Introduction: SSA’s Expanding Role in the Settlement Planning Landscape
The recently enacted One Big Beautiful Bill (OBBB) has drawn national attention for its sweeping changes to federal programs like Medicaid, Social Security, and ABLE accounts. As discussed in our companion article How the One Big Beautiful Bill Impacts Settlement Planning for Plaintiffs, these legislative developments reshape the benefit landscape for personal injury claimants, and by extension, the professionals who serve them.
Yet beyond the OBBB, the Social Security Administration (SSA) is undergoing its own profound transformation in 2025. This transformation is not legislative but administrative: a quiet but far-reaching shift in how the agency operates, verifies identity, processes payments, coordinates benefits, and manages eligibility. These changes carry significant implications for structured settlement professionals, settlement planners, and plaintiff attorneys whose clients often rely on SSA-administered benefits like Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
At the same time, longer-term fiscal pressures cast a shadow over SSA’s future. According to the latest report from the Trustees of the Social Security and Medicare trust funds, the SSDI Trust Fund is projected to be exhausted by 2033, with the Old Age and Survivors Insurance (OASI) Trust Fund not far behind. Absent Congressional action, beneficiaries could face reductions of up to 23% as early as 2034. While these projections are well known in policy circles, they remain under appreciated within the settlement planning community.
This confluence of administrative reform and fiscal uncertainty calls for a renewed strategic focus. Effective settlement planning today must go beyond traditional tax and annuity design. It must anticipate benefit eligibility issues, respond to evolving agency procedures, and align with clients’ long-term access to essential programs. In particular, professionals must understand how SSA’s operational rules, most notably those contained in the Program Operations Manual System (POMS), affect structured settlement arrangements, Special Needs Trusts, and ABLE accounts.
This article highlights five key SSA administrative reforms that structured settlement professionals must track in 2025. It also offers practical guidance on navigating these changes within the broader context of public benefit preservation. Together, these developments underscore the increasing importance of post-settlement service, interdisciplinary collaboration, and ongoing professional education as pillars of effective client advocacy.
II. SSA: A Brief Institutional Overview
The SSA was created under the Social Security Act of 1935 and has evolved into an independent federal agency with broad responsibilities extending beyond retirement benefits. Today, it oversees programs including SSDI and SSI, processes more than $1 trillion in benefits annually, and serves tens of millions of Americans through a decentralized system of over 1,200 field offices, teleservice centers, and regional hubs.
The agency also plays a vital role in benefit coordination, especially for individuals with disabilities. Beyond benefit payment administration, SSA defines “disability” for federal programs, regulates compliance for Special Needs Trusts (in coordination with CMS), and indirectly influences how ABLE accounts interact with structured settlements.
Importantly, SSA’s internal guidance system, the Program Operations Manual System (POMS), governs how SSA staff evaluate trust arrangements, count income and resources, and determine eligibility for SSI. While POMS does not carry the force of law or formal regulation, courts often give it deference, and it effectively functions as the operative policy manual for benefit administration. Structured settlement professionals and attorneys must be aware of POMS provisions governing irrevocable assignments and resource counting to ensure that structured settlements do not jeopardize clients’ benefits.
Notably, SSA defines “income” differently than the Internal Revenue Code. This divergence can create unexpected eligibility issues if not carefully planned for. Structured settlement payments that are excluded from gross income under IRC §104(a)(1) or (2) may still be treated as income under SSA rules for purposes of SSI eligibility. This divergence highlights the need for careful planning, especially when integrating structured settlements with needs-based programs.
SSA policy and administration continue to evolve, and its institutional decisions have increasingly significant implications for settlement planners. As the agency modernizes and adapts to demographic and technological pressures, understanding the SSA’s broader operational and regulatory environment has become a prerequisite for effective and compliant settlement design.
III. 2025 Administrative Reforms: Key Changes Settlement Planners Must Track
In traditional practice, most structured settlement professionals, settlement planners, and plaintiff attorneys conclude their services once the settlement documents are signed and their compensation is secured. However, the reforms discussed in this section highlight the increasing importance of post-settlement services, particularly for claimants who depend on Social Security benefits. Understanding these administrative changes is essential for delivering comprehensive settlement planning.
