This originally aired on the Catholic Faith Network’s show CFN Live: https://youtu.be/Uy9_EvlFiFo While most people…
It is so very important to understand the benefits that you are receiving prior to actually collecting the funds that you may be entitled to from a settlement.
The following is a sample of some of the benefits that you may be receiving:
- Supplemental Security Income (SSI)
- Social Security Disability Income (SSDI)
- Medicaid market place
- Medicaid home care or nursing home care
Establishing a Trust
It is important to understand which benefits you are on when negotiating a settlement, because it may be important to establish a trust PRIOR to receiving the settlement funds in an effort to maintain your benefits. However, establishing a trust is not an option for everyone. In order to protect these assets in a trust, you must be under the age of 65. If that is the case, you can either establish a pooled asset trust or a supplemental needs trust. These trusts will collect the funds from the settlement. A Trustee, not you, will be named to use these proceeds for your benefit.
SSI and Settlements
If you are collecting SSI and the settlement proceeds do not exceed $2,000 you may be able to collect those proceeds directly without jeopardizing your benefits. Once the settlement exceeds $2,000, you cannot collect the funds outright without jeopardizing your eligibility for SSI. If you collect anything more than $2,000 you can have your SSI suspended which will likely result in you using the proceeds to replace the income that you lost rather than supplementing the income you are receiving.
SSDI and Settlements
Individuals collecting SSDI can collect the proceeds directly if this is the only benefit that they are collecting. Social Security Disability income is based on your work history and the benefit is directly related to your earnings while working. With SSDI you are in essence collecting your social security benefit early because of a disability.
Medicaid and Settlements
Medicaid also has its nuances with settlements. If you are currently on Medicaid through the marketplace because you didn’t have insurance, the settlement will likely increase your premiums, but you will not lose the Medicaid coverage. Medicaid Home Care and Nursing Home care have assets limitations in 2020 of $15,750. If the settlement is going to cause you to be over that limit, you almost certainly will need a trust for the proceeds so that you may maintain your benefits. When it comes to Nursing Home Medicaid, there are nuances when the settlement is a result of nursing home neglect.
The bottom line is that you should make sure that you or your personal injury attorney should be consulting an elder law attorney prior to collecting those settlement proceeds to make sure that the settlement will not then cause additional issues for you in the future.