How Worker’s Compensation Affects Disability Benefits
If you have a work-related illness or injury, you may be entitled to both workers’ compensation and disability benefits. However, in cases such as this, you will not be entitled to the full amount of your disability benefit. In most cases, the amount of your disability payments will be reduced so you can receive a maximum of 80% of the amount you were being paid when you were fully employed. The process of applying this reduction is known as “offset”. Here is some important information you need to know about offset and how it is determined.
How is Offset Calculated?
First, the Social Security Administration (SSA) must determine your applicable limit, which is the maximum benefit amount the federal government allows you to receive. If your workers’ compensation and disability benefits combine to be more than that amount, the SSA must bring your benefits down to meet the applicable limit.
Your applicable limit is the higher of these two amounts:
(1) 80% of your income before your injury occurred (average current earnings)
(2) The total SSDI received by all of your family members over the first month that workers’ comp payments were received (total family benefit).
“Reverse Offset” occurs when the state in which you live offsets workers’ compensation benefits to account for the receipt of SSDI benefits. If the state is already offsetting workers’ comp payments, they will not offset SSDI payments as well.
Lump Sum Workers’ Compensation Benefits
Some workers’ compensation claims are settled with lump sum payments. When this happens, the SSA will account for the one-lump payment. They do this by converting the entire amount into monthly payment amounts and then applying that amount to the remaining SSDI payments.
Minimizing Your Offset Amount
The best way to minimize your offset amount is to work with an experienced disability attorney. Your lawyer can go over the language in your workers’ compensation settlement to find ways to minimize your offset. A lawyer can also create a settlement that excludes your legal and medical fees from the lump sum so you they are not calculated when determining your offset amount.Contact London Eligibility today if you have questions regarding how workers’ compensation benefits can affect your Social Security disability payments.