Whether the services described herein fall within a planner’s scope depends on the terms of the client relationship. Nonetheless, knowledge of these issues enhances a planner’s ability to properly advise clients, avoid unintended benefit disruptions, and maintain professional competency. As recognized in the Society of Settlement Planners’ Practice Standards, particularly Standards 2 (Client Understanding and Engagement) and 10 (Continuing Obligation to the Client), these reforms underscore the evolving best practices for client-centered, long-term planning. (See SSP Practice Standards).
Below are five reforms that settlement professionals should track closely in 2025.
A. Stricter Identity Verification.
Beginning April 14, 2025, the SSA implemented a more rigorous identity verification protocol for applicants seeking retirement, survivor, and auxiliary benefits. Individuals who cannot verify their identity online through the “my Social Security” portal must now appear in person at a local SSA office to complete the process. Although SSDI and SSI applicants are exempt from this requirement, the change reflects SSA’s broader push to tighten identity controls and reduce fraud across all programs. This policy shift signals heightened scrutiny that may affect future benefit access procedures, even for currently exempt populations.
For settlement professionals, this change carries substantial implications. Elderly or disabled claimants, or those living in rural areas, may face significant logistical hurdles. Missed appointments, transportation issues, and other barriers can delay benefit initiation or resumption. Settlement professionals should proactively assist clients in setting up their “my SSA” accounts, and when necessary, help arrange transportation or legal representation for in-person verification.
B. One-Day Direct Deposit Updates.
Previously, SSA took up to 30 days to update a beneficiary’s direct deposit information. As of March 31, 2025, that timeline was to be compressed to one business day. For claimants receiving structured settlements through periodic payments, this change substantially reduces the risk of missed payments due to banking transitions.
Settlement planners should incorporate this update into their intake and follow-up practices. Whenever a structured settlement recipient opens or closes an account, settlement planners should ensure that SSA is notified promptly. This faster processing time can reduce client stress and support better long-term financial planning.
C. Increased Overpayment Recovery Withholding.
In one of the more controversial changes, SSA increased the default withholding rate for new SSDI and retirement overpayments from 10% to 50% of a claimant’s monthly benefit. While the 10% rate still applies to SSI recipients, this new default can pose a significant financial hardship for others.
Overpayments often arise due to errors in income reporting, delayed processing, or improper coordination between SSA and other benefit sources. Settlement planners must now monitor these issues more carefully and educate clients on their rights to request waivers, modifications, or appeals. A claimant facing a 50% reduction in monthly benefits may struggle to meet basic needs. By coordinating with special needs attorneys or benefits advocates, planners can mitigate this risk.
D. Field Office Consolidations and Staffing Cuts.
Under prior Acting Commissioner Leland Dudek, SSA began implementing a reorganization plan aimed at consolidating services and improving efficiency. However, this plan involves closing approximately 47 field offices and reducing frontline staff. While intended to reduce operational costs, the reorganization may lead to longer wait times, limited appointment availability, and inconsistent service delivery.
For settlement planning professionals, this means more of their clients will need to rely on SSA’s digital infrastructure, including online applications and virtual hearings. Settlement professionals should be prepared to support claimants in navigating these systems. Planners should also consider cultivating working relationships with SSA personnel in remaining offices to improve communication and responsiveness.
E. Technology Modernization and Data Integrity Issues.
The SSA continues to transition its aging IT infrastructure, much of which is still based on COBOL-era systems—to more modern platforms. Although this upgrade is long overdue, it has introduced new challenges. In early 2025, isolated issues involving record duplication, erroneous denials, and delayed benefit adjustments were reported.
Settlement planners should take nothing for granted when it comes to SSA records. Claimants should regularly request benefit verification letters, earnings statements, and other documentation to confirm accuracy. When funding a structured settlement, ensure the benefit interaction analysis includes the possibility of SSA error and outlines corrective action plans. Inaccurate data can affect benefit eligibility, trust disbursements, and even tax reporting. As SSA completes this modernization effort, planners should expect both ongoing disruptions and long-term improvements in processing speed and data accuracy.
IV. Practice Tips: Navigating SSA Changes in Settlement Planning
Timing matters: These action items apply at different stages of the settlement process, some during initial onboarding, others during post-settlement follow-up, and many as part of ongoing benefit monitoring. Settlement professionals should adapt their practices based on the scope and duration of their client engagement.
