Introduction
One question personal injury attorneys often ask us as they’re settling cases is: "Can receiving a settlement jeopardize a client's government benefits?"
Often, that line of inquiry is followed by: "Which government benefits received by my client will be impacted by obtaining a legal settlement? Which types of government benefits will not be affected?"
The simplest answer to all of these questions is: It depends on the type of government benefits that your client has. There are two general types of government benefits: needs-based government benefits and non-needs-based or entitlement government benefits.
Here's what you need to know:
Needs-Based Benefits
The most common needs-based benefits are Medicaid and Supplemental Security Income (SSI). If your client receives Medicaid or SSI and is asking, "Can SSI find out about a settlement?" your client needs to have a plan in place before receiving the settlement proceeds in order to maintain eligibility for those benefits. To put it simply, receiving a legal settlement can jeopardize a client's needs-based government benefits.
Other needs-based benefits include:
- Food stamps (SNAP)
- Section 8 Housing
- Temporary Assistance for Needy Families (TANF)
- Veteran’s Pensions Benefits (often called Aid & Attendance benefits)
- Low Income Home Energy Assistance Program (LIHEAP)
- Children’s Health Insurance Program (CHIP)
The rules for each of the needs-based benefits listed above are unique — so make sure to contact a comprehensive settlement planner to ensure eligibility for these benefits is maintained (if possible).
Entitlement Benefits
The most common non-needs-based or entitlement-based government benefits that clients may be receiving are Medicare, Social Security Disability Insurance (SSDI), and most VA benefits. VA benefits can be a little tricky, but most of the time, they’re not going to be affected by a legal settlement. (Veteran’s Pensions is the major exception to this.)
When you’re getting ready to settle a case and you’re unsure about the impact receiving a settlement will have on your client and their household members, please give us a call.
We’ll help your client and their household members come up with a plan to preserve government benefit eligibility. By doing some proactive planning, we’ll help your clients keep their benefits and find peace of mind — and we’ll make sure to protect you from failure-to-inform liability.
In Summary
A client's settlement can affect their government benefits if they are receiving needs-based benefits like Medicaid and Supplemental Security Income (SSI). These clients need a settlement plan in place prior to receiving their settlement to protect these benefits. If a client is receiving entitlement benefits like Medicare and Social Security Disability Insurance (SSDI), their benefits will most likely not be affected by receiving a settlement, as explained in our post addressing the question "Will a settlement affect my SSDI?"
To learn more, see our article discussing concerns such as
- How to protect settlement money,
- Can you own a home on SSI? and,
- What's the difference between SSI and SSDI?
At Amicus Settlement Planners, we provide expert government benefits planning to help you and your clients navigate the complexities of maintaining eligibility while managing settlements. Give us a call today.
