If you are expecting money from an accident or illness and you need TAFDC because of that accident or illness, you have to assign your right to the money to DTA. This includes money from a lawsuit or Workers’ Compensation. DTA can reimburse itself from the accident or illness money for the TAFDC you needed because of the accident or illness. 106 C.M.R. § 702.800. The assignment form also covers money you may get for medical expenses.
If you are receiving TAFDC, DTA will apply the lump sum rule to the balance of money that you get from settlement or Workers' Compensation award. See Lump-sum Income through What happens if you run out of money before the lump sum time is up?. If you are not receiving TAFDC and you apply for benefits after you get the money, DTA may apply the transfer of assets rule. See How does DTA treat assets you no longer have?
If child support has been paid to the state for the time period covered by the assignment, DTA should not reimburse itself again for TAFDC benefits that were paid back through child support payments. Similarly, DTA should not reimburse itself for TAFDC benefits you repaid to DTA after DTA said you were overpaid. Be sure to tell your lawyer about any payments that reduce DTA’s claim before the lawyer turns any money from the lawsuit over to DTA.
The 2014 law discussed in What if you want to try and save money? may provide a way for you to save some of the money.