement can affect your eligibility. Depending on your circumstances, settlement proceeds may be treated as income in the month you receive them and later as a countable resource if they remain available to you. That can temporarily affect your SSI benefits and, in some cases, your Medicaid eligibility as well.
Most People Don’t Know Which Benefits They Receive
One thing I’ve learned over the years is that many people honestly don’t know whether they receive SSDI or SSI. That’s understandable. Both programs are administered by the Social Security Administration, and both are available to people with disabilities. The names sound alike, the checks come from the same place, and nobody sits people down to explain the difference when their benefits first get approved.
If you’re not sure which benefits you receive, don’t guess. You may be able to find the answer by reviewing your Social Security award notice or other correspondence from Social Security. You can also contact the Social Security Administration directly or speak with an attorney who handles Social Security disability cases.
Knowing the answer before you settle your case can make a significant difference.
Planning Before the Settlement Matters
One of the most important conversations I have with clients happens before the settlement check ever arrives.
If I know a client receives SSI and we’re expecting a substantial settlement, we start planning early. Depending on the circumstances, that planning may include discussing purchases of assets that are exempt under SSI rules, or in larger cases, consulting with a trust and estates attorney to determine whether a properly established Special Needs Trust or another planning strategy may help preserve eligibility for certain means tested benefits.
Every situation is different. The important thing is to have those conversations before the settlement is finalized instead of after the money has already been deposited.
I’ve Seen What Happens When People Wait Too Long
I’ve received calls from people after their SSI benefits had already been suspended because of a personal injury settlement. Many assumed they were receiving “Social Security disability” and believed the settlement would have no effect on their benefits. No one had explained the difference between SSDI and SSI.
By the time they called me, there often wasn’t much that could be done except help them understand the rules and explain what generally needs to happen before they may qualify again. Those are difficult conversations because many people depend on SSI and Medicaid for their everyday lives. I’d rather have that conversation with someone six months before their case settles than six months after their benefits get suspended.
That’s why I believe planning is so important.
Looking Beyond the Settlement
When clients ask me how much their injury case is worth, I certainly want to help them recover the compensation they’re entitled to receive. But I also want them to keep as much of that recovery as possible while protecting the benefits they depend on.
That means looking beyond the settlement itself. We may need to consider Medicare, Medicaid, workers’ compensation, medical liens, future medical care, or whether additional planning with another professional is appropriate. For some clients, the same accident that led to a personal injury claim also affects a workers’ compensation case or long term disability benefits through their employer. Those claims do not exist in isolation. A decision made in one can quietly undermine another if nobody is watching all of them at the same time.
A settlement should solve problems, not create new ones.
The DISINJURY™ Difference
Most law firms focus on one legal problem at a time. I’ve always believed that’s too narrow.
A serious injury can affect your health, your ability to work, your disability benefits, your medical coverage, and your financial future. Those issues are often connected even though they’re governed by different areas of law. That’s the idea behind our DISINJURY™ approach: instead of looking only at the injury case, we try to understand the bigger picture, including SSDI, SSI, workers’ compensation, and long term disability, so we can identify issues before they become costly mistakes.
The Bottom Line
If you’re receiving SSDI, a personal injury settlement generally will not affect your eligibility simply because you recovered compensation for your injuries.
If you’re receiving SSI, however, planning ahead is essential. Understanding the rules before your case settles may help protect your benefits, preserve your Medicaid eligibility, and prevent unexpected problems after your settlement is paid.
If you’ve been injured and are concerned about how a personal injury settlement may affect your disability benefits, we’d be happy to answer your questions.
Call The Law Offices of Eric A. Shore at 1-800-CfiNT-WORm for a free consultation.
About Eric A. Shore
Eric A. Shore is an Injury and Disability Lawyer and the founder of The Law Offices of Eric A. Shore. Since 1UU4, he has helped tens of thousands of injured and disabled people pursue personal injury claims, Social Security Disability benefits, workers’ compensation claims, long term disability benefits, and other legal matters that affect their ability to work and support themselves. His DISINJURY™ approach recognizes that a serious injury often affects much more than a lawsuit. It can affect a person’s health, income, benefits, and future.
This article is for general informational purposes only and is not legal advice. Every case is different, and you should consult an attorney regarding your individual circumstances.
