If you’ve been injured in an accident or illness caused by someone else’s negligence, you may be entitled to compensation through a lawsuit settlement. But what happens if you’re also receiving Social Security benefits? Can a lawsuit settlement affect your Social Security benefits?
The answer depends on the type of Social Security benefits you’re receiving and the terms of your lawsuit settlement.
Social Security Disability Insurance (SSDI)
SSDI is a program that provides benefits to people who are unable to work due to a disability. SSDI benefits are based on your work history and earnings, not your current income or assets.
If you’re receiving SSDI benefits and you receive a lawsuit settlement, your SSDI benefits will generally not be affected, even if you receive a large settlement. However, there are a few exceptions to this rule.
For example, if your lawsuit settlement includes compensation for lost wages, that portion of the settlement may be counted as income and could reduce your SSDI benefits. Additionally, if you receive a lump-sum settlement, SSDI payments may be paused until the settlement funds are depleted.
Supplemental Security Income (SSI)
SSI is a needs-based program that provides benefits to people with disabilities and limited income and assets.
If you’re receiving SSI benefits and you receive a lawsuit settlement, your SSI benefits may be affected. This is because SSI benefits are based on your total income and assets.
If your lawsuit settlement puts your income or assets above the SSI limits, you may lose your SSI benefits. However, there are ways to protect your SSI benefits, such as setting up a special needs trust.
How to Protect Your Social Security Benefits
If you’re receiving Social Security benefits and you’re considering settling a lawsuit, it’s important to talk to an experienced attorney to discuss how the settlement could affect your benefits.
Your attorney can help you understand the law and develop a plan to protect your benefits.
Conclusion
Lawsuit settlements can be a complex matter, especially if you’re receiving Social Security benefits. If you’re considering settling a lawsuit, it’s important to talk to an experienced attorney to discuss your options and protect your rights.
Frequently Asked Questions
Q: Will receiving a lawsuit settlement affect my SSDI benefits?
A: Generally, receiving a lawsuit settlement will not affect your SSDI benefits. However, there are a few exceptions to this rule. For example, if your lawsuit settlement includes compensation for lost wages, that portion of the settlement may be counted as income and could reduce your SSDI benefits. Additionally, if you receive a lump-sum settlement, SSDI payments may be paused until the settlement funds are depleted.
Q: Will receiving a lawsuit settlement affect my SSI benefits?
A: Yes, receiving a lawsuit settlement could affect your SSI benefits. This is because SSI benefits are based on your total income and assets. If your lawsuit settlement puts your income or assets above the SSI limits, you may lose your SSI benefits. However, there are ways to protect your SSI benefits, such as setting up a special needs trust.
Q: What should I do if I’m receiving Social Security benefits and I’m considering settling a lawsuit?
A: If you’re receiving Social Security benefits and you’re considering settling a lawsuit, it’s important to talk to an experienced attorney to discuss how the settlement could affect your benefits. Your attorney can help you understand the law and develop a plan to protect your benefits.
Q: What if I’ve already settled a lawsuit and I’m now concerned about how it could affect my Social Security benefits?
A: If you’ve already settled a lawsuit and you’re now concerned about how it could affect your Social Security benefits, you should still talk to an attorney. Your attorney can help you assess the situation and develop a plan to protect your benefits.
Q: Where can I find more information about Social Security benefits and lawsuit settlements?
A: You can find more information about Social Security benefits and lawsuit settlements on the Social Security Administration’s website: https://www.ssa.gov/
References
- Social Security Administration: Lawsuit Settlements: https://www.ssa.gov/
- Nolo: Lawsuit Settlements and Social Security Benefits: https://www.fundera.com/blog/nolo-reviews
- AARP: How a Lawsuit Settlement Could Affect Your Social Security Benefits: https://www.aarp.org/