• Christopher Le

How do I protect myself from losing my SSI benefits after receiving a settlement check?

Supplemental Security Income (SSI) is a program that does not require a disabled individual to qualify through work credits. This is a “needs-based” program, and qualifying will be based on your income and assets. As such, when you receive a personal injury settlement, it could cause you to exceed the program’s asset limits, which could result in having your benefits suspended.


There are a few ways to avoid losing your SSI benefits when receiving a personal injury settlement. The first is to do a “spend down”. A spend down is the process of spending the excess funds until the benefits recipient reaches the allowable asset maximum (for individuals it’s $2000 and for couples it’s $3000). This is typically done within the first month that the lump sum is received so the recipient will only lose one month of benefits.


Some qualifying expenses that could be paid using a spend down include:

  • Paying off a home mortgage.

  • Making home repairs or modifications to accommodate the recipient’s disabilities.

  • Education expenses.

  • Paying off existing debts, such as credit cards and student loans.

  • Prepaying for burial expenses.


The biggest downside of a spend down is that you will have spent down your settlement award and will not have it for emergencies and important expenditures that may come up in the future. The other way way to protect your SSI benefits is to set up a ‘special needs trust’. This type of trust is designed for those who are physically or mentally disabled, and they are managed by a third party that oversees expenditures from it.

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