How Does a Lump Sum Settlement Affect SSDI?
If you have been injured and are receiving Social Security Disability Insurance (SSDI) benefits, you may be wondering how a lump sum settlement will affect your benefits. Typically, a person collecting SSDI benefits should not be impacted by an injury settlement award, even if he or she receives a large monetary award. That is because the person’s employment history, rather than his or her financial resources, determines the SSDI benefits.
In most cases, the Social Security Administration (SSA) does not consider a lump sum settlement as income. This means that your SSDI benefits will not be affected by the settlement. However, it is important to note that the SSA does consider any income that you receive from other sources, such as investments or employment, when determining your SSDI benefits.
It is also important to note that the SSA may consider any lump sum settlement that you receive as a resource. This means that if you have more than $2,000 in resources, such as cash, stocks, bonds, or other investments, your SSDI benefits may be affected. The SSA will also consider any lump sum settlement that you receive as a resource if it is used to purchase something that can be converted into cash, such as a car or a house.
If you are receiving SSDI benefits and are considering a lump sum settlement, it is important to consult with a qualified attorney or financial advisor. They can help you understand how the settlement may affect your benefits and provide you with advice on how to best manage your settlement funds.
It is also important to remember that the SSA does not consider a lump sum settlement as income for the purpose of calculating your SSDI benefits. However, if you receive a lump sum settlement and use it to purchase something that can be converted into cash, such as a car or a house, the SSA may consider the settlement as a resource.
In conclusion, a lump sum settlement should not typically affect your SSDI benefits. However, it is important to understand how the settlement may affect your benefits and to consult with a qualified attorney or financial advisor if you are considering a lump sum settlement. By doing so, you can ensure that your SSDI benefits remain unaffected and that you are able to make the most of your settlement funds. Jan 21, 2022.
