When Can You File An SSDI Lawsuit After A Denial?

Written By:
Jessie Paluch
Jessie Paluch

Attorney Jessie Paluch, founder of TruLaw, has over 25 years of experience as a personal injury and mass tort attorney, and previously worked as an international tax attorney at Deloitte. Jessie collaborates with attorneys nationwide — enabling her to share reliable, up-to-date legal information with our readers.

This article has been written and reviewed for legal accuracy and clarity by the team of writers and legal experts at TruLaw and is as accurate as possible. This content should not be taken as legal advice from an attorney. If you would like to learn more about our owner and experienced injury lawyer, Jessie Paluch, you can do so here.

TruLaw does everything possible to make sure the information in this article is up to date and accurate. If you need specific legal advice about your case, contact us by using the chat on the bottom of this page. This article should not be taken as advice from an attorney.

Key takeaways:

  • You have 60 days to file an appeal after receiving a denial for SSDI benefits, beginning with a request for reconsideration.
  • Seeking the help of an attorney who specializes in SSDI can increase your chances of overturning the rejection during the appeals process.
  • Substantial medical evidence is critical to building a successful SSDI lawsuit by proving your disability and its impact on your ability to work.

When Can You File an SSDI Lawsuit After a Denial?

On this page, we’ll discuss the right time to file for an SSDI Lawsuit following a rejection, the filing process, who qualifies to file an SSDI Lawsuit, and much more.

Intro To SSDI Lawsuit

Receiving a denial for your Social Security Disability Insurance (SSDI) claim can be a significant setback, especially when you’re counting on those benefits for financial support.

Many assume that a denial letter marks the end of the road; however, it’s merely a hurdle in a complex and misunderstood appeals process.

As an expert with extensive experience navigating the intricacies of SSDI claims and denials,

We guided countless individuals through successful appeals, illuminating paths where many initially see dead ends.

When Can You File An SSDI Lawsuit After A Denial

A crucial fact to remember is that time is of the essence: after receiving your SSDI denial, there’s typically only a 60-day window to initiate an appeal.

This article will be practical steps to prepare for filing an SSDI lawsuit post-denial—empowering you with strategies proven effective in reversing unfavorable decisions.

Gain insights you won’t find elsewhere a blueprint designed to navigate this challenging terrain effectively.

Keep reading to unravel these actionable solutions.

Table of Contents

Legal Pathways After SSDI Claim Denial

After the Social Security Administration (SSA) denies a claim for SSDI benefits, claimants have specific legal pathways they can pursue.

These primarily include initiating an SSDI lawsuit in federal court or going through hearings before an administrative law judge.

Filing a Lawsuit in Federal Court

When administrative appeals are exhausted, filing a lawsuit in federal court becomes an option.

Claimants usually reach this step if an Administrative Law Judge (ALJ), the Appeals Council, and the SSA all deny the claim for disability benefits.

A federal lawsuit is often seen as the last legal tool available in the pursuit of SSDI benefits.

The initiation of a suit must adhere to strict deadlines—claimants have 60 days after the last denial to file their case in court.

The Role of Administrative Law Judges

Administrative Law Judges are at the center of the administrative hearing process for denied SSDI disability claims.

They are different from judges in a personal injury lawsuit because ALJs focus specifically on federal administrative cases involving agencies like the SSA.

An ALJ’s role involves a comprehensive review of a claimant’s case, including evidence and testimony.

Claimants are encouraged to seek professional advice to ensure they are well-prepared for this hearing.

The ALJ’s decision can affirm, reverse, or modify previous determinations made at the SSA level.

The importance of these judges cannot be overstated, as their judgment could be a claimant’s key to receiving Social Security disability benefits.

The SSA’s guidelines provide a clear outline for more information on the appeal process and the role of ALJs.

Potential Benefits and Compensation

When an individual’s application for Social Security Disability Insurance (SSDI) is denied, understanding the potential benefits and compensation that may be recovered through a successful lawsuit or subsequent appeal is crucial.

