Will a Personal Injury Settlement Affect My Food Stamps?

Will a Personal Injury Settlement Affect My Food Stamps?

In 2021, approximately 73,830 households participated in the CalFresh program, which is nationally referred to as the Supplemental Nutrition Assistance Program (SNAP).

If you are receiving government assistance, such as SNAP or CalFresh, and you are injured, you may be wondering, Will a personal injury settlement affect my food stamps?

The short answer is that it might, but the long answer is a bit more complicated. 

In this article, Starpoint Law provides general information about personal injury settlements and the potential impact a settlement can have on eligibility for government assistance, such as food stamps.

If you are concerned about the impact an injury settlement might have on your eligibility for government benefits, you should consult with an experienced and knowledgeable personal injury attorney. 

Do You Have to Report a Settlement to Welfare in California?

Do you have to report a settlement to welfare in California? If you receive government benefits, sometimes you must notify the California government that you are the beneficiary of a personal injury settlement.

However, the reporting requirements depend on the types of benefits you are receiving. 

For example, within 30 days of filing a claim, Medi-Cal recipients must notify Medi-Cal that they have filed a lawsuit to recover compensation for a personal injury.

The information that needs to be included in a notice and where it must be sent will depend on the type of personal injury claim you are filing.

For example, medical malpractice victims must send notice to a particular agency within the Department of Health Care Services (DHCS). 

Other need-based government benefits programs, such as SNAP or CalFresh, require beneficiaries to report any income they receive.

This reporting requirement is in place because these programs are needs-based programs. A personal injury settlement will likely impact the value of your overall assets, which is how eligibility to receive benefits is determined.  

Likewise, those who receive Social Security Insurance may also have to report a personal injury settlement to the Social Security Administration. 

A personal injury attorney can help you navigate the income limits imposed by California law and help you minimize the impact a settlement will have on your eligibility for benefits.

For example, in some cases, you can reduce or eliminate the impact on your eligibility by accepting installment payments for your personal injury settlement rather than receiving the money in a lump sum.   

Can Welfare Take My Settlement?

If you have experienced a slip and fall or other personal injury accident and are receiving government benefits, you might be wondering, Can welfare take my settlement?

Depending on the type of benefits you receive, the government may take a portion of your financial award if it reimburses you for expenses paid by the program. 

For example, the DHCS might seek to recover some of the compensation you received from a personal injury settlement if you used Medi-Cal to pay for injury-related medical costs.

In most cases, DHCS will only take funds paid out by Medi-Cal and for which you received reimbursement from a third party in a lawsuit. 

Here is what that scenario might look like. Imagine you have incurred $5,000 in medical expenses because of a slip and fall.

You go to the hospital and ask them to submit a claim to your insurance provider, Medi-Cal. Later, the party who caused your slip and fall pays you $5,000 to compensate you for your medical expenses.

California law requires you to notify Medi-Cal of the personal injury settlement and allow them to recover from your settlement the $5,000 you received for costs covered by Medi-Cal.

In most cases, the money will automatically go to Medi-Cal before you receive it. 

Will a Personal Injury Settlement Affect My Food Stamps?

Winning a personal injury settlement may disqualify you from receiving food stamps or assistance from CalFresh, depending on the applicable law and how you receive the compensation.

For example, if you receive a lump sum payment, you may be disqualified from receiving food stamps for a period of time because you no longer meet the eligibility requirements.

A personal injury attorney can help you understand how a settlement might impact your eligibility to receive food stamps and formulate strategies to minimize the impact. 

When you receive a lump sum settlement that exceeds your calculated standard of need, it may impact your eligibility for SNAP benefits. Specifically, a successful personal injury lawsuit could result in a temporary disqualification from receiving SNAP benefits. It's essential to understand the potential consequences of such settlements on your food stamp eligibility

How Much Does a Personal Injury Lawyer Cost?

How much does a personal injury lawyer cost? Personal injury attorneys charge various amounts depending on their experience, the geographical area they practice in, and the type of case.

There are three standard fee arrangements that personal injury attorneys use: flat, hourly, and contingency. 

Before signing a representation agreement with an attorney, be sure you understand how they will be charging you to handle your case.

You should also explain to them that you are on government assistance and are concerned about a potential settlement’s impact on your eligibility for benefits. 

Flat Fee 

Under a flat fee arrangement, a lawyer typically charges a single, comprehensive fee to handle the entire case.

In some cases, the lawyer may charge extra to cover administrative costs, such as filing fees, but this is not always the case.

Flat fee arrangements are frequently used in straightforward lawsuits where the amount of work involved is predictable. 


Under an hourly arrangement, the attorney charges a certain amount per hour to handle the case.

Typically, the lawyer asks the client to pay a lump sum up-front, which the attorney deposits into a trust account.

The attorney will then transfer funds into their operating account as they earn the fees by performing work on the case.

Hourly fee arrangements are often used when a claim is complex and it is hard to determine how much work will be required to resolve the case.  


Finally, contingency fee arrangements are common, especially in personal injury cases. Under this arrangement, the client does not pay any upfront legal fees to the attorney.

Instead, the attorney receives a fixed percentage of the compensation the client gets if the attorney wins their case.

This can be an incredibly beneficial arrangement for personal injury victims, many of whom cannot work and are financially struggling.

Contingency arrangements allow you to seek legal representation without having to worry about how you will afford to hire an attorney.  

Contact a Skilled Personal Injury Lawyer at Starpoint Law

At Starpoint Law, our personal injury lawyer provides our clients with top-tier service and always strives to get them the best results possible.

Clients praise our team of experienced attorneys who truly dedicate themselves to helping others.

If you suffered a personal injury and have questions about how the settlement may impact your government benefits, contact our knowledgeable and friendly team today to schedule a consultation.

Author Photo

Aidin Ghavimi

Aidin is a partner at Starpoint LC, Attorneys at Law, and focuses on personal injury and employment law cases in and around Southern California. He earned his Juris Doctorate from the Loyola School of Law and his Bachelor’s from USC. Aidin’s primary goal is to bring justice to his clients and to ensure they are able to move on with their lives after a serious injury.

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