Will A Personal Injury Settlement Affect My Social Security Disability Benefits?

When a United States citizen becomes disabled, he or she might become a recipient of social security disability benefits (SSDI). These are only applicable when the potential recipient has worked long enough to receive those benefits — they usually aren’t available to just anyone. For example, an undocumented worker wouldn’t be able to apply and receive SSDI (we hear a collective sigh of relief from our more conservative readers).

That said, anyone in “need” can apply for and receive Supplemental Security Income (SSI) without paying into the pool.

We receive a number of inquiries from SSDI recipients who have been injured by another party wondering if a personal injury lawsuit and settlement would affect their benefits. We receive a number of inquiries from people who are still waiting on SSDI after turning in an application. In these latter cases, the people seeking compensation via civil litigation usually only applied for SSDI because of the injury that led to said litigation.

In either case, SSDI benefits will not be impacted by any damages repaid through civil litigation. Anything you win through a settlement or in a courtroom verdict is generally yours to keep, minus the portion your lawyer sucks away. The same is true if you’re a Medicare recipient. SSDI also remains unaffected by other insurance benefits, excluding workers comp.

However, if you’re an SSI recipient, a personal injury settlement would likely mean your eligibility status would be revoked — so it’s important for you to know the difference before mounting a big lawsuit.

A social security law firm can help facilitate collaboration between different law practices when necessary. This is especially necessary when you seek SSDI at the same time as another lawyer is helping you build a personal injury case against a negligent party. And if you’re not 100 percent sure whether you’re on SSI or SSDI, then you should speak to your social security law attorney about the difference — because your personal injury attorney would benefit from a civil settlement, and there’s no reason to suggest a potential conflict of interest when you don’t have to.

There are ways of “protecting” SSI benefits if you still wish to mount a personal injury case. One way to do this is to create a special needs trust (SNT) for any personal injury settlement damages. If you win the case, into the SNT they go. You would still be able to access the funds, just in a different way. Again, the best way to consider this course of action is to speak with your attorney first.

Unfortunately, if you still work but collect SSDI and are injured (again) at work, then your workers comp might be impacted by the SSDI you already collect. There are exclusions based on certain expenses — including legal fees — that you can use to offset the difference. Speak to your attorney!

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