This includes the monthly SSDI benefit payments individuals are entitled to receive and the complex interplay between SSDI and workers’ compensation benefits.

Monthly SSDI Benefit Payments

Monthly SSDI benefits provide financial support to eligible individuals who are unable to work due to a qualifying disability.

An individual’s monthly SSDI benefits is based on their average lifetime earnings before their disability begins.

In 2024, the average monthly lump sum payment for an SSDI recipient is approximately $1,358, but this can vary with each individual’s work history and earnings.

Workers Compensation and SSDI Offsets

Recipients of workers’ compensation benefits may experience an SSDI offset if they also receive SSDI.

This offset ensures that the combined amount of workers’ compensation settlements and SSDI benefits does not exceed 80% of the individual’s average current earnings before becoming disabled.

The benefit offset serves to prevent excessive total compensation and maintain financial security while facilitating some income for the disabled party.

It is paramount for individuals to disclose workers’ compensation awards to the Social Security Administration (SSA) to prevent overpayment, which could result in future deductions from SSDI payments or a necessity to repay benefits.

Impact of Lump Sum Settlements and Other Benefits on SSDI

When individuals on Social Security Disability Insurance (SSDI) receive lump sum settlements or other forms of compensation, their SSDI benefits can be impacted.

These financial adjustments require careful consideration to ensure benefit continuity.

How Lump Sum Payments Affect SSDI

Lump sum settlements, particularly those from workers’ compensation or personal injury cases, may trigger a reduction or suspension in SSDI benefits.

The Social Security Administration (SSA) employs benefit offsets to account for additional income; thus, any lump sum received is portioned out as if it were an ongoing monthly benefit.

For example, a workers’ compensation claim settlement will be divided by the monthly SSDI benefit amount to ascertain the duration for which SSDI payments will be reduced or paused.

The implications of receiving a lump sum payment is essential for Social Security Disability Insurance (SSDI) beneficiaries, as it can have significant effects on their benefits and eligibility:

  • SSI Eligibility: Receiving a significant lump sum could disrupt SSI eligibility because SSI is a needs-based program, and additional income may signify that one’s financial needs are less pressing.
  • Protecting SSI Benefits: Careful planning is vital to protect SSI benefits, including the potential use of Special Needs Trusts or similar financial tools, to prevent a lump sum settlement from having an adverse effect.

Interactions Between SSDI and Other Forms of Compensation

The interactions between SSDI and other forms of compensation, such as settlements and concurrent benefits, always require attention to maintain compliance with SSA regulations.

SSDI and other forms of compensation require careful navigation to adhere to SSA guidelines:

  • Concurrent Benefits: If an individual is receiving other government benefits, such as Supplemental Security Income (SSI), the impact on SSDI benefits can be significant. While SSDI considers other income to a lesser extent, SSI is affected dollar-for-dollar after a small disregarded amount.
  • Settlement Proceeds: How a settlement affects benefits depends on the nature of the settlement. Personal injury settlements could be structured in a way that maximizes the injured party’s benefits and reduces the likelihood of losing eligibility.

The SSA’s stringent rules around lump sum payments make it imperative for SSDI recipients to understand the implications of receiving such settlements on their current and future benefit status.

Financial and Medical Considerations in SSDI Lawsuits

When filing an SSDI lawsuit after a denial, it is imperative to understand the financial and medical considerations.

These include projecting future medical expenses, navigating financial eligibility criteria, and managing legal costs.

Calculating Medical Expenses and Future Needs

Medical expenses are a primary concern in an SSDI lawsuit.

Estimating current and future medical costs accurately is important, as are considering treatments, medications, and potential home modifications.

In cases of structured settlements, part of the negotiation often involves ensuring that the entire settlement accommodates long-term medical needs.

Addressing Financial Resources and Asset Tests

SSDI claimants need to be aware of resource limits and asset limitations that can affect eligibility.

