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Can You Collect Workers’ Compensation and Social Security Disability?

post-it notes illustrating work injury claimYou may be seeking Social Security Disability benefits after becoming disabled because of a work accident or work-related medical condition. If you are collecting workers’ compensation benefits, there is something you should know: these payments could cause your benefits to be reduced.

Below, learn more about how workers’ compensation and other sources of income may affect Social Security Disability benefits. If you have questions about your eligibility for benefits, Schmidt Kramer offers a free legal consultation, and there are no upfront fees if we take your case.

Call today to set up a free consultation with one of our licensed Harrisburg-based Social Security Disability lawyers.

How Workers’ Comp Affects Disability Benefits

While private pensions, insurance benefits and personal injury settlements do not affect the amount of disability benefits you receive, workers’ compensation benefits might. The same can be said of public disability benefits, such as those paid by state and local governments and civil service disability benefits.

If you are receiving workers’ compensation, the rule is the total amount you receive in workers’ comp and Social Security Disability (SSD) benefits cannot exceed 80 percent of your average current earnings before you were declared disabled.

What Happens if I am Over 80 Percent?

Your Social Security Disability benefits will be reduced to compensate and get you back to 80 percent. If 80 percent of your pre-disability earnings is $2,000, and you are earning $2,500 between disability payments and workers’ comp benefits, your SSD benefits would be reduced by $500.

Make sure to inform the Social Security Administration as soon as workers’ comp payments stop. That way your benefits can be increased. You should also inform the SSA of any increase in workers’ comp benefits – if you receive more than you are eligible for, the SSA will want its money back.

How Does the SSA Calculate Average Current Earnings?

The SSA uses the highest number of the following three as your average current earnings:

  • The amount the SSA used when calculating your benefit amount
  • Average monthly earnings from five consecutive years you earned the most in your career
  • Average monthly earnings from one year, either the year your disability started or one of the five years before that (this is usually the number the SSA uses for your average current earnings)

What Happens When I Hit Retirement?

Social Security Disability benefits will be reduced by workers’ comp and other public disability benefits until you reach your full retirement age. (The law changed, and this system has been in place since Dec. 19, 2015. Prior to that, benefits were reduced until the recipient hit 65 years of age.

What About a Lump Sum Workers’ Comp Payment?

Many workers’ comp claims are resolved through a lump sum settlement. It is important to note this may also affect the amount you receive in disability benefits.

The SSA will convert the lump sum into a monthly amount by dividing it by the payment amount the worker was receiving before the settlement was reached. The result of this equation determines how many months the SSA will reduce your monthly disability benefits.

Can Workers’ Comp Settlements be Structured to Minimize the Offset?

It may be possible to structure a workers’ comp settlement a certain way to minimize the offset. For example, the settlement could say you were meant to receive just $50 per week for a certain number of months. This could help you avoid an offset altogether or result in a small reduction in your month Social Security Disability benefits.

Your lawyer could also exclude medical and legal expenses from the settlement, which means the SSA will exclude those expenses when calculating the offset.

Need Help Applying for Benefits? Call Today

It can be difficult to obtain federal disability benefits, even if it seems like you should easily qualify for the Social Security Disability program. That is why you should strongly consider meeting with a licensed attorney to discuss your application, even if you have already been denied.

We are ready to assist you with every step in the process. Read some of our client testimonials from some of the many people we have helped obtain benefits.

Call Schmidt Kramer today to schedule a free legal consultation. (717) 888-8888