Is a Personal Injury Settlement reportable to Social Security Disability?

Asked about 2 years ago - Harrisonville, MO

My husband receives Social Security Disability and recently won a lawsuit for Personal Injury in a Product Liability Case. Is this amount reportable to Social Security and will we lose his benefits? What if we Settle?

He is only 37 and is on SSDI not SSI. We also receive SSDI benefits for our 2 children. I just want to make sure that we will not lose his income if we settle. Is there a specific wording that needs to be used or does it matter since it is not earned income? I appreciate the help. Thanks

Additional information

He is on medicare but only Part A (Hospitalization). We do not pay for Part B. He became disabled after a work accident which led to the product liability lawsuit for personal injury.

The Work Comp case has not been settled and medicare has not paid any of his medical bills. Work Comp has a lien on the lawsuit.

Attorney answers (3)

  1. David J. McCormick

    Contributor Level 20


    Lawyers agree

    Answered . As long as your husband received SSDI, the he will have no worries. SSDI is not income based, SSI is. Thus, any assets he has do not affect his benefits. Secondly, any personal injury settlement is tax free and not considered income. You will not receive any W-2’s or 1099’s.

    Good luck.

    DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being... more
  2. Lars A. Lundeen


    Contributor Level 20


    Lawyers agree

    Answered . SSDI is not income sensitive to the best of my knowledge. I assume that since this was originally a workers compensation claim, provisions have been made for a medical set aside concerning any bills which may be payable by Medicare. You should discuss the possibility of a Medicare lien claim with your attorney. Hopefully the lien claim has already been resolved with the workers compensation claim, however, it does not hurt to discuss the issue with your attorney.

    Legal Disclaimer:

    If this information has been helpful, please indicate below.

    Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.

  3. Clifford Michael Farrell

    Contributor Level 19


    Lawyers agree

    Answered . There is not obligataion to report the cash payment - it is separate from any Social Security benefits. There may be some Medicare obligations, though - either through the workers' compensation part of the claim or, depending on the language of the settlement, for the personal injury medical bill payment part of the claim for "future expenses." You personal injury attorney should be familiar with this and should have protected you as much as possible at the time of settlement.

    The exact answers to questions like this require more information than presented. The answer(s) provided should... more

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