Our personal injury legal system builds on the idea that victims deserve compensation for losses. When you are an injured victim, you must be made whole. In the world of personal injury, that means monetary compensation for your injury. It means that you are entitled to compensation for the time that you lose from work, medical expenses, pain and suffering, and loss of enjoyment for hobbies you once enjoyed. Even a spouse is entitled to compensation through a legal concept called a loss of consortium, which means that a husband or wife gets compensated for any injury to the marital relationship caused by the injury to the plaintiff spouse.
However, along with the concept of being made whole is the idea that you cannot unjustly benefit from a personal injury settlement or award. When you do not plan properly, a personal injury settlement or award can affect your government benefits. For example, if you receive health coverage through the need-based program of Medicaid, and you receive money as compensation for a personal injury, then Medicaid might put a lien on your settlement or award. A lien means that you are required to reimburse Medicaid out of your portion of the personal injury monies. There is also something called a Medicaid set aside. A Medicaid set aside means that a portion of your settlement or award must be set aside to cover future medical expenses related to the injury that you suffered.
Sometimes a lien can be so significant that it becomes a major obstacle for settlement. A lien might even prevent a case from settling altogether. Personal injury attorneys have experience dealing with liens. In most personal injury cases some third party has a lien. A lien can come from a worker’s compensation carrier or other insurance company. In the case of Medicaid recipients, a plaintiff gets put on notice by the agency administering that program.
Similarly, if you are a recipient of Supplemental Security Income (“SSI”) or food stamps, then your benefits can be affected by a personal injury settlement or award. SSI and food stamp programs provide resources to low-income individuals, and the programs have maximum income guidelines that get used in the administration of those programs. Your personal injury settlement or award may put you in a financial position where you’re no longer entitled to benefits under those programs. A personal injury settlement or award can even affect your eligibility under some need-based housing programs. That’s why it’s so important to work with a personal injury attorney as early as possible. Insurance companies and representatives of self-insured companies often know the value of settling a claim early and fast before a personal injury attorney becomes involved. Through quick and early settlement with an unrepresented claimant insurance companies and self-insured companies may close the exposure on a claim before the true value of an injury gets assessed. Not only do you risk settling for less than you deserve, but you also risk handling the claim in a manner that negatively affects your government benefits.
Government programs based on your past earnings should not be affected by a personal injury settlements or awards. Unlike Medicaid, SSI, food stamps, and need-based housing programs, which have income guidelines, amounts received from other programs such as Medicare or Social Security Disability Income (“SSDI”) get calculated based on your work history and earnings. Medicare and SSDI recipients buy into these government programs through their work history, and the amount they draw from these programs gets calculated from what they earned when they worked. As a result, the continuation of benefits under these two programs is typically unaffected by settlement or award. Nonetheless, it’s important to hire a personal injury attorney as early as possible because responsible parties and their representatives might use the knowledge that you receive benefits under one of these programs as leverage for a settlement.
A personal injury attorney can help you set up a trust, and a personal injury attorney knows how to handle a set aside. Personal injury attorneys have experience dealing with global settlements. A global settlement is between all parties and even third parties. It means that all interests get considered, but ultimately the injured plaintiff is most protected.
The Lamber Goodnow personal injury law firm, together with attorneys at its Chicago partner firms have experience in regard to how your personal injury case may affect your government benefits. Our Chicago personal injury lawyers never charge a fee, unless we win your case. Get a risk free consultation today.