How Does A Personal Injury Settlement Affect SSI
SSI or Supplemental Security Income is a ‘means tested’ program which is that to be eligible a person must meet certain conditions. These are that a person must be disabled, blind or aged and must meet a resource and income tests. The limitations are as follows:
The income limit to qualify for SSI is $564 per month. Any money received towards food or shelter may be termed as income. The total resources that a person owns must not exceed $2,000. This could be cash, liquid assets or personal property that an individual can liquidate for money to provide food or shelter.
Certain exclusions exist that allow for receiving money in a manner such that the value is discounted. This involves creating a Special Needs Trust. For purposes of eligibility the income and principle from a special needs trust is exempt, on condition the trust is couched to comply with certain legal requisites. Furthermore, the trustee must make disbursements such that will not entail loss of benefits from government. These trusts are crafted to augment government benefits instead of replacing them. There are two types of such trusts -- third-party trusts where the trust is created by assets belonging to someone else and not the disabled, and self-settled trusts.
Since the funds to create the trust come out of a personal injury settlement which was awarded to the beneficiary, the latter would apply. To qualify, the trustee cannot be the disabled and he or she must be below 65 years of age. The trust cannot be revoked, and on the beneficiary’s death must pay back to the state the amount paid on account of the beneficiary up to the remaining assets of the trust.
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