SSDI stands for Social Security Disability Insurance. It’s a program run by the Social Security Administration (SSA) that pays people who can’t work because they have a serious disability.
You don’t get SSDI just because you’re disabled; you get it because you worked in the past and paid Social Security taxes from your paycheck. You know, every time you worked, a little bit of your money went into a big savings fund. That fund was meant to help you later if you ever got too sick or injured to work again. That’s what SSDI does: it gives you monthly payments when you can’t earn money anymore.
Right now, millions of Americans depend on SSDI to live. The average payment is around $1,160 each month. It may not sound huge, but for many people, that’s their main or only source of income.
How a Car Accident Settlement Works
When you get into a car accident and the other driver is at fault, you may be entitled to compensation, which most people call a settlement. This money can cover things like:
- Medical bills
- Lost wages
- Pain and suffering
- Car repairs
- Future medical treatment
Sometimes, you might get this as a lump sum. Other times, you get structured payments spread out over time. Either way, it’s meant to help you recover from the accident.
Now here’s where you have to pay attention: even though SSDI isn’t affected by your settlement, SSI can be. And many people receive both SSDI and SSI (Supplemental Security Income) at the same time. So if you’re one of them, you’ll need to plan carefully.
How to Keep Your Benefits Safe After a Settlement
If you’re getting SSI or both SSI and SSDI, you don’t have to lose your benefits just because you got a settlement. There are legal ways to protect them. Let’s go over the most common ones.
Setting Up a Special Needs Trust (SNT)
This is one of the smartest moves. A Special Needs Trust lets you put your settlement money into a legal account that’s managed by someone else (called a trustee).
The money stays there, but you can still use it for certain things like doctor visits, therapy, school, a wheelchair, a ramp at home, or even rides to appointments.
The cool part is that the trust keeps your SSI safe because the money inside it isn’t counted as your money. You still get to use it when you need to, but it doesn’t make your benefits go away.
Spending the Money the Right Way
If you don’t want to use a trust, you can spend down the money instead. That just means using it on things that don’t mess with SSI rules.
You can pay off hospital bills, fix stuff in your house, buy a car (you’re allowed to have one car), or get new furniture and things you really need.
The main thing is to use the money wisely and not keep too much sitting in your account. Once you spend it on approved stuff, your benefits can stay safe.
Structured Payments
When you use the structured payment system, you’ll be getting smaller payments over time, instead of one lump sum at once.
This helps because SSI checks how much you get each month. If your payments are spread out, you don’t go over your limit. Your lawyer can help you set this up with the insurance company so it’s done right.
Using a Medicare Set-Aside Account (MSA)
If you also have Medicare, you can make something called a Medicare Set-Aside Account, or MSA. That’s a special account just for medical costs that come from your accident. You can’t use it for other stuff, though. It’s only for future doctor visits or treatments you’ll need.
Because that money is saved for health care, it helps protect your benefits from being taken away. It’s a bit tricky to set up, so it’s a good idea to have your lawyer help you do it the right way.
Using an ABLE Account
If your disability started before you turned 26, you can open an ABLE account. It’s kind of like a piggy bank just for people with disabilities. You can save up to $15,000 a year in it, and SSI won’t take away your benefits.
You can spend that money on things like rent, school, or medical care. It’s a safe and smart way to save without getting in trouble with SSI rules.
Quick Recap
- SSDI is based on your work, so your settlement money doesn’t mess it up.
- SSI has money limits, so you have to be careful about how you handle your settlement.
- You can protect your SSI by using a trust, using the structured payment system, etc.
