Whether a car accident settlement in Chicago affects your disability benefits in Illinois depends on the type of benefits you receive. If you are on Social Security Disability Insurance (SSDI), a settlement will generally have no impact on your monthly payments. If you receive Supplemental Security Income (SSI), however, a settlement could reduce, suspend, or even terminate your benefits entirely.Â
In either circumstance, learning about the difference between these two programs is critical before you accept any settlement offer. Continue reading for the information you should know going forward.
The Distinction Between SSDI and SSI
SSDI and SSI are both federal disability programs administered by the Social Security Administration, but they work very differently under the hood.
SSDI is funded through payroll taxes. You qualify based on the work credits you’ve accumulated over your employment history, not based on how much money you currently have. Because eligibility is tied to your work record rather than your financial situation, receiving a lump sum settlement from a car accident case will not put your SSDI benefits at risk in most circumstances.
SSI operates on different terms, in that it is a needs-based program designed for individuals with limited income and resources. The resource limit for SSI eligibility is just $2,000 for an individual. A car accident settlement that pushes your total assets above that threshold, even temporarily, could disqualify you from receiving benefits going forward.
What Happens if I Receive SSI and Accept a Settlement?
If you are currently receiving SSI, you are required to report any settlement to the Social Security Administration within 10 days of receiving it. The SSA will treat the settlement as unearned income, and depending on the amount, it could affect your benefits in one of several ways:
- Your monthly SSI payment could be reduced
- Your benefits could be temporarily suspended until your resources fall back below the limit
- Your SSI eligibility could be terminated altogether if the settlement is large enough
Since SSI is also closely linked to Medicaid eligibility in Illinois, losing your SSI could mean losing access to your healthcare coverage as well. That makes it even more important to plan ahead before accepting any offer.
How To Protect Your Benefits After a Settlement
If you depend on SSI, there are legal strategies that can help you preserve your eligibility while still accessing your settlement funds. One of the most common tools is a Special Needs Trust, which allows you to set aside settlement proceeds in a trust specifically designated for a disabled individual.Â
An ABLE account is another option that may be available depending on your situation. These accounts allow individuals with disabilities to save a limited amount of money without jeopardizing their eligibility for needs-based programs.
Working with an attorney who’s experienced with both personal injury law and the disability benefits system is essential in these cases. The wrong move could cost you far more than the settlement is worth.
Contact Meyers & Flowers for Help With Your Case
If you’re receiving disability benefits and have been injured in a car accident in Illinois, contacting a personal injury attorney before accepting a settlement is one of the smartest steps you can take. A personal injury lawyer in Chicago who is familiar with these issues can help structure your settlement in a way that protects your benefits while still maximizing your financial recovery.
Reach out to Meyers & Flowers today at (630) 576-9696 to schedule a free consultation. We can advise you on your legal rights and options at that time.