If you are living on disability benefits (or other benefits) and you are about to settle a car accident case or get another type of personal injury settlement, you need straight answers. Here is the bottom line in plain English:

  • SSDI is not reduced or taken away because of a personal injury settlement.
  • SSI can be affected by a settlement if you do nothing, since SSI has strict income and asset caps.
  • Medicare, Medicaid, and TRICARE do not cut you off simply because you settled, but they can demand reimbursement if they paid for accident care.
  • Short-term and long-term disability through an employer is governed by the policy language, which can include offsets or reimbursements.

Let’s dive deeper into the details:

Medicare, Medicaid, and Tricare After a Settlement

If Medicare, Medicaid, or TRICARE paid for treatment related to the crash, they usually have a right of reimbursement from the settlement (often called subrogation). The government paid bills that were caused by a third party, so they are entitled to be repaid from the recovery.

Do You Lose Medicaid if You Get a Settlement?

Not automatically. Medicaid, Medicare, and TRICARE do not end coverage just because you settled. If any of them paid for crash-related care, they usually have a right of reimbursement from the settlement. We identify and resolve these claims so your net recovery is protected.

How Much Will Medicare Take From My Settlement?

This depends on what Medicare paid for your crash care and the related reimbursement claim. We verify the billing, remove unrelated charges, and resolve the claim as part of the settlement process. The focus is on protecting your net recovery while meeting legal obligations.

How Much Will Medicaid Take From My Settlement?

This also depends on what Medicaid paid that is tied to the accident. We obtain the ledger, challenge non-accident entries, and resolve the lien. The goal is the same. Satisfy the program’s claim and maximize what you keep.

Will I Lose My SSDI if I Get a Settlement?

A personal injury settlement does not impact SSDI. Social Security Disability Insurance (SSDI) is based on your work history and disability status, not financial need. A settlement does not reduce or terminate SSDI.

A simple story shows why. Imagine you already receive SSDI for a left hip injury. You are then hit in a crash and suffer a serious right hip injury. Your settlement for the crash does not take away the SSDI tied to your left hip. If the new injury meets the disability standard, you may have another SSDI claim, but the settlement itself does not cut existing SSDI.

Can SSI Find Out About a Settlement?

Yes. You provide your Social Security number to receive settlement funds, and defense insurers require paperwork that ties the payment to the correct person. Expect the agencies to know. Do not try to hide anything. Your legal team should handle the required notices as part of the settlement process.

SSI and lawsuit settlements: How can I protect my settlement money from SSI?

Supplemental Security Income (SSI) is different than SSDI. SSI is means-tested. There are resource and income caps. A lump sum that lands in your bank account can push you over income or resource limits and put SSI at risk. That does not mean you must choose between fair compensation and your monthly SSI check. At Kalka Law Group, we protect SSI by how we structure and route the funds.

Attorneys use settlement handling tools that keep the money from counting as income or countable resources for SSI. The right choice depends on timing, medical needs, and the size of the settlement.

Spend Down Trust Versus Special Needs Trust

  • Spend down trust: The settlement money does not go into your bank account. A third-party trustee spends funds quickly and correctly on approved items for you so that the money does not count as income over SSI caps. While this is very technical, good injury law firms work with specialized trust companies to set this up.
  • Special needs trust: Designed for a person who will have ongoing needs. It holds funds long-term and supplements, rather than replaces, public benefits. Used correctly, it helps preserve eligibility for needs-based programs.

Using a Structured Settlement to Avoid Income Spikes

A structured settlement pays in installments through an annuity. Payments grow tax-free for personal injury cases. These are guaranteed payouts from established life insurers. Because payments are timed, a structure helps manage SSI limits and prevents a one-time income surge.

The right approach is case-specific. Your lawyer should coordinate with a trust company and your benefits team before you sign any release.

Practical Steps to Protect SSI Before Money is Paid

  1. Decide on the right tool. For example, a spend down trust, special needs trust, structured annuity, or a combination.
  2. Keep funds out of your personal account if that would harm eligibility. Send the settlement to the trust or annuity at funding.
  3. Plan purchases through the trustee so the spending does not show up as countable income.
  4. Coordinate medical care. We can connect clients with doctors who treat outside SSI, then are reimbursed from the settlement, which keeps care moving while we protect eligibility.

Do I have to report my settlement to SSDI?

Expect the system to become aware of the payment through standard settlement identification. We handle the required notifications as part of our process.

Short-term and Long-term Disability Through an Employer

These benefits are contract-driven. Policies often include offsets or reimbursement if you recover money for the same period of disability. We review the policy language early, explain any offsets, and negotiate within the contract rules. Bring the policy to us at the start.

Minors in Georgia: Settlements Over $25,000

For minors under 18 in Georgia, settlements above $25,000 are typically placed into a structure until age 18. The funds belong to the child, not the parent, and the structure protects the money.

What the Best Georgia Personal Injury Law Firms Do Before You Sign a Release

  • Ask and document your current benefits. SSI, SSDI, Medicaid, Medicare, TRICARE, short-term disability, and long-term disability.
  • Get the actual policy for any employer disability plan and flag offsets.
  • Identify every reimbursement claim. Medicaid, Medicare, TRICARE, and private health plans all may have rights.
  • Choose the right SSI protection tool and set it up in advance.
  • Route funds correctly at funding so they do not jeopardize eligibility.
  • Coordinate medical providers who can treat outside SSI when needed, then be reimbursed from the settlement.

Key Takeaways

In short: SSDI is safe. SSI requires planning. Health programs seek reimbursement, not cancellation. Employer disability offsets are policy-specific. With the right structure in place before funding, you can settle your case and protect the benefits you rely on.

  • SSDI: a car accident settlement does not affect SSDI.
  • SSI: can be affected by a lump sum, but you can protect eligibility with a spend-down trust, a special needs trust, and careful structuring.
  • Government health programs: coverage is not canceled just because you settled, but expect reimbursement claims for accident-related care.
  • Employer disability plans: read the policy. Offsets and paybacks are contractual.
  • Planning: make a benefits plan with your lawyer before you sign the release, not after

Note: This article is not legal advice. Consult a lawyer.