If you are one of the many people receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits due to a disability that prevents you from working, achieving a car accident settlement could impact your payments. It could reduce or even take away your benefits if your new assets with the settlement exceed program limits. A personal injury attorney in Albuquerque, NM can help you protect your disability benefits with smart solutions.
SSDI vs. SSI Impacts
The effects that a car accident settlement could have on your federal disability benefits in Albuquerque will depend on the type of Social Security benefits you currently receive. In New Mexico, receiving financial compensation for an automobile accident will typically not impact SSDI benefits.
SSDI benefits are based on the actual income you earn and the financial resources available to you. This includes your lifetime earnings and work history. Receiving a car accident settlement will not factor into the Social Security Administration’s (SSA’s) SSDI benefits decision, and will not take away ongoing SSDI payments.
SSI benefits, on the other hand, could be impacted by a car accident settlement. This is a needs-based program that can change according to updates in the recipient’s financial status. If your financial need changes due to a lump-sum car accident settlement being deposited into your account, this could push you over the limit to receive SSI payments. As of 2025, this limit is $2,000 a month for an individual and $3,000 for a couple.
Medicare and Medicaid Benefits
Medicare benefits that you qualify for as an SSDI recipient should not be affected by a car accident settlement. This type of health insurance benefit is not based on income and therefore should not be impacted by a settlement or judgment award. If you receive Medicaid coverage, however, this (like SSI) is a needs-based benefit that a settlement could disqualify you from if your assets are raised above the federal limit.
How to Handle a Car Accident Claim as a Recipient of Disability Benefits
It is important to be aware of the potential impacts to your disability benefits that a car accident settlement in Albuquerque can have ahead of time. This can allow you to take preventive action to avoid a temporary or permanent loss of your federal benefits. Here’s what to do.
Notify Your Lawyer
Work with an experienced car accident lawyer in Albuquerque, NM throughout your case to more effectively plan ahead. An attorney can guide your decisions before you are locked into a settlement to help you protect your disability benefits as much as possible.
Inform the Social Security Administration
As a recipient of SSI benefits, you are legally required to notify the SSA about a car accident or personal injury settlement. You must do this within at least 10 days of receiving the money. Failing to do so could lead to the loss of your benefits and other penalties. Note that you do not have to report a settlement if you are a recipient of SSDI benefits only.
Consider Your Options
An attorney can help you plan for how to protect your disability benefits upon receiving a car accident settlement. Putting the settlement into a Special Needs Trust, for example, could prevent it from being considered an asset for SSI and Medicaid purposes. Choosing a structured settlement, where you receive smaller payments over time instead of a lump sum all at once, could also help protect your disability benefits.
Protect Your Financial Future With Help From an Attorney
You do not have to forfeit your federal disability benefits to accept a car accident insurance settlement in Albuquerque. Planning ahead with a lawyer can protect you financially as a person living with a disability. Get an attorney’s guidance for your car accident case today by contacting The Fine Law Firm for a free initial consultation.