Impact Of A Personal Injury Settlement On SSDI And SSI Benefits



Personal injury lawsuits allow victims to seek vital monetary compensation for economic damages, such as hospital bills, lost income, and property damage, as well as non-economic damages, such as diminished quality of life, pain and suffering, and loss of consortium. Depending on the severity of the victim’s injuries, these types of cases can result in substantial settlement amounts. However, accident victims are often concerned about whether obtaining settlements will impact their disability benefits.


Will a Personal Injury Settlement Trigger the Loss of SSDI Benefits?


Fortunately, Social Security Disability Insurance benefits are usually not affected by personal injury settlements. These benefits are determined based on the claimant’s employment history. Those that have qualifying disabilities can become eligible for SSDI benefits by accruing enough work credits. An individual earns work credits throughout the course of their employment. A personal injury settlement cannot alter said credits. Therefore, personal injury compensation should not have any direct consequences on your SSDI benefits.


What Bearing do Personal Injury Settlements Have on SSI Benefits? 


Disabled individuals do not need to earn work credits to qualify for Supplemental Security Income. However, SSI is a needs-based benefit, and eligibility is contingent on the claimant’s income and assets. Thus, when a claimant receives a large settlement, it could exceed the program’s asset limitations and lead to a suspension of benefits. 


However, there are a few strategies to avoid losing SSI benefits when obtaining a settlement. The first is to spend down, which involves spending all of the excess funds from the compensation until you reach the permissible asset maximum. This strategy is generally performed within the first month that a settlement is received so that only one month of benefits are forfeited. However, a significant drawback of spending down is that most of the settlement money would be depleted and unavailable for future expenditures or emergencies. Another method for protecting your SSI benefits would be to establish a special needs trust. This type of trust is specifically designed for physically and mentally disabled individuals and overseen by a third party that manages expenditures. 


Contact an Acclaimed Best Law Firm of America Today!


Jed Dietrich, Esq., commended as an American Institute of Trial Lawyers Litigator of the Year, and his battle-tested team of lawyers will aggressively litigate to obtain the maximum compensation for your personal injury claim. The Dietrich Law Firm P.C.’s team has exhaustive knowledge and expertise in personal injury and Social Security disability cases. We can effectively guide you through any complications that might arise. Our seasoned attorneys have decades of experience helping clients maintain their SSDI and SSI eligibility even after receiving multimillion-dollar settlement awards. You can reach us 24 hours per day and 7 days per week by filling out the online consultation form or calling 716-839-3939.

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