Lawsuits may or may not affect a person’s social security benefits. Excessive damages awarded in lawsuit are not common, but large awards are common enough to be a problem. Large settlements may affect the amount of benefits a person qualifies, but it does not affect an individual’s social security checks as much as it will his Medicare premiums. The recipient does have to report the earnings to both organizations. The Social Security Administration will make any adjustments necessary to a person’s benefit check. The amount of money awarded in most lawsuits does not affect social security benefits.
The average lawsuit does not award the plaintiff enough money to affect his benefits. He can report the monetary award to his local Social Security Office without fear that he will lose money in his monthly check. Large awards from a corporation or a hospital might change this, but few people seek more than the damages lost plus additional money for the suffering the injury caused. Judges increasingly throw frivolous lawsuits out, so the dreams of becoming rich after a minor accident are even less likely now. This method of getting rich relied on a long shot chance to begin with.
Getting a large legal settlement may not reduce a beneficiary’s social security benefits. The rules for retirement benefits and disability benefits are different. When in doubt, a person on social security who win a large settlement in a course case should check with his lawyer about it. His lawyer may charge money for giving this advice, but the lawyer usually takes his fee from the settlement. If he does not want to pay the lawyer, he can ask his local social security office about the reporting rules.