Social Security Disability and Workers' Compensation

June 17,2008
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Many people receive both Social Security Disability and Workers’ Compensation benefits. Although we see it far less often than we used to, there are still people who believe they can’t receive both, and delay applying for SSD until they settle their Workers’ Comp claim. I interviewed a new client recently who told me that his Personal Injury lawyer told him to delay applying!! (I think he was probably worried about a lien on the Personal Injury case, another widely held piece of misinformation.)

When you receive benefits from both sources there is a limit on the total benefit amount, however. The total of your Workers’ Compensation and SSD benefits can’t go over 80% of your best calendar year’s earnings, if that was within the last five years of work. (If your best earnings were before five years from the onset of disability, the 80% amount is calculated differently.)

If the total is greater than this 80% figure, Social Security will first reduce auxiliary benefits (for minor children), if any, and then the primary benefit amount in most states. In some states, called reverse offset states, Workers’ Comp benefits are reduced while full Social Security is paid. Whenever there is an offset, any COLA (Cost of Living Adjustment) will still be paid, however.

There are two other scenarios that occur frequently with Workers’ Comp offsets. If a Workers’ Comp case is settled with a lump sum paid out, Social Security will allocate the settlement over the weekly amount that is indicated or was being paid previously, and thus any offset will continue for the number of weeks the settlement represents. After that time there will no longer be an offset.

The other common scenario is that Workers’ Comp stops when a personal injury case is settled. In many cases the Workers’ Comp carrier is paid back from the settlement. To the extent that the lien is repaid, Social Security considers that amount of Workers’ Comp as if it were never paid to begin with and any offset that might have been taken will be sent as a lump sum to the claimant.
The important points to remember from this are:

  • Don’t wait to file your Social Security claim when you are receiving Workers’ Comp
  • When you do file, remember to check out your benefit estimate and earnings record together with your Workers’ Comp benefits to see if an offset will apply.

For more information on receiving other benefits at the same time as Social Security disability, visit the FAQ page of our website.

Lewis B. Insler, Esq.