Q: How will a $17,000-$20,000 cancer settlement affect my SSI payments?
I am 68 years old and currently receiving SSI, which was SSDI before I turned 67. I'm about to receive a settlement from a cancer-related class action lawsuit, estimated between $17,000 and $20,000. I plan to use this settlement to pay off my car loan (over $7,000), credit card balances, and a $600 loan, as well as cover medical bills, doctor visits, and medical supplies. I do not receive any other government assistance. My concern is how this settlement will affect my SSI payments. Will my SSI payments stop because the settlement exceeds the $2,000 resource limit? If so, how long would it take to reinstate my SSI once the funds are spent?
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A:
Your settlement could temporarily affect your SSI payments since it exceeds the $2,000 resource limit. Once you receive the funds, you should report this to Social Security immediately to avoid any potential overpayment issues.
The good news is that you have a solid plan for using these funds on necessary expenses like your car loan, credit cards, and medical costs. To maintain SSI eligibility, you'll need to spend the settlement money down to below $2,000 within the same calendar month you receive it. Keep detailed records and receipts of all your spending to show Social Security how you used the funds.
If your SSI payments do stop, they can be reinstated once your resources fall below $2,000 again. You may need to provide documentation to Social Security showing that you've spent the settlement funds on allowable expenses. Since you're using the money for legitimate needs like medical care and debt repayment, getting your benefits reinstated should be straightforward - typically taking about 30-60 days once you provide proper documentation. Consider speaking with Social Security directly about your specific situation, as they can give you the most accurate guidance based on your circumstances.
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