Social Security Disability and Personal Injury

A staggering 10.2 million people are on Social Security Disability, according to a recent report by the U.S. Office of Retirement and Disability Policy. The report states that musculoskeletal system and connective tissue issues such as carpal tunnel syndrome, fibromyalgia, and bone fractures are driving disabled workers and disabled widowers to receive benefits.

Starting in the late 1950s, Social Security Disability benefits were added to the Office of Retirement and Disability. SSD often aids low-income families that are at or below the poverty line. Those with SSD benefits receive free or reduced medical care, prescriptions, and other services.

If you receive a personal injury settlement your SSD benefits will not be affected. Even the wealthiest person in America, Jeff Bezos the CEO of Amazon and social media mogul Mark Zuckerberg would not lose social security disability benefits (if they become disabled and unable to perform work) with a settlement. This is because Social Security Disability impacts people who have worked and have paid into Social Security through FICA taxes.

However, if you receive Social Security (SSI) the barriers can become murky. SSI is a needs-based rather than earnings based program. To be eligible for Social Security benefits you must have under $2,000 in assets if you are single. In addition, it is important to seek a legal counsel to make sure that the terms and conditions of the settlement do not terminate existing benefits. For those that have been on Social Security for years, according to CNN, almost 56 million were on SSI in 2012, losing the extra-income may provoke anxiety.

Even with the financial help of a settlement, ongoing medical issues can be costly. According to Genworth’s 2017 Annual Cost of Care Survey, the cost of long-term care services has increased by 4.5 percent since the study began in 2004. For example, home health aide services are up by 6.17 percent or $21.50 per hour, adult day health care services are up by 2.94 percent or $70 per day, assisted living facilities are up by 3.36 percent or $3,750 per month and semi-private room nursing home care are up by 4.44 percent or $7,148 per month.

While these numbers are high for individuals facing long-term treatment — it is important to consider ways to manage settlement income. To keep Social Security benefits some lawyers recommend spending down (paying off bills, car debt, and home improvements) or investing the money in a special needs trust, which is kept by a third party who oversees the spending. This money is not considered income by the Office of Retirement and Disability, thus you will not face infractions.

Since you’re required to report settlement income to your SSI case worker within 10 days, this may impact or reduce Medicaid coverage. However, settlement income will not impact Medicare coverage because that is based on work history, not financial resources. Ultimately, if you have any questions regarding Social Security and personal injury settlement it is best to contact a lawyer to avoid the financial strain of a lack of benefits.