If these were funded through your work history, a personal injury settlement should not affect your benefits. However, when the financial assistance is need-based, a financial windfall could adversely impact your benefits. If you receive a large personal injury award or insurance settlement, your Food Stamps could be suspended or terminated.
Will a personal injury or workers’ compensation settlement impact my Medicaid benefits?
If your government benefits are not dependent on your income and are based on your work history/taxes you paid (for example, SSD), a personal injury or worker’s compensation award will not impact your benefits regardless of its amount. Let’s take a look at how a settlement or personal injury award can impact a Medicaid recipient.
Will a settlement affect my government benefits?
Generally speaking, if your benefits depend on your income and/or recourses, a settlement award will reduce or eliminate the amount of your government benefits unless you either set up a Trust with the help of a qualified attorney or engage in a “spend-down,” likewise with the help of a knowledgeable lawyer.
Will my settlement affect my eligibility for Medicaid?
While financial compensation can help promote your recovery, it can also affect your eligibility for Medicaid benefits. Therefore, it is important to learn the impact of your settlement on your benefits and how you can protect yourself in such situations.
Does the IRS count a personal injury settlement for tax purposes?
So, even though the IRS doesn’t count a personal injury settlement for tax purposes, Medicaid most certainly does when they are evaluating eligibility. Does the Personal Injury Client Still Want their Medicaid? The answer may very well be “no.”
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How Can You Protect Your Medicaid Benefits?
If you expect a small to moderate settlement amount, you can decide to spend down your proceeds. How you do this will depend on your state laws. Some states require that you spend down the settlement the same month as you receive it. You will also need to purchase items that are not considered countable assets.
What can a skilled attorney do for you?
A skilled attorney can help you make the best of your situation. He/she can get you the compensation you deserve for your injuries while protecting your Medicaid benefits.
Is Medicaid a poverty line?
Unlike Medicare, Medicaid beneficiaries are subject to strict eligibility requirements. Your income and assets should be below the federal poverty line to receive benefits. People who receive SSI, however, are exempt from these income requirements.
Does a personal injury settlement affect Medicaid?
Does a personal injury settlement affect Medicaid? Yes. In fact, a good number of accident victims are forced to choose between their personal injury settlement and Medicaid benefits. However, you can skip this choice if you plan ahead and consult with an expert Hudson County Personal Injury Attorney.
Does financial compensation affect Medicaid?
While financial compensation can help promote your recovery, it can also affect your eligibility for Medicaid benefits. Therefore, it is important to learn the impact of your settlement on your benefits and how you can protect yourself in such situations.
Is a personal injury settlement countable?
Personal Injury Settlements and Medicaid Eligibility. A personal injury settlement is considered a countable asset. This means that receiving one can affect your eligibility for Medicaid benefits. Generally, small to medium settlement amounts have little or no effect on Medicaid.
How to spend Medicaid money?
This typically makes the most sense for small personal injury settlements. They are free to buy clothing, pay off credit card debts or other loans, buying a big-screen TV, going out to a nice dinner, travel expenses, making repairs to the home or car, and more. As long as they can spend the amount (over $2,000) in the same calendar month in which it is received, they can report same to DCF/SSA and retain their Medicaid benefits.
Why must a client inform DCF and SSA?
The reason why your client must still inform DCF and SSA because if they fail to report the new asset you have provided to them through their personal injury case, and they unwittingly continue to receive benefits when they are no longer eligible, Medicaid will eventually find out and send the former Medicaid recipient a bill, demanding to be reimbursed for funds that Medicaid should not have paid during months eligibility was lost.
What is the Medicaid asset test in Florida?
Florida Medicaid Asset Test. The asset test just says that a Medicaid recipient cannot have more than $2,000.00 in combined countable assets. There are a few items that are usually not countable by Medicaid: the most typical of the excluded / non-countable assets are: the value of the homestead and one car.
Where to fill out SSA 8150-EV?
SSA-8150-EV must be filled out and sent to the SSA district office associated with the client's zip code (if on a Medicaid program associated with Social Security Income (SSI).You can use the Social Security office locator by clicking on the link and entering your zip code.
Can a medical malpractice lawyer help with Medicaid?
