Will a Structured Settlement Affect AISH Eligibility in Alberta?

If you or a loved one has suffered a serious injury in Alberta and are receiving or applying for Assured Income for the Severely Handicapped (AISH), you may be concerned about how a personal injury settlement could impact your benefits. This is a critical question for many Albertans who rely on AISH for financial and medical support.

It is normal to feel overwhelmed or unsure of what steps to take as you try to navigate these life-altering events caused by someone else’s negligence or ill-will.  At KMSC Law, we strive to provide clear and compassionate guidance so you can focus on your recovery while we assist you in navigating the complexities of your personal injury claim.

 

What Is AISH and Who Qualifies?

The AISH program provides financial and health benefits to adult Albertans with a permanent medical condition that severely limits their ability to earn a living. To qualify, applicants must meet strict medical, financial, and residency criteria. AISH’s financial criteria considers an applicant’s income and assets.

AISH considers most types of income when calculating eligibility, including:

• Employment income
• Investment income
• Pension payments

However, some types of income are exempt, either fully or partially. Generally, the rule of thumb is that any income included on an annual tax report is what AISH will consider to be “income”. Personal injury settlements are tax-free which means that they should not impact the income portion of AISH’s financial eligibility.

AISH also looks at your total assets including all bank accounts, investment accounts, and pensions.  There are various exempt assets that will not impact your AISH eligibility, including:

• Your primary home
• One vehicle
• Most household items

Under the current threshold, you can have up to $100,000 in non-exempt assets and still qualify.

 

How Personal Injury Settlements Can Affect AISH

When someone receives a lump-sum settlement from a personal injury lawsuit, AISH may treat that money as an asset. If your total assets exceed the allowable limit (currently $100,000 for a single person), you may lose your AISH benefits. This is where structured settlements come in.

 

What Is a Structured Settlement?

A structured settlement is a financial arrangement where the compensation from a lawsuit is paid out in regular, scheduled payments over time, rather than as a single lump sum.

These payments can be:

• Monthly
• Annually
• Or tailored to specific life events (e.g., education, medical needs)

Structured settlements are commonly used in catastrophic injury cases to ensure long-term financial security.

 

Do Structured Settlements Affect AISH?

Because they are not subject to tax, structured settlement payments from a personal injury lawsuit are generally not considered income for AISH purposes. In many cases, monthly payments from a structured settlement do not count toward income calculations, which means they should not reduce or impact AISH benefits. This makes structured settlements a potentially effective option for preserving eligibility while still receiving compensation from a personal injury claim.

 

Why Structured Settlements May Be the Right Choice

Here’s why a structured settlement may be the best option for injured Albertans receiving AISH:

1. Protects AISH Eligibility

Because structured payments may not be counted as income or assets, they can help you stay within AISH’s financial limits and therefore help you avoid penalties.

2. Provides Long-Term Financial Security

Structured settlements ensure a steady stream of income over time, which can be especially important for individuals with long-term care needs.

3. Customizable to Your Needs

Payments can be tailored to your specific situation, accounting for your monthly living expenses, future medical costs, or even education for your children.

4. Avoids Asset Thresholds

Since the annuity is typically owned by a third party (not the recipient), it may not count toward your $100,000 asset limit.

 

Important Legal Considerations

While structured settlements offer many benefits, they must be carefully structured to comply with AISH rules. That’s why It’s important to involve a lawyer early in the settlement process. Once a lump sum is paid, it may be too late to restructure it in a way that protects your AISH eligibility. At KMSC, our experienced team of injury lawyers will work diligently to ensure the settlement is designed to meet both your immediate and long-term needs.

Additionally, we can help you communicate with AISH and provide the necessary documentation to confirm that your structured settlement complies with their policies.

 

Real-Life Example

Imagine a 35-year-old Albertan who suffers a traumatic brain injury in a car accident. They receive a $500,000 settlement. If they take it as a lump sum, they risk losing AISH. But if the settlement is structured into monthly payments of $2,000, and the annuity is held by a third party, those payments may not count as income, preserving their AISH benefits while still providing financial support.

 

Final Thoughts

If you or a loved one is receiving AISH and pursuing a personal injury claim, it’s essential to understand how your settlement will affect your benefits. A structured settlement can be a powerful tool to protect your eligibility and provide long-term financial stability.

 

KMSC’s Injury Law Team Helps Protect What Matters Most

At KMSC Law, we understand how vital programs like AISH are for Albertans living with serious injuries or disabilities. Our Injury Law Team has helped countless clients across Northern Alberta secure fair compensation without jeopardizing their AISH eligibility. We work closely with financial professionals to structure settlements that protect your benefits, preserve your independence, and support your recovery.

Contact us today for a free, no-obligation consultation — we work on a no-win, no-fee basis.