Will money from a lawsuit affect my SSI and/or Medicaid?

Yes, you should read this if you live in Washington State, you get Supplemental Security Income (SSI) and/or Medicaid, and you get money from a lawsuit.

Yes. Lawsuit money can affect your benefits because SSI and Medicaid have a limit on the amount of money you can have in cash or in a bank account. These are your resources. 

In most situations, the resource limit for SSI and Medicaid is $2,000 for one person or $3,000 for a couple. Not all resources count toward this overall resource limit. 

Cash and bank accounts count towards the resource limit. Physical property can also count if it is not your home, and you can easily sell it. 

Some money and types of property do not count (they are exempt). This can include things that you need for everyday life, like a house or apartment, a car, clothing, and household goods. 

You will usually have 3 options. You can do any or a combination of these:

• You can spend or use the resources.

• You can temporarily stop getting SSI and/or Medicaid.

• You can find another way to hold onto the resource(s) and stay on SSI and/or Medicaid.

We discuss below how you can spend or use the resource(s). This is often your best option if the money or property is only a little over the resource limit. And you may decide to place up to $16,000 each year into an ABLE Account if you are eligible. Read Special Needs Trusts and ABLE Accounts to learn more about ABLE accounts.  

You might learn that you will get a gift, settlement, or inheritance that is too large to spend quickly. If this happens, you should talk to a lawyer. You might need to consider having a court set up a Special Needs Trust for you. Read Special Needs Trusts and ABLE Accounts to learn more about these options.   

*See State v. Luvert, 20 Wash.App.2d 133 (2021).

If you are a patient at Western State or Eastern State Hospital, your SSI and Medicaid are generally suspended for as long as you are at the hospital. They restart when you discharge.

If you are over the resource limit for SSI or Medicaid at the time of discharge, this could make you ineligible to get these benefits. This could delay your discharge.

The State might try to bill you for your treatment at the State Hospital because of money you got from Luvert sanctions. You will know the State will try to do this if you get a "Notice and Finding of Responsibility." It says the State is going to bill you for your cost of care.

If you get a Notice and Finding of Responsibility, and you want to fight the hospital's right to bill you, you must file an appeal within 28 days. If you get a notice that the hospital is going to bill you and you want legal help, you should immediately call the Patient Legal Services Office at Western State Hospital at 253-756-2965 or the Health Justice initiative at Eastern State Hospital at 509-381-2352.

If you currently have too much money to qualify for SSI or Medicaid, you can spend money on the items listed here.

• A home (SSA may reduce your SSI income for the month you received the home)

• Furniture or appliances for your home

• Medical expenses or bills not covered by Medicaid or Medicare

• Dental expenses, eyeglasses, physical therapy, and so on

• Education expenses (including computer, software, books, and so on)

• Entertainment or recreation expenses

• Vacation travel

• Pay a lawyer to do estate planning and/or Medicaid planning

• Pay off debts

• Pre-pay burial arrangements

• Personal hygiene (haircuts, manicures)

• A vehicle, pay for registration and insurance

• Clothing

• Set aside up to $2,000 for a single person, or up to $3,000 for a married couple, in non-exempt resources, such as in savings or checking, etc.

Read What can I buy and still be eligible for SSI and/or Medicaid to learn more.