A Medicaid -planning lawyer will have other creative ways of protecting medical malpractice or personal injury settlement in order to maintain Medicaid eligibility, but this provides some basic information of what you should bethinking about to preserve Medicaid benefits after a personal injury client receives their portion of the financial recovery.
Does Medicaid count as an asset?
What is considered a countable asset? Nearly everything else– especially all funds that touch their bank account, brokerage account, etc… So, even though the IRS doesn’t count a personal injury settlement for tax purposes, Medicaid most certainly does when they are evaluating eligibility.
Can you gift Medicaid to IRS?
It will not. This line of thinking often gets those who want Medicaid in trouble. Medicaid gifting rules have nothing to do with IRS gifting rules.
What type of programs are affected by lump sum settlements?
Here are the types of programs that could be affected by accepting a lump sum settlement: Medicaid (Medi-Cal in California): A joint state and federal program that provides medical coverage for low-income individuals and families.
What is the food stamp program?
Supplemental Nutrition Assistance Program (SNAP): A state program (sometimes referred to as “food stamps”) that helps low-income individuals and families purchase food. Income and asset eligibility may vary by state and/or county.
Can a settlement be eaten up?
Some may assume that the acceptance of a settlement precludes an individual from needing government assistance. In reality, the financial impact of an injury can be devastating, and even a multi-million dollar settlement can be eaten up quickly by the cost of medical equipment, medications, physical therapy, adaptable vehicles and home modifications, attendant care, and more.
Is an entitlement benefit affected by a lump sum settlement?
Unlike needs-based benefits, entitlement benefits do not have income tests nor asset tests to determine eligibility. As a result, they should not be affected by the acceptance of a lump sum settlement. Here are some examples of entitlement benefits:
What is a spend down payment for Medicaid?
A “spend-down” means that the award recipient, like Mark, must spend all of the award proceeds on exempt items in the month the settlement check is received. It is important to note that, had Mark really received a settlement award on May 30th– he would only have two days to spend the entire sum if he doesn’t want to be ineligible for Medicaid! This is the law because although in May the settlement award is counted as income, the following month it is counted as a resource. Exempt items include one vehicle, money spent on a personal residence, as well as all of the bills itemized above in the Pooled Trust option.
Why does Mark have Medicaid?
EXAMPLE 1: Mark is 57 and has Medicaid because his monthly income is very low. He had a work related accident and is advised by his attorney that he will be awarded a settlement in May, 2017. Mark received a check on May 30th for $150,000.
Is a settlement award counted as income in May?
This is the law because although in May the settlement award is counted as income, the following month it is counted as a resource. Exempt items include one vehicle, money spent on a personal residence, as well as all of the bills itemized above in the Pooled Trust option.
Can a settlement reduce your government benefits?
Generally speaking, if your benefits depend on your income and/or resources, a settlement award will reduce or eliminate the amount of your government benefits unless you either set up a Trust with the help of a qualified attorney or engage in a “spend-down,” likewise with the help of a knowledgeable lawyer. If your government benefits are not ...
Does Medicaid count as income in a lawsuit?
If a young, non-disabled individual in receipt of Medicaid benefits is about to receive an award from a lawsuit, Medicaid will count the award/settlement as income in the month it is received.
Personal Injury Settlements and Public Assistance
Many people rely on assistance and benefits programs for monthly income and medical services. However, these programs often have strict financial eligibility requirements.
Special Needs Trusts
One way to avoid losing your cash assistance or government benefits is to create a special needs trust. Instead of creating a will to bequeath your possessions to your loved ones, you would use your property to fund a special needs trust.
Alternatives to Special Needs Trusts
There are other alternatives for when a special needs trust is not appropriate, such as when a personal injury settlement is relatively small.
If You Have Questions Regarding Cash Assistance, Benefit Programs, and Personal Injury Settlements, Contact Our Pennsylvania Personal Injury Lawyers
A personal injury settlement could be a huge financial windfall after a tragic accident or catastrophic injury. However, many people worry about losing their cash assistance or Social Security benefits if it is their only income. Our Lancaster personal injury lawyers will help develop a plan to address your concerns and circumstances.