1. Leverage Digital Tools.
Proactively Encourage all eligible clients to establish and maintain a “my Social Security” account. These online accounts provide faster access to benefits data, allow clients to verify eligibility status, and reduce dependency on in-person SSA services, which may become less accessible due to field office closures. Settlement planners should incorporate digital account setup into their standard client onboarding and exit protocols.
2. Verify and Document All Communications.
SSA’s ongoing IT modernization has created temporary data integrity challenges. Structured settlement planners should assume the possibility of inaccurate or outdated records. Advise clients to request and retain benefit verification letters, earnings statements, and payment histories. Planners should document all SSA communications and maintain copies of filings, notices, and correspondence for future reference.
3. Prepare Clients for In-Person Identity Verification.
Although SSI and SSDI claimants are exempt from the new in-person verification rule, other beneficiaries (e.g., survivors or retirement claimants) may now face this requirement. Settlement planners should alert clients early, help them understand what documentation is required, and, where needed, coordinate transportation or legal accompaniment, especially for vulnerable or rural claimants.
4. Coordinate With Trustees, Advocates, and Fiduciaries.
Structured settlements intersect with public benefits planning. Proactively engage trustees of Special Needs Trusts (SNTs), pooled trusts, and ABLE account custodians to ensure that benefit eligibility is preserved. Collaboration with public benefits attorneys or advocates can help navigate overpayment disputes, clarify income/resource classification, and secure SSA waivers or appeals when necessary.
5. Address Overpayments Before They Escalate.
SSA’s increased default withholding rate (from 10% to 50% for SSDI/retirement) poses significant hardship risks. Upon receiving any SSA notice of overpayment, planners should act quickly to review the facts, request reconsideration or a waiver, and, where justified, assist in adjusting structured payment flows. Educating clients in advance about these rights can reduce panic and protect benefit continuity.
V. Conclusion: Planning Amidst Administrative Change
SSA’s 2025 administrative reforms represent more than incremental adjustments, they signal a broader institutional shift toward digitization, fraud prevention, and cost containment. While the structured settlement framework and its tax protections under IRC §§104(a)(1), 104(a)(2), and 130 remain essential, settlement planners must now navigate a growing array of administrative procedures that directly affect client outcomes.
Historically, structured settlements were valued primarily for their tax advantages. Today, however, the stakes are often far greater. For many claimants, especially those dependent on SSI, SSDI, or Medicaid, continued access to public benefits determines their housing, medical care, and day-to-day survival. Losing a tax benefit is costly. Losing essential benefits can be life-altering. Settlement planning must now integrate tax efficiency with benefit preservation, recognizing both as foundational to long-term client security.
This shift, from tax optimization to full-spectrum benefit coordination, demands deeper post-settlement engagement. Structured settlement professionals and plaintiff attorneys must expand their expertise to include SSA operations, eligibility rules, and administrative compliance. They must also collaborate closely with public benefits attorneys, fiduciaries, and government agencies. The objective is not only financial security, but also functional independence and dignity for injured claimants.
Meeting this challenge requires a renewed commitment to professional education. Certification programs, continuing education providers, and industry associations must prioritize SSA fluency as a core competency. In a benefits landscape defined by procedural complexity and systemic risk, mastery of annuity design and tax deferral alone is no longer enough. Today’s settlement professionals must be capable benefit navigators, equipped to protect eligibility, respond to regulatory changes, and guide clients through a lifetime of evolving needs.
Only through deeper education, technological adaptation, and interdisciplinary collaboration can the settlement planning profession fulfill its promise, not merely as a provider of financial solutions, but as a steward of long-term well-being for society’s most vulnerable claimants. As SSA itself embraces digital transformation, our industry must likewise innovate—by modernizing client engagement tools, improving data integration, and aligning our processes with the evolving expectations of both government agencies and the clients we serve.
Independent Life Insurance Company does not provide tax, legal, or financial advice. The information contained herein is for general informational and educational purposes only and is not intended to serve as a substitute for personalized advice from qualified professionals. Attorneys considering deferring their fees must rely on their own independent legal, tax, and financial advisors to evaluate the potential benefits, risks, and consequences of any transaction.
