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Snyder: Public Benefit Rules Have Changed, but It Might Not Make a Difference

  • State: California
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In July 2022, I alerted readers about a new Medi-Cal eligibility law, California Welfare and Institutions Code §14005.62, which removed the asset limit test. As of Jan. 1, 2024, there is no asset limit.

Teddy Snyder

Teddy Snyder

That means a settling claimant can use proceeds to buy a house in his/her own name. He or she can have a bank account with more than the previously limited amount. Easy-peasy, right?

Not quite.

What about income?

A settling claimant also needs income. Some seriously injured claimants will not be able to return to the workforce. That means the funds need to be scrupulously managed (something most claimants are unable to do) and may still be inadequate to provide lifetime support.

Won’t the settlement funds throw off income? Yes. And there’s the rub: To qualify for Medi-Cal, a potential beneficiary’s household annual income must be less than 138% of the federal poverty level. In 2024 that’s $20,783 for a single person and $43,056 for a family of four. If the settlement pot is large enough to create a comfortable lifetime income, it could result in a loss of Medi-Cal benefits under the income rather than the asset test.

What’s the bottom line?

Just as in the past, parties cannot ignore how a settlement might negatively impact the claimant’s access to public benefits. For a settlement that provides the optimal benefit with the available settlement dollars, choose a mediator familiar with these issues. 

Attorney Teddy Snyder mediates workers' compensation cases throughout California. She can be contacted through snydermediations.com.

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