For many plaintiffs, government benefits like SSI, SSDI, Medicaid, Medicare, SNAP, or housing assistance are essential lifelines. When an injury prevents you from working, these programs help cover medical costs, daily living expenses, and disability support.

But when you’re considering pre-settlement funding, a common and important question arises:

Will receiving pre-settlement funding affect my government benefits?

The reassuring answer is: In most cases, pre-settlement funding does not count as income and does not impact government benefits.
Here’s what you need to know.

Understanding How Benefits Work

Before we examine how funding interacts with benefits, here’s a quick overview:

SSDI (Social Security Disability Insurance)

• Based on work history and past earnings

• Not income-sensitive

• Benefits typically not affected by legal funding

SSI (Supplemental Security Income)

• Income- and asset-based

• More sensitive to financial changes

• Requires more careful planning

Medicaid and SNAP

• Need-based programs

• Evaluate household income and resources

• May consider certain cash deposits as income

Because these programs differ in how they define “income,” it’s important to understand how legal funding is classified.

Pre-Settlement Funding Is Not Income

This is the key point:

Pre-settlement funding is NOT income. It is NOT wages. It is NOT a loan. It is NOT a gift.

It is a non-recourse advance on your future settlement.
Because it must be repaid from your settlement (if you win) and is not guaranteed money, it does not count as taxable income or earned income.

This means:

• It generally does not affect SSDI

• It does not count as income for tax purposes

• It does not affect programs that only count earned income

When You Might Need to Be Careful (SSI & Medicaid)

Although funding itself is not income, certain programs—especially SSI and Medicaid—evaluate:

• Assets

• Cash on hand

• Bank account balances

So the risk is not the funding itself—
it’s how the deposited money is treated by your benefit program if it increases your account balance above the allowed limit.

Examples:

• SSI beneficiaries must generally keep assets under $2,000

• Medicaid eligibility may be affected by cash assets

• A large deposit might temporarily raise red flags

This does not mean you cannot receive funding; it simply means you must plan how to use it responsibly.

How to Protect Your Benefits When Receiving Funding

Here are best practices for plaintiffs on need-based programs:

1. Talk to your attorney before accepting funding

Your attorney understands both your case value and your benefit structure.

2. Use the funding for immediate, approved expenses

Most clients use funding for:

• Rent/mortgage

• Utilities

• Medical costs

• Food and transportation

• Household needs

Reducing your bank balance quickly (and responsibly) helps maintain eligibility.

3. Keep documentation of how the funds were used

Funding used for essential living expenses is less likely to be questioned.

4. Avoid large cash accumulation

Use the money for necessary expenses instead of letting it sit unused.

5. Ask Instabridge for smaller, incremental advances if needed

This keeps your asset level stable while still supporting your needs.

Why Funding Usually Does Not Impact Benefits

Because pre-settlement funding is:

• Not income

• Not taxable

• Not wages

• Not guaranteed

• Tied to a lawsuit outcome

…it is typically not counted when agencies evaluate your monthly benefits.

Instabridge works with your attorney to make sure your advance is structured responsibly and does NOT jeopardize your essential support programs.

Why Plaintiffs Trust Instabridge

Instabridge is committed to protecting your stability—not just providing funding. We offer:

• Clear explanations of how funding interacts with your benefits

• Smaller, flexible advances to avoid exceeding asset limits

• Fast approvals (24–48 hours)

• Flat-rate, transparent terms

• Non-recourse protection—you owe nothing if you don't win

• Attorney collaboration to ensure everything stays compliant

Our goal is to support your financial relief without risking the support programs you rely on.

Conclusion: Pre-Settlement Funding Rarely Affects Benefits—But Planning Matters

Pre-settlement funding is one of the safest ways to access money during a lawsuit because it is not income and typically does not affect SSI, SSDI, Medicaid, or other government programs.

With the right planning and guidance, you can receive the support you need today while protecting the benefits you depend on.

If you’re receiving government assistance and need help navigating pre-settlement funding, contact Instabridge. We’ll review your situation, work with your attorney, and help you secure funding safely and responsibly.