Government Benefit Preservation
Government Benefit Preservation
Claimants have a lot to account for with the financial implications of their settlements. One of the key issues many claimants need to resolve is eligibility for government benefits.
Government Benefit Eligibility
Needs-based government benefit programs employ asset and income tests to establish eligibility. Assets as low as $2,000 ($3,000 if married) in most states are sufficient to make a claimant ineligible for the majority of needs-based government benefits. Although entitlement benefits like Social Security Disability Income (SSDI), Social Security Retirement Income, and Medicare are not impacted by the settlement, there are a range of needs-based programs that could be affected, such as:
- Medicaid (Medi-Cal in California)
- Supplemental Security Income (SSI)
- Temporary Assistance for Needy Families (TANF)
- Supplemental Nutrition Assistance Program (SNAP)/Food Stamps
- Children’s Health Insurance Program (CHIP)
- Subsidized Housing
Options To Preserve Benefits With A Settlement
- Special needs trusts: A special needs trust helps keep an individual’s income under the limit for SSI and Medicaid eligibility. Money in this kind of trust covers nno-countable resources (things Medicaid and SSI don’t cover), like a home and furniture, higher education, a car, and life insurance. A special needs trust can be funded by a personal injury settlement.
- Pooled special needs trust: Pooled special needs trusts are formed and operated by nonprofit organizations by pooling together multiple trusts for investment. Money in a pooled special needs trust doesn’t count toward individual income, which helps maintain eligibility for government programs after settlement. It is usually less expensive to establish a pooled trust than a special needs trust, making it a viable option for those receiving a relatively small settlement.
- Spend-down: Most states feature spend-down provisions, allowing plaintiffs to spend most of their settlement in a specific time period, minimizing their assets to preserve eligibility for benefits.
- ABLE account: The Achieving a Better Life Experience Act allows qualified individuals/families to form a tax advantaged account to pay for qualified disability expenses without losing eligibility for means-tested government benefits.
- Medicare set-aside: A Medicare set-aside is established from a portion of a settlement and used to pay for future injury- or illness-related medical expenses that are otherwise payable by Medicare.
Work With Jay Scarola To Preserve Your Benefits
Some people assume that settlement proceeds should adequately replace lost benefits, but unfortunately for many injured claimants, the loss of benefit coverage can be disastrous. The compounding costs of medication, medical procedures, attendant care, and home modifications can quickly eat into even a large settlement. Jay Scarola works with injured claimants prior to finalizing the settlement to establish:
- The current and predicted eligibility of the claimant
- What the best course of action is to secure benefit eligibility while optimizing settlement proceeds.
Contact Us Today
Jay Scarola has spent the last two decades helping catastrophically injured clients optimize their settlement proceeds through the long-term financial stability and security of a structured settlement. If you are seeking to secure your benefits eligibility, you may need a console to maximize financial security. Jay Scarola can connect you with the specialists you need to establish your settlement proceedings. Call Jay Scarola to talk about settlement trust services today.