reciving a insurance settlement while...

reciving a insurance settlement while on ssi

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Cleveland, GA

#1 Feb 6, 2009
i am wanting to know what happens if you get a insurance settlement while you are getting ssi benefits my nephew was in an accident and is expecting a settlement now from the ins agency for his injuries but he is disabled and has been getting ssi way before the accident happend how does this work he knows he has to report it but then what happens will they cut his check out or give him a certain amount of time to spen it or what
Two Cents

Palo Alto, CA

#2 Feb 6, 2009
Insurance settlements are taxable, so you don't have to report an insurance payment as income on your taxes. I don't know if you have to report it to ssi or not.

United States

#3 Feb 6, 2009
there is no SSI being taken out of the settlement is there???
so then you Do Not have to report it. you only have to report it on your taxes, because it is a settlement and the money is taxable. the only one that will know ofthe settlement is the IRS
Eclectic Aquarian

United States

#4 Feb 6, 2009
It depends. If the insurance settlement is for bodily injuries, I do think that it is non-taxable. Punitive damages, property damages, etc IS taxable.

However, since the original question is in regards to the possible effect on SSI payments.....try looking around on the (think thats the right web address) website, or call, or visit the local SocSec office to find out for sure. Hopefully it is something that might only affect him for the month that he receives it. I would find out for sure from Social Security though.....advice from a forum such as topix is a risky type of advice to take verbatim.

Good luck.

Cub Run, KY

#5 Feb 6, 2009
the only thing that affects ssi is income. a settlement is not income.
Eclectic Aquarian

United States

#6 Feb 6, 2009
Resource Limits - Only limited resources are allowed for SSI eligibility.“Resources” are something that the recipient keeps from month to month and has an ownership interest in. There is a limit of $2,000 for an individual for “countable” resources. Examples of resources include bank accounts, IRA’s, savings bonds or stock, real estate and anything else that could be turned into cash, goods, or services used to support the person with special needs. Some resources that are “non-countable” against the $2,000 limit include the principal residence, a vehicle, household furnishings and supplies, a burial contract and gravesite, assets in certain trusts and property or goods necessary for work.

Income Limits - Income must also be limited in order to receive SSI benefits.“Income” is something of value that the person receives in a particular month that can be used to provide support, food, clothing, or shelter. Income does not have to be cash. It can be a Social Security insurance benefit, room and board, trust distribution, insurance settlement, annuity payment, child support or alimony, earnings, or anything else that is received of value. Some types of income are not counted at all and include many governmental needs based benefits such as Emergency Aid or General Relief, Medicaid, Food Stamps and Section 8 housing.

Your nephew may need to have that settlement put in some sort of trust account that he does not have control of.

Again, the best course of action for your nephew regarding advice on the best course of action to take is for him (or someone to do it for him) to contact the local Social Security office.

And to "showtime"....Soc Sec is part of the federal government, just like the IRS. What makes you think that the IRS would be the only one to know about it? AND....should you fail to report income to the SocSec, and they find out about it, you can really screw yourself over.

"done" - an insurance settlement is considered income for social security. The thing about a settlement that will depend upon what type of settlement (property damage or bodily injury) is whether it is taxable or not. Its still income.
Eclectic Aquarian

United States

#7 Feb 6, 2009
The nephew needs to get good, solid advice from the people that know about it. Soc Sec personnel, or maybe talk to one of those disability lawyers...of course, they probably wouldnt offer advice on this for free.

The month he gets it, it is considered income. It appears that after that first month, if he still has it as in a regular bank account or something it appears to change over to be considered a "resource" if it is over the $2000 limit.
Eclectic Aquarian

United States

#8 Feb 6, 2009
If it is a large enough settlement, it should be set up so that way it in and by itself provides the nephew with a nice income that will last for a long time (depending on the size of that settlement), if not for his lifetime.

And if that is the case, then that would be a good thing. So what if he loses the SSI? And, if you do get a big windfall like that and get disqualified for you go and blow it all quickly, I'd bet that they will not necessarily let you start drawing that monthly government check again right away.
Two Cents

Palo Alto, CA

#9 Feb 6, 2009
Actually I left out a settlements are NOT taxable. Even for punitive and property damage...think of it like this: you're just exchanging money...your property was damaged by $X dollars, so the insurance company pays you for $X dollars to equal the value of your damage. It isn't lost the value of something, and you're being made whole again, not profiting from the claim.
Eclectic Aquarian

United States

#10 Feb 6, 2009
OK, I did say I thought that there is a difference on taxability. I always thought it was...thats good, because I myself have some stuff pending with insurance co regarding an auto accident.

However, the original question that everyone is skipping over is whether or not the insurance settlement will cause problems with the nephew's SSI eligibility. Going by what is on the SSA website, it might either cause a temporary disqualification or possibly a pretty much permanent disqualification...that will probably depend on how large the settlement in question is going to be. If its only a few thousand or so, it will probably only affect him for a month or two. If its one of those "I hit the jackpot" level settlements, well if he is smart it should be set up to provide a steady income stream off the interest on it alone and should last a lifetime. That level of settlement will end the SSI....if he is also getting SS disability (which is different), that may not be affected too badly.

