Disability Lawsuits: Can You Be Held Accountable?

Disability lawsuits can arise from a variety of situations, including worker's compensation claims, disability discrimination, personal injury, medical malpractice, and federal court appeals. When it comes to the impact of a disability lawsuit settlement on existing disability benefits, it's important to distinguish between Social Security Disability (SSD/SSDI) and Supplemental Security Income (SSI). SSDI benefits are available to disabled individuals who have contributed to the Social Security trust fund, and a personal injury settlement will not affect these benefits. On the other hand, SSI is a needs-based government benefit with income and asset limitations, so a settlement may impact eligibility. To avoid losing SSI benefits, individuals can seek legal solutions such as transferring settlement funds into a special needs trust.

Can Disability Hold a Lawsuit Settlement Against You?

Personal injury settlements and disability benefits

Personal injury settlements can affect an individual's disability benefits, but this depends on the type of benefit and the circumstances of the settlement.

SSDI Benefits

SSDI (Social Security Disability Insurance) benefits are generally not affected by personal injury settlements. This is because SSDI benefits are based on the amount of time an individual worked before their disability, rather than their income. However, if an individual is receiving SSDI benefits and other public disability benefits, their total monthly benefits cannot exceed 80% of their average earnings before they became disabled. If the total amount of benefits exceeds this threshold, the excess amount will be deducted from their SSDI benefit.

SSI Benefits

SSI (Supplemental Security Income) benefits, on the other hand, are often impacted by personal injury settlements. SSI is a needs-based welfare program with specific financial eligibility requirements. A personal injury settlement can significantly increase an individual's reported income, which may result in a reduction or termination of their SSI benefits. In some cases, even a small settlement amount may disqualify an individual from receiving SSI benefits.

To mitigate the potential loss of SSI benefits due to a personal injury settlement, individuals can consider the following options:

• Consult a special needs planning lawyer or a disability attorney who can guide them on protecting their settlement funds and minimizing any negative impact on their disability benefits.
• Establish a special needs trust (SNT) to manage their settlement proceeds and preserve their eligibility for SSI benefits. By placing the settlement funds into an SNT, the funds are no longer considered "countable" under Medicaid's rules, and individuals can continue to receive SSI benefits.
• Work with an attorney to structure the settlement in a way that minimizes the impact on their SSI benefits.

It is important to note that the impact of a personal injury settlement on disability benefits can vary by jurisdiction, and individuals should seek specialized legal advice to understand their specific situation.

Disability discrimination lawsuits

Employment:

In the United States, the Equal Employment Opportunity Commission (EEOC) enforces the Americans with Disabilities Act (ADA), which prohibits discrimination against individuals with disabilities in all employment practices, including hiring, firing, and promotion, and reasonable accommodation. If an individual experiences disability discrimination at work, they can file a complaint and potentially file a lawsuit against their employer. For example, in a case against McLane Northeast, a jury awarded $1.675 million to a Deaf applicant who was refused an interview and subsequently denied employment due to her disability.

Public Accommodations:

Government Services:

Settlement Considerations:

When it comes to disability discrimination lawsuits, individuals should be aware of the potential impact on their disability benefits. While a lawsuit cash advance is unlikely to affect benefits, a substantial settlement may increase income or assets, potentially affecting eligibility for programs like SSI and SSDI. Consulting with an attorney specializing in special needs planning and personal injury law can help individuals navigate these complexities and explore options like special needs trusts to protect their benefits.

In summary, disability discrimination lawsuits play a crucial role in enforcing the rights of individuals with disabilities in various aspects of life, including employment, access to public accommodations, and government services. By holding entities accountable, these lawsuits promote inclusion, equal opportunities, and compliance with the ADA.

ADA violation cases

If you experience disability discrimination or retaliation, you can hold your employer accountable by bringing a case against them under the ADA. The first step is to submit discrimination complaints and then potentially file a lawsuit against your employer.

The value of your ADA violation case depends on several factors. For instance, the amount in disability discrimination settlements sometimes varies from what you can obtain in court. Companies with over 500 employees can be sued for up to $300,000 in punitive and compensatory relief for ADA discrimination lawsuits. This limit does not affect recovery for lost wages, which is uncapped. Companies with 101-200 employees can be sued for up to $100,000.

