If you’re receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), settling a car accident claim in Texas raises an important question:
Will it affect your benefits?
While SSDI benefits usually stay intact, SSI benefits can take a hit due to income limits.
To protect your benefits, it’s important to structure your settlement wisely. That’s where a skilled lawyer—like those at No Bull Law—can help, to make sure your settlement is handled in a way that minimizes its impact on your SSI eligibility.
Plus, with our free consultations, you can get the legal advice you need without any upfront commitment.
Here, we’ll dive deeper into how car accident and personal injury settlements impact SSI and SSDI benefits—and what steps you can take to safeguard them.
Receiving a car accident settlement can impact your SSI benefits, as it’s a need-based program aimed at helping elderly or disabled people with limited income and resources.
If your income or resources exceed the limits to qualify for the program, you will lose your SSI eligibility.
These limits are as follows in the United States:
Countable resources:
- $2,000 for an individual
- $3,000 for a couple
Note: Countable resources include cash, bank accounts, stocks, and some property, but exclude your primary residence and one vehicle.
Monthly income limits:
- $943 for an individual
- $1,415 for a couple
Since a car accident settlement counts as unearned income, it could push you over these limits, making you ineligible for the SSI benefit program.
Side note: Losing Supplemental Security Income often means losing Medicaid too, as Medicaid eligibility is tied to financial need. Without Medicaid, you may face out-of-pocket costs for hospital stays, medical treatments, and prescriptions.
Consulting with a skilled Texas car accident attorney can help you navigate these challenges and protect your benefits (more on this later).
SSDI benefits are based on your work history and are not affected by personal injury settlements.
Additionally, since it isn’t a needs-based program, settlements won’t impact monthly payments or Medicare eligibility for SSDI recipients.
However, pre-existing disabilities can influence the size of your settlement. For example, if your disability already limits your ability to work or earn substantially, your settlement may not include full compensation for lost wages or future earning capacity.
Insurance companies might also argue that your pre-existing disability contributed to your injuries, potentially lowering your payout.
A personal injury lawyer can help counter insurance companies’ attempts to blame your pre-existing condition (and reduce your payout.) This way, you can secure a fair settlement—even while receiving Social Security Disability Insurance benefits.
Do You Have to Report Your Settlement to the Social Security Administration (SSA)?
Yes, Texas law requires you to report your personal injury settlement to the SSA within 10 days if you receive SSI. It’s considered unearned income and can affect your eligibility for SSI and Medicaid.
If you fail to report, you risk penalties, overpayment demands, or a complete loss of benefits.
A personal injury lawyer can guide you through the reporting process to ensure compliance with SSA rules. They’ll help prepare the necessary documentation, accurately report your Texas car accident settlement amount, and address any questions from the Social Security Administration on your behalf.
But reporting your settlement is just one step. To safeguard your SSI benefits, you’ll need a strategy to minimize its impact.
There are several ways to protect your SSI benefits after a personal injury settlement, but Social Security’s complex rules can make them tricky to navigate.
That’s why you need a lawyer on your personal injury case. They can help you understand and implement the right strategies to keep your benefits secure:
Our lawyers at No Bull Law can help you calculate whether potential settlement proceeds offer better financial protection than sticking with your Social Security benefits.
We’ll include economic damages that SSI or SSDI doesn’t cover, like lost wages or future medical costs, in your settlement amount negotiations. We’ll also break down how settlement proceeds might interact with your current benefits so you know exactly what’s at stake.
2. Establish a Special Needs Trust (SNT)
A special needs trust can hold your settlement funds and cover non-essential expenses like therapies, transportation, or home modifications without affecting your SSI eligibility.
Our team can help you set up the trust, choose the right trustee, and ensure they manage the funds correctly to protect your benefits.
3. Set Up a Pooled Trust
A pooled trust is managed by a nonprofit organization that combines funds from multiple beneficiaries. It’s often more affordable than an SNT and is suitable for smaller settlements.
An SNT might be a better choice for larger settlement amounts, as it offers greater privacy, personalized management, and the flexibility to choose your own trustee.
4. Spend Down the Settlement
Spending down your settlement means using the money on approved expenses, like medical bills, paying off debts, or fixing up any home damage, to keep your total assets under the SSI beneficiary limit. You can also prepay for estate planning expenses like burial and funeral costs, as these are exempt under SSI rules.
Our lawyers can guide you on what counts as allowable spending, help you document it for the SSA, and make sure you don’t miss any important rules.
5. Settle with Structured Payments
Structured payments split settlement amounts into smaller installments over time, which can help you avoid exceeding SSI’s income limits.
We can negotiate a payment plan that works for you and fits SSI beneficiary rules.
6. Designate a Medicare Set-Aside Account (MSA) for Future Medical Expenses
An MSA is a way to set aside part of your Texas car accident settlement for future medical expenses, keeping you eligible for Medicaid.
We can help you set up the account and make sure you fund it properly.
7. Establish an ABLE Account
If your disability began before you were 26, you could use part of your settlement amount to fund an ABLE account, allowing you to save up to $15,000 annually without affecting SSI benefits.
These funds can cover housing, education, or healthcare expenses. Our lawyers can confirm your eligibility and help you allocate settlement funds correctly.
Hit the Brakes on SSI Mistakes — No Bull Law Has You Covered
Navigating a car accident settlement in Texas while protecting your SSI benefits can be challenging — but the right legal strategy makes all the difference.
That’s where No Bull Law comes in.
We cut through the confusion with straightforward, no-nonsense legal advice to help you keep what’s yours.
Don’t let a Texas car accident settlement cost you your benefits.