Again, contact the social security office.
Two Cents

Palo Alto, CA

#11 Feb 6, 2009
Yeah, I don't know about the SSI itself. Typically even a large settlement isn't counted as income and is not reported on the taxes, no 1099 is issued, etc. So SSI may not have an avenue to pursue it because there is no paper trail. But you are correct that if they start drawing interest on the principle, then that interest is taxable income and may disqualify them from SSI. I don't think they have a reach to the initial settlement though. It isn't really considered "income"...its a monetary exchange to equal a loss of equal value somewhere else. But I'm just applying what I know from the insurance side of things...I really don't know how SSI determines "income", but to count any kind of settlement toward income seems to be penalizing a claimant for having a loss in the first place.
Leslie Kenyon

Los Angeles, CA

#12 Feb 7, 2012
Depends on the State. In California, alimony, child support are not considered income and niether are personal injury settlements. SSI can get a lien on meds they paid out for the accident if a third party is liable but not if it is a hardship to the person. The award is to compensate people for injuries.
I know

Elizabethtown, KY

#13 Feb 8, 2012
Ok I know exactly how it will work. I havea neice who was getting social security & additional SSI benefits because the social security was a small amount due to her not paying in a lot.
Anyway, she got a settlement from a car accident. It was about 26,000 bucks. Now, because SSI is like welfare & it is not social security but entirely something you do not earn. The income your friend receives from this accident will in fact have an effect on his SSI.
My neice was notified by SSI that she had to pay SSI back because shed gotten the settlement. Of course shed spent it by the time she was notified. So they started taking out the money monthly from her social security check. She paid 125.00 a month for several years until it was all paid back.
Now, the thing is, my neice at the time of the insurance settlement, was no longer getting SSI because shed married & his income was too much so all she was getting was her small social security disability payment. BUT, they absolutely made her pay back the SSI shed received before getting married & before the ins. Settlement.
In her case, shed only received SSI for about one & a half years so it wasn't that large of an amount. I think she only got about 140.00 a month in SSI because she also got Sicial security benefits. And the SSI just made up the difference in what a person is allowed monthly.
But yes, she had to pay every single penny back. All of it. It's my understanding that IF it would've been a hardship for her to pay back, & she could've proved it was-then they would've considered that. But because her husband made good money, it was not a hardship. She paid it ALL back. Everything shed previously received from them. So good luck.
I know

Elizabethtown, KY

#14 Feb 8, 2012
Oh yea, I'd speak with my attorney about it if I were your friend. He must have an attorney to be getting a settlement in the first place. However, lots of attorneys are unfamiliar with SSI regulations.
Again, it he was only getting Social Security I don't think it would be a problem because that is earned from what you pay in through taxes. People who get ONLY SSI And no social security for their disability, have NOT worked or paid in to social security. And SSI is simply like welfare. And trust me when I tell you, they WILL want that money because they've been supporting your friend.
Same thing would happen if he won a huge lottery. He'd have to pay
Back SSI. Anyway, he can have a sit down with an SSI mediator to try to hold onto some of it. But he may indeed have to pay it all back into them.
I know

Elizabethtown, KY

#15 Feb 8, 2012
To Aquarian, most of your comments are regarding social security. This person says they get SSI. Big difference.
Oh and that idea someone had of spending it all quickly. Well if you can show legitimate receipts that will work for Social Security but NOT for SSI.
SSI is like welfare. Strictly like welfare. No one earns it. It is a gimme. And when a person comes into money, they want theirs back.

Indio, CA

#16 Feb 11, 2012
what if i get a W/C settlement while on ssi and sec 8? i turned it in to ssi, but do i loose my sec 8

Elizabethtown, KY

#17 Feb 11, 2012

Wayne, NJ

#18 Nov 4, 2012
@I Know
Obviously you don't.
SI is not always for those who never worked. I worked 15 years and as I was out of work(Not assisted) For to long the ssa rolled back my credits. I was elligible for SSDI in 3/08, but made the error of being hurt on 9/08. Although I won on first round, the judge could only give me SSI. I am living on what I paid in taxes on one payroll for each month. It is like private life insurance. Even if you pay $200,000 in premium's, at a certsin point of you not paying in you can lose your shirt. It is not how much or how long you have paid your taxes, it is when you last paid in under some circumstances. This is why people need to not count on getting anything you paid in back.
I am poorer for paying in all my life. I also have still not hit settlement, or my day in court. I will then have to pay back everything that I did get. It feels like I am being punished for being hurt by a third party while outof work due to the economy and made worse by living in nyc post 9/11.
When I was not working it was under 6 years of Bush's. Be careful about making broad absolute statement's about something like SSI. There is always exceptions to every rule or law. I could be your daughter. Wrong place, wrong time, out of what I payed in.

Wayne, NJ

#19 Nov 4, 2012
I would like to excuse my grammar, I rely on a voice to text converter, when I get flumoxed my grammar does not shine. I am looking for answers to how I will live when it is decided what each damaged limb is worth ( actuarial tables), and how much people have paid back as it is oh so vague.
I did not come looking to my fellow American's to be categorized( Without doing your homework). This kind of hateful posting is a glimpse of what is really deviding our nation. I hope that no one else has to ever live on $721.00 a month. No matter what their circumstances are.
A country devided is a weak one.
thank you for those who came to answer the questions asked, for those that came to use it as a bully pulpit, you are forgiven.

Hampstead, NC

#20 Dec 19, 2013
I have medicaid, and am on ssi. I had an accident and am getting a
$ 9000 settlement. Will I lose my Medicaid and SSI.

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