Can a Personal Injury Settlement Affect Your Social Security Benefits?

SSDI and personal injury settlement

Can a Personal Injury Settlement Affect Your Social Security Benefits?

Compensation from a personal injury settlement can give you peace of mind and help pay off your medical bills. But will that settlement compensation affect your Social Security Disability Insurance (SSDI)? What about Supplemental Security Income (SSI)? The team at Van Norman Law put together this guide to help you understand how a personal injury settlement can affect your SSDI and SSI benefits. 

How Will a Personal Injury Settlement Affect Your SSDI or SSI Benefits?


Social Security Disability Insurance is based on your previous income before your disability severely impacted your ability to work. In order to continue to qualify for SSDI, you must earn less than $1,350 per month ($2,260 if you are blind). However, only earned income counts toward this limit. 

Since personal injury settlement compensation is not earned income, funds you receive from the settlement will not affect your SSDI in most cases. However, it is still important to tell your lawyer about your SSDI benefits before you pursue a personal injury lawsuit, to secure the best possible outcome for your case.   


Supplemental Security Income is a needs-based program for low income individuals with disabilities, so the income limits are much more strict than with SSDI. You can only qualify for SSI as long as your resources are worth $2,000 or less ($3,000 if you are married). Unearned income like compensation from a personal injury lawsuit does count towards the income limit. 

So, depending on how much compensation you receive, it could send you over the income limit. As a result, your benefits may be reduced, or you could lose your SSI altogether after the settlement goes through. It is essential that you inform your lawyer about your SSI when making a personal injury claim, so they can help you understand how pursuing your case may affect your benefits. 

Do I Have to Report My Settlement to the Social Security Administration for SSDI or SSI?

Because your settlement most likely won’t affect your SSDI, you do not need to report the income to the Social Security Administration (SSA). However, if you are an SSI recipient, you must report the settlement within ten days of receiving the compensation. The SSA will use this change in income to determine whether or not your benefits will be adjusted or terminated. 

How to Protect Your SSI Payments After a Settlement

When someone else’s negligence is responsible for your injury, they should be held accountable, no matter what the circumstances are. Luckily, pursuing a personal injury claim doesn’t have to affect your SSI. You can protect your SSI benefits by setting up a special needs trust (SNT). 

An SNT is a type of trust that is specifically designed for people with disabilities. Once you place the funds from the settlement into the trust, they can no longer be counted as part of your income, and cannot cause you to exceed the income limit. 

Personal Injury Lawyer in Scottsdale, Arizona

If you receive SSDI or SSI benefits and were injured in an accident, an experienced personal injury lawyer can help you understand how winning the settlement will affect your benefits. The expert team at Van Norman Law fights for injured Arizona residents with disabilities to claim the compensation they deserve. Call 480-481-0616 today to schedule your free consultation. 

Images used under creative commons license – commercial use (7/28/2022). Photo by Steven HWG on Unsplash