Do you have a plaintiff that receives SSI and or Medicaid (adult or minor)?
Does your plaintiff have a spouse that receives SSI and or Medicaid?
Does your plaintiff have children that receive Medicaid?
If you have answered any of these questions ‘YES’ it is critical to carefully review and plan the award distribution so that the lawsuit award does not disqualify his or her SSI, Medicaid or other government-assisted benefits, or disqualify someone within their household.
Many of our nation’s poor make ends meet with federal and state funds (assisted benefits) they receive through programs restricted for the most economically disadvantaged. Qualification is determined through means testing, a process that reviews and checks applicant’s income, assets and resources. This includes lawsuit awards. Exceeding the income and resource statutory qualification thresholds can disqualify and or change the amounts received from government-assisted benefits.
Some of the federal and state “means tested” programs include:
- Temporary Assistance for Needy Families (TANF)
- Supplemental Security Income (SSI)
- State Children’s Health Insurance Program (SCHIP)
- Housing Choice Vouchers
- Public Housing
- Food Stamps
- Women, Infants and Children Nutrition (WIC)
One of the obstacles that may hinder settling a personal injury suit, and certainly an area of potential professional negligence, is the loss of these government-assisted benefits. This can occur if the plaintiff receives all or a portion of their settlement award in upfront cash, an amount that exceeds the statutory qualification thresholds. In the exceptional case where the settlement award is significantly greater than the lifetime value of the governmental assisted benefits, the loss of the government-assisted benefits may be of little consequence.
In many settlements, losing the government assisted benefits economically disadvantages the injured party and may produce a worse financial situation than prior to settlement. Under this scenario, should the plaintiff take their settlement in a lump sum, or a portion in upfront cash, they will be forced to exhaust the lump sum or portion of upfront cash, (known as “spend down”) before reapplying for their government assisted benefits. During the period of time where they are trying to reapply, they may have no income and risk tougher scrutiny as they attempt to re-qualify for benefits.
When the disabling injury occurs to a minor, government assisted benefits may not be available due to the combined income and resources of the family and household members. Nonetheless, a special needs trust (often combined with the structured settlement benefits) for the minor’s benefit, may still be appropriate and should be considered as the child may become eligible once independent of his or her family (most generally at age 18), should the parents or guardians pass away, or should the child move to an assisted living care facility.
There are also minors that do not qualify or require a special needs trust, nevertheless, they qualify and receive Medicaid. In this scenario, it is important to properly plan the structured settlement and have government approval (for example in Texas, by Texas Health and Human Services Commissions).
ROBINYOUNG & COMPANY takes considerate steps to review a plaintiff and their household’s government assisted situation, and to further coordinate efforts and expertise with trustees and trust attorneys when determining the best Plan of Care for those requiring a special needs trust and or structured settlement annuity. In this way, the settlement is outlined so that the structured settlement and a special needs trust can work with federal government benefits programs to protect the long-term financial security of disabled individuals, minors and their families.
Learn more by contacting ROBINYOUNG & COMPANY.