If you were injured in an accident due to the negligence of another, you may receive recovery through a personal injury settlement. However, you may be wondering if your settlement will affect your existing public benefits. The Reiff Law Firm explains how a settlement might affect various social security benefits, and outlines potential solutions to maintain eligibility.
Personal Injury Settlement and Social Security Disability Insurance (SSDI) Benefits
Social Security Disability Insurance (SSDI) is a federal government program available to disabled people who are “insured”, meaning they have worked long enough and contributed to Social Security through taxes on their earnings. Since qualification for SSDI is based upon contribution through taxation and employment history, a personal injury settlement will not affect SSDI benefits. Regardless of the amount of the settlement, and the type of injury claim, you will still be able to receive SSDI benefits.
Personal Injury Settlement and Supplemental Security Income (SSI) Benefits in Pennsylvania
Supplemental Security Income (SSI) is a federal government program that provides financial assistance to disabled children and adults, or people age 65 and older with limited income and resources. In order to qualify for SSI, your resource limit per month cannot be over $2,000 for an individual or $3,000 for a couple. Unlike SSDI, SSI is need based, or resource based, rather than an earnings-based program. Thus, a personal injury settlement may impact your eligibility for SSI benefits. This is because your settlement will change the amount of unearned income you receive, which is one of the resources that can disqualify you from receiving benefits. If your settlement brings you above the $2,000 or $3,000 limit, then you will no longer receive benefits. If you receive SSI and you are making a personal injury claim, then it will be beneficial to seek legal counsel in order to minimize your chances of losing benefits.
Personal Injury Settlement Medicare Benefits in Pennsylvania
Medicare is a federal health insurance program for individuals 65 and older, or younger individuals with disabilities. Medicare benefits are not asset or income sensitive as eligibility is based on work history. Nonetheless, settling a personal injury claim may impact your future eligibility for Medicare, so it is important to take this into account with the assistance of personal injury lawyers trained in the litigation process.
If you are already a Medicare recipient at the time of the injury, then Medicare may have covered the medical services you received due to your injuries. You may have to reimburse Medicare for these medical expenses through your settlement agreement. If you are going to have future medical expenses related to your injury, you may need to set up a Medicare Set-Aside Arrangement (MSA) in which a portion of your settlement is set aside to cover future injury related expenses.
An MSA is appropriate when the plaintiff is already a Medicare beneficiary and when he or she will incur future care for injuries sustained that would otherwise be covered by Medicare. It is a trust that will require the evaluation of your future medical needs to determine the appropriate amount to allocated into the account. Once the government approves the amount, all of the funds are distributed into the MSA, or a “structured settlement annuity” is set up in which the funds will refill the account over time. The administrator of the trust can only use the funds to pay for medical care related to your personal injury, leaving you eligible for Medicare to cover other medical expenses unrelated to your injury.
Personal Injury Settlement Medicaid Benefits
Medicaid is government-subsidized healthcare coverage for vulnerable groups, such as people with disabilities. Like SSI, Medicaid provides coverage for individuals based on their income and assets, and is a need-based program. Thus, if you sustained an injury and recover a monetary settlement that pushes you over the income limit, you could lose your Medicaid benefits, as well as your SNAP food assistance and subsidized housing benefits.
Solutions to Preserve SSI and Medicaid Benefits in Pennsylvania
One potential solution that would allow you to maintain eligibility to SSI and Medicaid is to spend down the settlement money. This is typically a good option if you recovered a relatively small amount of money through your settlement, if you have a lot of debts to pay, or if you are looking to purchase a house or car or other high-priced item that qualifies as an exempt resource by the SSA. Spending down the money would allow you to avoid the costs associated with a special needs trust, the other viable option to maintain your benefits.
A special needs trust, or a supplementary needs trust, enables a disabled individual to utilize the income in the trust while still receiving public benefits. You can create this trust if you are a disabled individual under 65. You will have limited access to the money in the trust, but it is able to provide lifelong security for permanently disabled individuals beyond what Medicaid and SSI provide. The funds in the trust can cover anything from travel, to legal fees, to educational opportunities. There are pros and cons to each option, so it is important to consult with legal professionals in order to maximize your benefits and ensure you a better quality of life.
Call our Pennsylvania Personal Injury Lawyers Today
If you or a loved one was injured due to the negligence of another party, you deserve compensation that may result in a personal injury settlement. Unfortunately, oftentimes settlements can put your public benefits in jeopardy, a devastating result for a person who may require lifelong medical care for their injuries. The Reiff Law Firm has over 30 years of experience dealing with complicated settlements and knowledge of how to preserve benefits. Call our Philadelphia personal injury attorneys today at (215)-709-6940 to speak with a professional who will evaluate your case for free.