Can I Lose SSI if I Receive a Personal Injury Settlement in New York City?

If you receive Supplemental Security Income (SSI) in New York City, a personal injury settlement can put your benefits at risk. Many New Yorkers ask: “Will I lose SSI if I get a settlement?” The answer depends on how the settlement is structured. With proper planning, you can often preserve eligibility while still protecting your financial recovery.

How Settlements Affect Disability Benefits in New York

SSI (Supplemental Security Income)

• Needs-based program for elderly, blind, or disabled individuals with limited resources.
• In 2024, the federal resource limit is $2,000 for an individual ($3,000 for couples).
• A personal injury settlement is treated as income in the month received and an asset if retained afterward, which can suspend or terminate SSI unless funds are properly handled.

SSDI (Social Security Disability Insurance)

• Based on your work history and Social Security contributions, not financial need.
• A settlement does not reduce or eliminate SSDI payments.
• In rare cases, a very large settlement may trigger a disability review, but the money itself does not count against eligibility.
• No requirement to report a settlement to SSDI, though you must report changes in your medical condition or work activity.

Medicare

• Available after 24 months of SSDI. Not needs-based, so settlements do not affect eligibility.
• If settlement funds are intended for future medical care, a Medicare Set-Aside (MSA) account may be required.

Strategies to Protect SSI in New York City

1. Special Needs Trusts (SNTs)
   • First-Party SNT: For disabled individuals under 65, funded with their own settlement. Requires Medicaid payback at death (only relevant if you also receive Medicaid in the future).
   • Pooled Trust: Managed by nonprofits, available at any age, often lower cost.
   • Third-Party SNT: Funded by relatives, no payback requirement.

In New York, these trusts allow you to keep SSI while still accessing your settlement for supplemental needs.

2. Spend-Down on Exempt Resources
   • Settlement funds can be used for permitted expenses such as:
     • A primary residence or home accessibility improvements
     • A personal-use vehicle
     • Medical equipment or in-home care
     • Prepaid funeral or burial arrangements
   • Documentation is essential to avoid benefit disruption.
3. Structured Settlements
   • Converting a lump sum into periodic payments can provide stability.
   • Payments made directly to you may still count as income/resources, so routing them into a trust is critical.
4. Medicare Compliance
   • If you receive Medicare, ensure any portion of your settlement allocated for future medical care is properly set aside in an MSA.

Reporting Requirements in New York

• SSI: Report settlements within 10 days to the Social Security Administration. Failure to report can result in overpayments, suspension, or penalties.
• SSDI: No settlement reporting required.

Common Misconceptions

• “All settlements end benefits.” False. SSDI is unaffected. SSI can be preserved with proper planning.
• “Structured payments always protect SSI.” False. Payments made directly to you can still count. Routing them into an SNT is usually required.
• “Pain and suffering doesn’t count.” False. Most settlement categories are countable unless shielded.

Frequently Asked Questions About Personal Injury Settlements, SSI, and SSDI in NYC

1. Will I lose SSI if I get a personal injury settlement in New York?
Possibly. SSI has a strict $2,000 asset limit. A settlement can suspend or end SSI unless you use a Special Needs Trust or spend-down strategies.

2. Does a settlement affect SSDI benefits?
No. SSDI is not needs-based. Your payments will continue, though a rare review may occur if the settlement is very large.

3. Does a settlement affect Medicare?
No. But if funds are allocated for future medical care, a Medicare Set-Aside may be required.

4. What is a Special Needs Trust (SNT)?
An SNT lets you protect settlement money from being counted as an asset. In NYC, you can use a first-party trust, pooled trust, or third-party trust depending on your situation.

5. Can I just spend the money instead of creating a trust?
Yes, but only on exempt resources like a primary home, car, medical devices, accessibility improvements, or prepaid burial arrangements.

6. Does a structured settlement automatically protect my SSI?
Not always. Payments made to you directly may still count. Routing payments into a trust is usually required.

7. Do I need to report my settlement?
Yes. SSI recipients must report within 10 days. SSDI recipients do not need to report.

8. Does pain and suffering money count against SSI?
Yes. Unless allocated properly into a trust or exempt resource, it counts.

9. Why should I still pursue a personal injury claim if I’m on SSI?
Because a settlement can cover costs that SSI doesn’t – medical care, lost wages, accessibility modifications, and pain and suffering. With planning, you can keep your benefits and still receive compensation.

Why You Should Still Pursue a Claim in New York

Even if you receive government benefits, a personal injury settlement can provide compensation for:

• Medical expenses and rehabilitation
• Home and vehicle modifications
• Lost wages and future earning capacity
• Pain and suffering and emotional distress

With proper legal guidance, you can secure both financial recovery and continued eligibility for SSI.

Why Choose Greenstein & Pittari?

• Local Harlem office for convenience and trust
• No fee unless we win your case – Our Fee Guarantee
• Bilingual services available
• Hundreds of positive client reviews and testimonials
• We handle the insurance companies so you can focus on healing
• Top-Rated, Award-Winning Lawyers – Best Lawyers & Super Lawyers

Don’t Be a Victim Twice – Call 1-800-VICTIM2 (1-800-842-8462)

At Greenstein & Pittari, LLP, we specialize exclusively in personal injury law, with a proven track record of results, responsiveness, and relentless advocacy. We fight for injured clients across New York City, including Harlem, the Bronx, Brooklyn, Queens, Staten Island, Yonkers, and Nassau County.

Call us today at 1-800-VICTIM2 (1-800-842-8462) to schedule a free consultation. The call is free. The consultation is free. You don’t pay us unless we are successful.

Our Motto: Don’t Be a Victim Twice.