Ask Larry

Will The Money That I Receive From A Court Settlement Affect My Disability Benefits?

I have been on SSDI for 2 years and I am potentially going to get a settlement from my previous employer for disability discrimination, harassment and retaliation for taking FMLA. Will any money I get from this settlement affect my disability benefits?

Hi,

No, assuming that you're receiving Social Security disability benefits (SSDI) and not Supplemental Security Income (SSI). SSI is a needs based program, so receipt of any type of income can affect those benefits. SSDI, however, would only potentially be affected if you receive earned income from working (i.e. wages or self-employment income).

The only way that a settlement such as what you describe might be an issue would be if the payment received is classified as back wages and you receive a W-2 form. Even then, though, it wouldn't affect your SSDI as long as the payment relates to work that you did prior to the date that Social Security said you became disabled. If you do receive a W-2 form related to a settlement, you'll want to contact Social Security and provide them with documentation to show that the payment does not relate to work performed after you became eligible for SSDI.

Best, Jerry

Posted: 
Jan 7 2019 - 12:37pm
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