Non Qualified Assignment vs Qualified Assignment

John Darer • April 2, 2018

Difference Between Structured Settlement Assignments

qualified assignment non qualifgied assignment

 

Both a non qualified assignment /  non-qualified structured settlement, and qualified assignments are forms of settlement used to resolve disputes, or claims for damages, with some portion of the damages paid in future periodic payments.


In each case, following the assignment, the assignment company replaces the Defendant or Defendant's Insurer as the future periodic payment obligor through a legal novation.

 
When is a Qualified Assignment Used with a Structured Settlement?

A qualified assignment is used to help resolve lawsuits and claims involving damages that fall within the meaning of IRC 104(a)(1) or IRC 104(a)(2), namely payment of damages for physical injury, physical sickness or wrongful death, or workers compensation.

 
When is a Non Qualified Assignment Used with a Structured Settlement?

A non qualified assignment is used to help resolve lawsuits and claims involving taxable damages,  There are many types of lawsuits where a non qualified assignment can be used. Some examples are claims or lawsuits which involve employment, sexual harassment. qui tam (whistle blower) intellectual property,  breach of contract. In addition non qualified assignments are used for structured installment sales, oil & gas lease bonuses, celebrity endorsement fees. Read more about non qualified assignments.

Note that damages for wrongful conviction or
wrongful imprisonment that qualify for a tax exemption under IRC 139F, must be assigned via a non qualified assignment, even though payments are not taxable. The reason is that the IRC 130 exemption governing qualified assignments does not include IRC 139F damages under permissible obligations to assign.


Last updated December 28, 2023

 

settling parties shaking hands at the end of the settlement negotiations
By John Darer September 22, 2025
John Darer reviews qualified assignment best practices. It starts with an understanding that a qualified assiignment is an "assignment of a liability to make periodic payment as damages" of the charactaer described in IRC 130(c) and IRC 104(a)(2) or IRC 104(a)(1)
Weiss Ratinggs  of structured settlement annuity issuers
By John Darer September 22, 2025
John Darer reviews Weiss ratings. Weiss ratings became the first insurance rating organization to issue independent financial strength ratings for life and health insurance companies.
By John Darer September 17, 2025
The Allure of "Convenience" is a Tax Trap . QSF Qualification is not a single moment in time, but rather a continuing obligation to operationalize all the requirements, as well as those required for creation.
qualifed assignment release and pledge agreement
By John Darer September 15, 2025
A Qualfied Assignment Release and Pledge Agreement (QARP) is a type of qualified assignment that gives a structured settlement payee a security interest in the qualified funding asset pursuant to the Uniform Commercial Code (UCC).
Indiiduals with Disabilities Education Act
By John Darer September 13, 2025
It bears remembering that, prior to 1975, children in the USA with intellectual disabilities, physical disabilities and even sensory disabilities were not guaranteed access to a public education.
structured settlement beneficiary
By John Darer CLU ChFC MSSC CeFT RSP CLTC September 12, 2025
"All payments From a Structured Settlement Are Guaranteed" ?
woman surprised when she discovers something
By John Darer September 6, 2025
Does a Structured Settlement Have a Free Look Period like Life insurance? The Shocking Misleading Answer Provided by AI.
qualified settleent fund and QSF
By John Darer September 3, 2025
Invalidation of Structured Settlement Arrangements Under IRC § 130. If the QSF loses its status due to revocation/ termination of the governmental authority’s continuing jurisdiction, any structured settlement arrangements pursuant to IRC § 130 become null and void.
most infomative structured settlement websites
By John Darer August 26, 2025
The 4structures.com website is one of the most comprehensive structured settlement resources, particularly for those who want detailed, expert-level information, according to Google AI
most informative
By John Darer August 22, 2025
Based on Grok's review of prominent sites as of August 2025, 4structures.com (including its associated blog at structuredsettlements.typepad.com) stands out as the most comprehensive. Run by structured settlement expert John Darer, it offers detailed guides, and specialized insights
More Posts