How Will a Car Accident Settlement Affect Social Security Disability Insurance (SSDI) Benefits?

Have you been injured in Florida and are concerned about how a personal injury or car accident settlement might affect your Social Security Disability Insurance (SSDI) or SSI (Social Security) benefits? The good news is, in Florida, receiving a personal injury settlement won’t jeopardize your SSDI benefits – but could impact your SSI payments. Abrahamson & Uiterwyk Personal Injury Attorneys can help you pursue the compensation you deserve for your injuries while protecting your valuable government benefits.

How Will A Car Accident Settlement Affect My SSDI Benefits

In Florida, a personal injury settlement will not impact your Social Security Disability Insurance (SSDI) benefits. SSDI is a federal program managed by the Social Security Administration (SSA), which determines eligibility based on your disability and work history, rather than your current income or resources.

Here’s a quick overview of how SSDI works:

• Eligibility: To qualify for SSDI, you need a qualifying disability and sufficient work history with Social Security taxes paid.
• Benefits: SSDI benefits are based on your average lifetime earnings and may eventually make you eligible for Medicare after 24 months of receiving benefits (unless you have ALS, in which case Medicare eligibility is immediate).

This means that pursuing a personal injury settlement will not jeopardize your SSDI benefits in Florida, allowing you to receive compensation without the worry of losing your disability benefits.

What Is The Difference Between SSDI And SSI?

While both SSDI and SSI are disability programs offered by the Social Security Administration, they differ in terms of eligibility and the benefits they provide.

SSDI: This program functions like an insurance policy based on your work history and disability. SSDI offers higher benefits and, after 24 months, you may qualify for Medicare (except in the case of ALS, which qualifies immediately).

SSI: This program is needs-based and is available to disabled, elderly, or blind individuals who have limited income and resources. SSI provides a fixed benefit and often qualifies recipients for Medicaid.

Key Facts About SSDI and SSI

• SSDI is an earned benefit. You qualify based on your work history and recent Social Security tax contributions. The more you’ve worked and paid into the system, the higher your benefit amount will be.
• SSDI works like an insurance program: you pay into the system while you’re able to work, and it provides financial support if you become disabled and unable to work.
• To qualify for SSDI, your disability must be medically determinable and expected to last at least a year or result in death. You also need to have earned a sufficient number of work credits, which depend on your age at the time of disability.
• SSDI benefits are generally higher than SSI benefits and can increase over time through cost-of-living adjustments.
• After receiving SSDI for 24 months (except for those with ALS, who qualify immediately), you will be eligible for Medicare, the federal health insurance program for people with disabilities and seniors.
• SSI is a needs-based program, targeting individuals with limited income and resources who are blind, elderly (age 65 or older), or disabled.
• SSI provides a fixed benefit amount based on the federal benefit rate, with possible increases for high-cost areas.
• Unlike SSDI, there is no work history requirement for SSI, but you must meet strict income and resource limits. Resources include cash, stocks, bonds, and even the value of a car or other personal property (excluding your primary residence). This is why a personal injury settlement can affect your eligibility for SSI.
• Qualifying for SSI often means also qualifying for Medicaid, a joint federal and state program that provides health insurance for low-income individuals and families.

How Does Getting A Lump Sum Accident Settlement Affect My Social Security Benefits?

The impact of a lump sum accident settlement on your Social Security benefits depends on the type of Social Security benefit you receive:

• Social Security Disability Insurance (SSDI): Good news! Receiving a personal injury settlement generally does not affect your SSDI benefits. SSDI is based on your work history and disability status, not your current income or resources. So, a lump sum settlement won’t cause a reduction or stop your SSDI payments.
• Supplemental Security Income (SSI): This is where things get trickier. SSI is a needs-based program for low-income individuals with disabilities or those over 65. Since a large lump sum settlement increases your resources, it could potentially:
  • Reduce your SSI benefits: The SSA might consider part of the settlement as income, leading to a decrease in your monthly SSI payment.
  • Eliminate your SSI eligibility altogether: If the settlement amount pushes your total assets above the SSI resource limit, you might no longer qualify for SSI benefits.

Here’s what to do:

Consult with our nearby car accident attorneys: If you’re receiving SSI and considering a car accident settlement, discuss strategies with your lawyer to protect your benefits. In Florida, you may be able to set up a special needs trust to manage the settlement funds without affecting your SSI eligibility.

How Can I Protect My Social Security When Receiving An Injury Settlement In Florida

Since SSDI (Social Security Disability Insurance) isn’t affected by your current income or resources, a personal injury settlement won’t directly impact your benefits. However, it’s important to understand the distinction if you also receive Supplemental Security Income (SSI).

Here are some tips to manage your settlement without affecting potential SSI benefits:

• Spend down strategically: If your settlement pushes you over the SSI resource limit, consider using some of the funds for approved expenses that reduce your countable resources. This could include paying off debt, making home modifications for accessibility, or prepaying rent or medical bills.
• Set up a special needs trust: A special needs trust is a legal tool that allows you to manage the settlement funds for your benefit without affecting your SSI eligibility. A trustee manages the trust and distributes funds for approved expenses that SSI doesn’t cover, such as education, therapy, or assistive technology. Consulting with an attorney is crucial for setting up a special needs trust correctly.

Will I Lose My Social Security If I Get An Accident Settlement In Florida?

Receiving a personal injury settlement could potentially lead to losing or having your SSI benefits reduced. Many wonder, can SSI find out about a settlement? You’re required to report any changes in income or assets, including settlements, to the SSA. Since SSI (Supplemental Security Income) is a needs-based program for low-income individuals with disabilities or those over 65, the Social Security Administration (SSA) considers both your income and resources when determining your eligibility and benefit amount.

Here’s how a settlement might impact your SSI:

• Reduced benefits: The SSA might see part of the settlement as income, leading to a decrease in your monthly SSI check.
• Loss of eligibility: If the settlement amount pushes your total assets above the SSI resource limit, you might no longer qualify for SSI benefits altogether.

Contact An Experienced Personal Injury Lawyer in Florida for Help

Don’t let concerns about your Social Security benefits prevent you from seeking the compensation you deserve. Abrahamson & Uiterwyk Personal Injury Attorneys understand the complexities of personal injury law, settlements, and their impact on Social Security programs. If you’re wondering what happens when you reject an insurance settlement offer, our experienced attorneys can help guide you through the process and ensure you don’t settle for less than you deserve. MedPay settlements may also play a role in your case, and we’ll ensure every aspect is handled to your advantage. Contact us today for a free consultation to discuss your case and explore strategies to protect your benefits. We’ll fight to get you the maximum compensation you deserve.