Will a Personal Injury Settlement Affect My Food Stamps?

After a lengthy negotiation process, you finally have good news: The insurance company is willing to offer you a settlement. At first, you’re overjoyed. You desperately need that cash to pay off medical bills and credit card debt.

But then, you cast your eyes to your pantry, and your stomach sinks. You wonder, “Will a personal injury settlement affect my food stamps?”

Unfortunately, a settlement could affect your food stamps. A personal injury lawyer in Charlotte, NC, explains in detail below.

Settlement Effects on Food Stamp Benefits

A personal injury settlement can be a lifesaver, but in some cases, it may affect your eligibility for Supplemental Nutrition Assistance Program (SNAP) benefits, better known as food stamps.

This is because your settlement may put you over the income limit for SNAP. The state considers settlement money to be income, just like income you earn from your job.

If you accept a lump-sum settlement, the amount can put you over the annual income limit. If you have a structured settlement (a settlement that provides regular payments over time), you could be over the monthly income limit for food stamps. It’s also important to consider the right time to accept a settlement offer,, as the negotiation process can take months or even years, and rushing into an agreement may impact your financial eligibility for assistance programs.

SNAP Criteria in North Carolina

North Carolina SNAP doesn’t have asset requirements as some other states do for food stamps in the U.S., but the program does have monthly income limits. Limits are based on the number of people living in your household. For instance, if you have a family of four, you can’t have a total household income of more than $5,000/month. If you live alone, you cannot earn more than $2,430/month.

So, if you’re wondering, “Will a personal injury settlement affect my food stamps?” the answer is yes, it can.

Other Benefit Programs Impacted by Settlements

SNAP isn’t the only benefits program a personal injury settlement can impact. If you’re on Medicaid or Supplemental Security Income (SSI), your settlement can affect your eligibility for these programs or reduce your benefits. Settlements don’t affect Social Security Disability Insurance (SSDI) eligibility but may lower your benefits.

Additionally, if Medicaid or Medicare paid for your medical bills after an accident, the government can recover the amount paid from your settlement money. This is bad news because you may be left with very little money after Medicaid or Medicare takes its share.

A Special Needs Trust Can Help You Preserve Benefits

If you expect a settlement and want to keep your public assistance benefits, you may consider placing the settlement money into a special needs trust. Only those who qualify as disabled and are under 65 years old can open a special needs trust.

Placing settlement money into a special needs trust preserves benefits because the trust legally owns that money, not you. This doesn’t mean you’ll have no access to the money. However, you are limited as to what you can spend the money on without affecting your benefits.

For instance, you may spend the money on leisure and comfort items not covered by public assistance programs. These can include entertainment, counseling, and rehabilitation. Don’t use your trust funds to pay for rent, groceries, utilities, or property taxes, as doing so can jeopardize your benefits.

Settlements and Food Stamp Qualification: What To Do If You Expect a Settlement

If you expect a settlement soon, you might think you can preserve your food stamps by simply stashing the money under your mattress. This is a bad idea because there’s a good possibility that SNAP will find out about the settlement.

Instead of keeping your settlement a secret, it’s much wiser to report it to SNAP. This will allow you to talk with a support agent and explore your options for keeping benefits. If your settlement puts you over the income limit, an agent can also tell you when you’ll qualify for benefits again.

Learn More About Personal Injury Settlement and Public Assistance

If you’re still wondering, “Will a personal injury settlement affect my food stamps?” depending on your income, it might. The only way to know for sure is to speak with an attorney who understands the effect of settlements on public assistance programs. Calling your local SNAP agent can also help.

Our attorneys at Yale Haymond Law PLLC have years of experience with litigation in personal injury cases. We can tell you whether you might lose benefits because of a settlement and, if so, when you’ll be eligible to reapply.

For a consultation regarding personal injury compensation and public benefits, call us at (704) 800-HELP.