Does a personal injury settlement affect food stamps?

Yes, a personal injury settlement can affect your food stamps. The Supplemental Nutrition Assistance Program (SNAP) is a needs-based program. Both your income and assets are considered when determining your eligibility. A settlement can change your income or assets, even if it was meant to cover medical bills or lost wages.

Before accepting a payout, speak with a Lake Charles personal injury attorney who can help protect both your finances and your benefits.

How can a personal injury settlement affect your SNAP eligibility?

Lump-sum settlements and structured settlements are treated differently by food stamp programs:

• Lump-sum settlements are often considered countable assets. If your total assets exceed Louisiana’s SNAP limit, you could lose your eligibility for benefits.
• Structured settlements provide recurring payments, which may be treated as monthly income. If your household income goes above the SNAP income threshold, your benefits may be reduced or eliminated.

According to the Consumer Financial Protection Bureau (CFPB), converting structured settlement payments into a one-time lump sum can also affect your eligibility for public benefits like SNAP. These payments may be counted as either income or resources, depending on how they are received and reported.

Do you have to report a settlement to SNAP?

Yes. In Louisiana, you must report any changes to your income or assets to the Department of Children & Family Services (DCFS) within 10 days. That includes receiving a personal injury settlement. If you don’t report it, you could lose your benefits or be removed from the program.

Can a special needs trust protect your benefits?

In many personal injury cases involving individuals with disabilities, a special needs trust (SNT) can help protect eligibility for needs-based programs like Supplemental Security Income (SSI), Medicaid, and, in some cases, SNAP. This type of trust allows settlement funds to be managed in a way that generally avoids counting them as available income or assets.

An SNT may be appropriate if:

• The injured person is under age 65 and meets the Social Security Administration’s definition of disability
• They receive SSI or Medicaid
• They rely on other income-based benefits and have long-term financial needs

Properly setting up an SNT requires guidance from an attorney familiar with public benefits and trust law. It can be a useful tool for protecting both your recovery and your access to critical support programs.

What other benefits could be affected?

Many government programs use your household income to decide if you qualify. Because of that, a personal injury settlement could also affect other benefits. Each program has its own rules, so the impact may be different for each one.

• SSI or SSDI (especially if on concurrent benefits)
• Medicaid eligibility
• Housing assistance
• Other state-based programs

Why speak to a personal injury attorney?

If you rely on SNAP or other needs-based programs, the structure of your settlement matters. Our team will walk you through your options and help you understand how lump-sum or structured settlements may impact your benefits.

We don’t stop at winning compensation; we help you protect it. With over 30 years of trusted service in Lake Charles, The Johnson Firm is here to advocate for your full recovery without putting your access to critical programs at risk. We serve injured clients throughout Lake Charles and southwest Louisiana.

Call (337) 433-1414 or contact us online to schedule a consultation with a Lake Charles personal injury attorney today.