The asset test for SSDI is stringent; applicants must disclose all forms of financial support and financial assistance, including any received as part of a settlement agreement.

Failing to do so could potentially disqualify a claimant from receiving benefits.

Negotiating Attorney Fees and Settlement Agreements

Strong negotiation of attorney fees is critical to retaining a greater portion of the settlement.

Attorney fees in SSDI cases are often limited by law, but it’s beneficial to understand the fee structure upfront.

The terms of any settlement agreement should be reviewed carefully to ensure the claimant’s financial interests are well-protected, including the impact on SSDI benefits.

Protecting Your SSI and SSDI Benefits

When safeguarding your Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) benefits, it’s crucial to understand how resource limits and benefit offsets work.

Utilize legal instruments such as special needs trusts to maintain eligibility and plan personal injury settlement proceeds, spending carefully to avoid unexpected reductions in benefits.

Using Special Needs Trusts and Other Legal Instruments

Special needs trusts are pivotal in protecting SSI benefits because they allow individuals to retain essential financial resources without surpassing SSI’s strict resource limits.

Trusts must be properly structured; they should be irrevocable and designed specifically so that the trust assets are not counted as current income or resources that could otherwise disqualify an individual from receiving SSI or SSDI benefits.

If considering a special needs trust, seeking a free consultation from a knowledgeable attorney can provide clarity and guidance.

Careful Planning of Settlement Proceeds Spending

After receiving settlement proceeds, SSDI beneficiaries must be meticulous in their spending to prevent a benefit offset.

SSI benefits have stringent income and resource limits; thus, sudden increases in assets could reduce or terminate benefits.

Strategic spending—such as using funds for non-countable resources or expenses that improve quality of life without affecting eligibility—can help maintain benefit levels.

Careful planning and perhaps legal advice are imperative for navigating these complex rules and retaining full benefits.

Frequently Asked Questions

  • How do I proceed after my initial SSDI claim is denied?

    After a denied SSDI claim, one must file a Request for Reconsideration within 60 days of the initial denial.

    This is the first step in the appeal process.

  • What steps should I take if my SSDI reconsideration appeal is unsuccessful?

    If the Request for Reconsideration is denied, the next step is to request a hearing before an Administrative Law Judge (ALJ).

    This request must be made within 60 days of the reconsideration denial, and the hearing date might be scheduled anywhere from a year to two years after the request.

  • Is there a limit to the number of times I can appeal a Social Security denial?

    There is no limit to the number of times one can appeal a Social Security denial.

    The appeals process includes several levels: reconsideration, ALJ hearing, Appeals Council review, and finally, a federal court case, if necessary.

  • How long should I expect to wait for a decision on a disability appeal with legal representation?

    The wait time for a decision on a disability appeal can vary, but the decision on Reconsideration typically occurs within 3-5 months of filing.

    Having legal representation might influence the efficiency of the process but does not guarantee a faster decision.

  • What are my odds of success in an SSDI reconsideration appeal?

    The odds of success can differ based on individual case merits and the presentation of evidence.

    Statistically, the likelihood of success at the reconsideration stage is lower than during a hearing before an ALJ.

  • What actions can I take to increase the likelihood of winning an SSI appeal?

    To improve the chances of winning an SSI appeal, one should gather comprehensive medical evidence, meet all deadlines for appeal submissions, and consider obtaining the assistance of a disability lawyer or advocate with expertise in navigating the SSDI appeals process.

Written By:
Jessie Paluch
Jessie Paluch

Experienced Attorney & Legal SaaS CEO

With over 25 years of legal experience, Jessie is an Illinois lawyer, a CPA, and a mother of three.  She spent the first decade of her career working as an international tax attorney at Deloitte.

In 2009, Jessie co-founded her own law firm with her husband – which has scaled to over 30 employees since its conception.

In 2016, Jessie founded TruLaw, which allows her to collaborate with attorneys and legal experts across the United States on a daily basis. This hypervaluable network of experts is what enables her to share reliable legal information with her readers!

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