• In March 2014, the EEOC settled an ADA case with Walmart to obtain relief for a worker with an intellectual disability. The company allowed a coworker to sexually harass the worker for several years, despite several managers knowing about the harassment. The agreement included $363,419 to pay the worker for lost wages and other harm.
• In December 2022, the EEOC settled an ADA case with JDKD Enterprises, a company that owns and operates numerous McDonald's restaurants, to obtain relief for a worker on the autism spectrum. The company fired the worker because of his autism spectrum disorder, and the settlement included $100,000 to pay the worker for harm.
• In July 2021, a jury in an ADA case filed by the EEOC found that Walmart discriminated against a 16-year employee with Down syndrome. The EEOC’s lawsuit alleged that Walmart denied the employee the accommodations she needed and then fired her because of her disability. The jury awarded the worker over $125 million in damages, which was later reduced due to legal limits.
• On December 20, 2021, the United States sued Barnet Dulaney Perkins Eye Center, PC (BDP), an optometry and ophthalmology provider, for violating Title III of the ADA.
• On January 30, 2024, the United States filed a complaint against MedStar Health, Inc., a leading healthcare provider in Maryland and the greater Washington, D.C. region.
• On January 16, 2025, the United States sent a letter of findings to the State of Idaho, notifying the State that it is violating Title II of the ADA by unnecessarily segregating adults with physical disabilities in nursing facilities.

Special Needs Trust (SNT)

A Special Needs Trust (SNT) is a legal arrangement that can hold funds for the benefit of an individual with a disability without disqualifying them from receiving needs-based government benefits such as Medicaid and Supplemental Security Income (SSI). The funds in an SNT can be used for anything the beneficiary chooses, including medical expenses, home care, transportation, and housing costs.

There are two main types of SNTs: third-party and first-party. A third-party SNT is funded by someone other than the beneficiary, typically a parent, grandparent, or sibling, and is the most common type. It can be revocable or irrevocable and can be set up as a stand-alone or testamentary trust. A stand-alone trust gives the beneficiary access to the assets during the grantor's lifetime, while a testamentary trust is contained within a last will and testament and is only funded after the grantor's death.

A first-party SNT, on the other hand, is funded by the beneficiary themselves and is also referred to as a "self-settled" or "(d)(4)(A) trust." This type of SNT requires court approval and includes a Medicaid repayment provision, which stipulates that any remaining assets in the trust will be used to repay Medicaid after the beneficiary's death.

To preserve the beneficiary's eligibility for government benefits, federal law requires that the beneficiary of an SNT must be under the age of 65 when the trust is created, and the trust must be irrevocable. Additionally, the trust must provide that Medicaid will be reimbursed upon the beneficiary's death or termination of the trust, and it must be administered for the sole benefit of the beneficiary.

Loss of SSI benefits

If you receive any compensation for income, it may lead to a reduction or termination of your SSI benefits. However, you can maintain your eligibility by passing an asset test. The test factors in all the income and payments you receive (including lawsuit settlements). There is a set dollar amount you can earn, which varies depending on your location and marital status. Anything over that, and you won't be eligible for SSI, meaning you won't receive benefits if the settlement pushes you above the limit.

In the United States, SSI benefits are determined based on income and assets. Therefore, receiving a personal injury settlement may effectively increase your income or assets, and you will need to report the settlement amount to the Social Security Administration within ten days of receipt. The government may then reduce your SSI benefits or request a reimbursement for previously paid benefits.

To avoid losing your SSI benefits, you can take steps to legally transfer the personal injury settlement funds into a special needs trust (SNT). A first-party SNT is a legal arrangement that can hold your settlement funds for your benefit. By putting the settlement proceeds into the trust, you can possibly maintain eligibility for SSI benefits. The trust and your SSI benefits can pay for your healthcare costs and are available to meet all your daily needs.

It is important to carefully review the rules and regulations with a qualified attorney to understand your settlement's potential impact on your SSI benefits. An attorney with expertise in special needs planning and personal injury law can help evaluate your specific circumstances and the laws governing your state. Additionally, an experienced attorney can help you understand what your personal injury case is worth and how it may interact with your SSI benefits.

Frequently asked questions