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Will a settlement award impact Social Security disability income?

Gaithersburg, MD |

My husband is permanently disabled, we are about to receive a settlement award from a lawsuit. He was awarded damages only for pain and suffering, not for lost wages. Do we need to report this income to Social Security and will this stop or decrease his social security disability income?

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Attorney answers 4


If he is receiving SS disability, the lawsuit settlement will not affect his benefits. Only his disability and his ability to work can affect his benefits. You don't need to report unearned income to Social Security. Good luck.

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My comments are not intended to establish an attorney-client relationship, are not confidential, and are not intended to constitute legal advice. Proper legal advice can only be given by an attorney who agrees to represent you, who reviews the facts of your specific case, who does not have a conflict of interest preventing the representation, and who is licensed as an attorney in the state where the law applies.


Mr. Jarrett is correct. If your husband also receives SSI (Supplemental Security Income) as well as Disability Insurance, the SSI will be affected. Any changes in resources or income affects entitlement to SSI. The settlement will be considered "unearned" income. See the link below at the SSA website.


The starting point for answering your question are facts we do not know. First, is your husband receiving regular social security disability benefits (sometimes called DIB) or low income disability benefits, sometimes referred to by the initials SSI. If he gets SSI, then the settlement will have a direct impact on his SSI cash benefit. It will be treated as an asset in the month received and every month thereafter until spent down. If he gets SSI, you will need specific advice ...

If your husband gets DIB and the settlement is for Worker's Compensation, there is an off-set provision, the details of which depend on your state. Again, you will want to seek specific advice.

Of course, in many situations Mr. Jarett's advice is generally correct.


If it pertains to a workers compensation case yes. If its regarding a personal injury matter not likely. Best to check with an attorney in your state.

Good Luck!

Evan in FLA
866-I-SUE -YOU

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