Is there a chance I could still lose my SSI even if I "spend down" my settlement, use Exemption Planning, or setup a Special Needs Trust?



You should know that there is a chance that you will lose at least one month of your SSI eligibility even if you use one of these strategies. This can occur when Social Security views the receipt of settlement proceeds to be the income received in the month of settlement. That in turn triggers a one-month period of ineligibility, despite the “spending down” or transferring assets to a Special Needs Trust.

Remember, if you do not tell your Medicaid/government agency caseworker about your settlement within ten days of receiving the settlement funds, you could lose your benefits. All recipients of benefits MUST notify the agency responsible for administering their Medicaid program whenever there is a major change in their finances, like receiving a settlement award. Becoming a beneficiary of any trust is a major change in your finances, and you must provide the agency with a copy of the trust document. The government or agency’s lawyers will then review your trust to determine whether it meets all of the technical and legal requirements.

Also, you should know that giving away your settlement proceeds to a family member can also cause you to lose your benefits.

These suggestions we’ve talked about are based on general rules for needs-based government benefits. These rules may or may not apply to the specific benefits that you receive. If you have concerns about your eligibility, you should call a disability planner or your caseworker.