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Will receiving a car accident settlement for personal injury effect my Medicaid and Food Assistance?

Traverse City, MI |

I received an insurance settlement and put it in a trust account/life insurance policy. I do not want to lie to DHS, but I also do not want them to cut all benefits expecting me to live off the money, I put it in the trust/life insurance in order to benefit my family in the future so we can eventually not have to receive assistance. I am currently a college student.

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Attorney answers 4


The time to have contemplated the effects of the settlement on your Medicaid and food stamps was before receipt of the settlement, not after. You have an obligation to timely report the receipt of the settlement funds and their disposition to both the food stamp and Medicaid office. Failure to report could result in criminal penalties. Make the report.

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.


Medicaid's interests must be protected. If you are receiving SSI/Medicaid, your trust should have been designed with their interests in mind - if not, you may risk losing your benefits in the future (speak to the attorney that set up the trust for you). I am assuming that you have already paid any medicaid lien that may be attributable to your accident (also very important).


You need advice from an attorney who specializes in special needs trusts and will know the ramifications of your settlement and how to deal with your change in financial status. You can find one in your area on


Proceed very careful and with the advice of an attorney. There can be severe sanctions for defrauding Medicare.

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