Will My Personal Injury Settlement Affect My Disability Benefits?

In the majority of cases, a personal injury settlement should not affect an individual’s disability benefits. This is not a hard and fast rule, however, as there are a couple types of disability benefits that could be affected by a personal injury settlement.

Supplemental Security Income (SSI) Benefits

SSI is a needs based program, meaning the income you receive and the status of your finances play a role in determining your benefits. As such, receiving a large personal injury settlement could be construed as income and financial resources. In such a scenario, an individual receiving SSI benefits could have their benefits reduced if they received a substantial settlement.

For anyone who has received a personal injury settlement while also receiving SSI benefits, it is important to talk to a skilled Tampa FL lawyer. The attorney will be able to help you maximize your SSI benefits, even after you received a settlement from your personal injury case.

Disability Insurance Benefits

Disability insurance benefits (DIB) may also be impacted by a personal injury settlement. However, DIB benefits are affected differently than SSI benefits.

Whereas SSI benefits can be affected if the individual receives a lot of money in a settlement, DIB is affected based on the type of case that was settled. Namely, DIB can be affected if the injury settlement was part of a workers’ compensation case. The Social Security Act requires a DIB recipient to report a workers’ compensation settlement to the Social Security Administration.

The recipient is required to do so based on the Act’s “Offset Requirement”, which offsets the individual’s monthly DIB benefits in an amount that approximates their workers’ compensation receipts.

Simply put, recipients of DIB who do not report a workers’ compensation settlement to the Social Security Administration risk having to repay any DIB benefits that should not have been paid to them based on the Offset Requirement. Additionally, these recipients could also have their DIB reduced.

The Majority of Personal Injury Settlements Do Not Affect Someone’s Disability Benefits

While it is always helpful to point out the exceptions to a general principle, most people who receive both a personal injury settlement and disability benefits will not have their disability benefits affected. Social Security Disability Insurance is based on your disability that prevents you from obtaining long-term, gainful employment.

A personal injury settlement does not change these facts in any way. In short, it is highly unlikely that your disability benefits could be affected by an injury settlement, even if the settlement was quite large.

Thanks to our friends and contributors from The McKinney Law Group for their insight into the effects of a personal injury settlement on disabilities.