If you’ve been injured in an accident that was caused by a third party you could be eligible to seek compensation through a third-party claim. Depending on the severity of your injury, you may also be eligible for Social Security Disability. But can you claim both at the same time and what impact will compensation from one have on the other?
What Is A Third-Party Claim?
A third party claim is commonly known as a personal injury lawsuit. These lawsuits can be filed against the person or group whose negligence resulted in injury to others.
Negligence occurs when someone fails to take reasonable action to keep others safe. To give you an example, every driver knows that they should keep their eyes on the road so that they don’t veer off and hit another vehicle. If a driver chooses to text, read, or even groom and this action results in an accident, they would be considered at-fault and negligent.
The law allows the victims of negligence to take action against those responsible so that they have the opportunity to recover compensation for injuries that they would not have otherwise sustained.
How Can A Third-Party Claim Provide Compensation?
When the outcome of a lawsuit is favorable for a plaintiff, compensation comes in two forms: a settlement or a verdict.
A settlement is a pre-trial agreement between the involved parties. It is unusual for a first offer to be accepted and negotiations are common. When an agreement is reached, the plaintiff can avoid going to court, will pay less in legal fees, and will know exactly how much they will receive. The payment typically comes quickly, within 30 days.
If the case goes to court and a judge/jury sides with the plaintiff, they will be awarded a verdict. This verdict will be an unknown amount, although there is a chance that it will be much larger than any settlement. It may also take some time to receive the payments as this decision can be appealed.
If I Do Recover Compensation, Will This Hurt My Social Security Disability Benefits?
What’s important to remember is that the majority of settlements and awards recovered by a plaintiff are supposed to help them recover from their losses – including any wages that are lost because of their inability to work.
If the settlement or award specifically indicates a payment for lost wages, this could be counted as income by the Social Security Administration and could seriously impact your benefits.
However, if there is no recovery for lost wages, then the Social Security Administration will not count a settlement or award as income and any amount received should have no impact on your benefits.
In order to determine what you must report to the Social Security Administration, consult with an experienced work injury attorney or social security disability attorney.
What Is A “Special Needs Trust”?
A special needs trust is a way for someone with a disability to obtain compensation from a lawsuit without losing benefits. These trusts can only be used for the benefit of the sole beneficiary and can be created for individuals who meet the government’s definition of disabled.
The process of creating and then taxing special needs trust is very complicated and is best done with the help of an experienced attorney.