Will a Car Accident Settlement Affect My SSI Benefits?

Supplemental Security Income, commonly called SSI, provides critical financial support for thousands of Oklahomans and millions of Americans throughout the U.S.  A car accident settlement can impact your monthly SSI payments. Still, with help from an experienced attorney, it may be possible to avoid losing your benefits.

Social Security Administration SSI Statistics for Oklahoma

According to the Social Security Administration (SSA), approximately 65.5 million Americans were Social Security beneficiaries as of March 2016.  About 8.4% of these beneficiaries – roughly 5.5 million people – exclusively receive SSI.  Oklahoma has just under 100,000 SSI recipients, with the largest recipients residing in Oklahoma County (roughly 19,400 people), followed by Tulsa County (roughly 14,800 people). Unlike SSDI (Social Security Disability Insurance), eligibility depends on the applicant’s employment history and the number of “work credits” they have earned. SSI is intended for low-income individuals diagnosed with severe, long-term disabilities that prevent them from working full-time.  People who earn countable income above a certain monthly threshold, known as the Federal Benefit Rate (FBR), are ineligible to receive SSI benefits because they are not considered low-income by the SSA. The FBR typically changes from year to year to account for inflation.  However, the 2016 FBR remains unchanged from the 2015 FBR of $733 per month for single individuals and $1,100 for married couples.  The FBR represents the monthly earnings limit on countable income and the maximum monthly payment an SSI recipient can receive.

Can accepting a settlement offer for a car accident injury impact my eligibility for SSI benefits?

Even accepting a “low” settlement offer for a car accident injury could potentially affect your eligibility for SSI benefits. The amount you receive from the settlement might be considered as income or an asset, which could impact your SSI eligibility and benefits. It is advisable to consult with an attorney or a financial advisor before making any decisions.

How a Personal Injury Settlement Impacts Supplemental Security Income

An SSI applicant must meet various criteria to be eligible for benefits.  One of these criteria is earning less countable monthly income than $733. Your “countable” income is whatever money is left over after you exclude:

1. All items which aren’t income from employment
2. The SSA’s numerous income exclusions for the SSI program, which include:
   • HUD-related rent subsidies (Section 8 housing)
   • Supplemental Nutrition Assistance Program (SNAP)/food stamps
   • The first $20 each month

The applicant’s “resources” are also considered toward the income limit, including:

• Homes
• Cars used for regular transportation
• Household items and personal items
• Burial plots
• Life insurance policies with a maximum face value of $1,500 per person

An SSI recipient’s combined resources must not exceed a value of:

• $2,000 for single individuals
• $3,000 for married couples

The compensation from a car accident settlement can cause your monthly income to surpass the FBR threshold enforced by the SSA.  If your settlement causes you to earn more than the monthly limit, you could lose your eligibility for SSI benefits or see a substantial reduction in your monthly SSI payments. You must report any changes in your income to the SSA.  Upon reviewing your information, the SSA should send you a notice informing you that you are over the SSI income limit and that your benefits will be reduced or terminated, generally leading to a loss of your Medicaid coverage.  However, you may be able to avoid this situation by setting up a Special Needs Trust, which will allow you to remain eligible for SSI benefits and Medicaid coverage.  Creating a Special Needs Trust is complex, so you should consult an experienced attorney for help getting started.