If you were injured at work, and as a result are unable to work, you may find yourself in the position of qualifying for both Social Security Disability Insurance and Workers’ Compensation.
Social Security Disability Insurance (“SSDI”) is a program for those with qualifying disabilities who have paid into Social Security while working.
Workers’ Compensation (“BWC”) benefits are only paid for work-related injuries. BWC benefits may include your medical expenses and lost wages after an on-the-job injury, and a lump sum permanent partial disability.
SSDI will consider you disabled if your disability is expected to last at least a period of 12 or more months. SSDI does not necessarily care how you were injured or became disabled.
You can potentially qualify for both SSDI and BWC. However, there will be an offset for benefits if benefits are paid during the same period of time. The reduction of your Social Security benefit continues until you reach your full retirement under Social Security or the month your BWC stops.
When you qualify for more than one program, you will be faced with the offset rule. A simple definition is that SSDI benefits are reduced when receiving workers’ compensation.
When SSDI was first instituted in 1956, the offset rule was used to prevent workers from collecting benefits from multiple programs. This rule was eliminated in 1958, but reinstated in 1965. The 1965 Social Security Amendments required that SSDI be reduced when the worker is eligible to collect both workers’ compensation and SSDI.
When you are injured at work, it may be natural to think you will get both BWC benefits and SSDI benefits. But, it can be difficult for many who are eligible for both Social Security Disability Insurance and Worker’s Compensation to understand how benefits impact each other.
The offset rule is there to ensure that no one can reap a windfall from a disability. You are limited to claiming 80% of your lost income from combined benefits. For example, using easy numbers to understand, if your income was $10,000 a month, your total compensation from every program you receive compensation for after your disability cannot exceed $8,000 a month. If your workers’ compensation pays out at 60% of your income ($6,000), and you qualify for $3,000 in SSDI, SSDI will reduce that amount to $2,000, because combined benefits from worker’s compensation and SSDI cannot exceed 80% of your average current earnings.
The next thing you will need to understand is how your average current earnings are calculated. There are three methods of calculating the average current earnings:
No matter what, the offset rule will not allow your combined benefits to dip below the amount you qualify for under SSDI.
In the period between 1965 and 1981, there was a reverse offset provision in certain states, where worker’s compensation is reduced instead of SSDI benefits, which ensured that a worker’s spouse or children would not be impacted. Sixteen states as well as Puerto Rico have reverse offset statutes in place. However, during the 1981 Omnibus Budget Reconciliation Act, Social Security benefits were looked at closely and the option for additional states to put statues into place for reverse offsets was eliminated, which limited new states from adopting reverse offsets and extended the offset to other public disability benefits as well as workers’ compensation.
While many benefit programs are subject to the offset rule and can cause your SSDI benefits to be reduced, there are benefits from certain programs that are exempt from the offset provision. These include:
There may be special consideration for lump-sum workers’ compensation settlements. If you receive a lump sum BWC payout to compensate for medical expenses and lost wages, medical and legal expenses are excluded from the calculation. If worded properly in a settlement release, then the lump sum workers’ compensation will be considered as if it had been a monthly payment. Be sure to discuss with your BWC attorney the wording in any lump sum settlement agreements.
If you have a work-related injury that has resulted in a permanent disability that has left you unable to work, you may need to file for Social Security Disability.
Typically, if an employee is off of work for a period of six months, they should consider seeking a consultation of if and when to file for SSDI.
Speaking with an attorney may help you understand how to move forward in applying for programs you are eligible for and understanding any offsets.
If you have a work-related injury, we recommend you:
The process is complicated, but you may qualify for both workers’ compensation benefits and SSDI with a work-related disability. It may be hard to know what exactly you need to do which is why you need the help of an experienced attorney.
Arthur Law Firm understands all the nuances of the process and can help guide you through the process. We offer free consultations for SSDI and can help you get the benefits you need to protect your future. Call us now (419) 782-9881.