If a work injury has kept you off the job for months, you may be wondering whether you can apply for Social Security Disability Insurance (SSDI) while you are still getting workers’ compensation checks. The short answer is yes. Many injured workers receive both. However, your SSDI payment may be reduced while your workers’ compensation benefits continue, and a settlement can affect how long that reduction lasts.
Mark Hurt Law Firm helps injured workers and Social Security Disability applicants throughout Southwest Virginia, East Tennessee, and West Virginia understand how these two programs work together.
Workers’ compensation and SSDI are separate systems. Each has its own eligibility rules.
Workers’ compensation. This is a state program that generally covers medical treatment and wage-loss benefits for injuries or illnesses that happen because of your job. In Virginia, claims are handled through the Virginia Workers’ Compensation Commission. You do not have to prove your employer was at fault.
Social Security Disability Insurance. SSDI is a federal program run by the Social Security Administration (SSA). It does not matter whether your condition is work-related. To qualify, you generally must have enough work credits and a medical condition that keeps you from doing substantial work. That condition must be expected to last at least 12 months or result in death.
Because the rules are different, you could qualify for one program and not the other. You may also qualify for both at the same time, depending on the facts.
Federal law limits how much you can receive from SSDI and workers’ compensation combined. When your total benefits go over that limit, SSA may reduce your SSDI. This reduction is called an “offset.”
SSA compares your combined monthly benefits with 80 percent of your “average current earnings” from before you became disabled. If your combined benefits are higher than that amount, SSA may reduce your SSDI by the difference. SSA uses whichever of several earnings calculations gives you the highest figure, often based on your highest-earning years.
Here is a hypothetical example. Say your average current earnings were $4,000 per month. Eighty percent of that is $3,200.
Because $3,800 is $600 over the $3,200 limit, SSA may reduce your SSDI to $1,200. Your workers’ compensation check would generally stay the same. Real calculations can be more complex, especially when family members also receive benefits on your record.
Your SSDI and workers’ compensation claims do not have to involve the same injury or illness for the offset to apply. If you receive both benefits during the same months, SSA may still reduce your SSDI.
A small number of states have “reverse offset” laws, which reduce workers’ compensation instead of SSDI. Virginia, Tennessee, and West Virginia are not on SSA’s list of recognized reverse offset states. In these states, SSA generally applies any reduction to your SSDI.
Not every dollar is counted. Medical and legal expenses connected to your workers’ compensation claim may be excluded when SSA figures the offset. That can include attorney fees and certain medical costs. Disability payments from private sources, such as a private disability insurance policy, generally do not reduce SSDI.
Keeping records of these expenses may help make sure the offset is calculated correctly.
Many workers’ compensation cases end with a lump-sum settlement. Some people assume a settlement avoids the offset. It generally does not.
When you settle, SSA spreads the lump sum over a period of time. This is called “proration.” SSA then treats the settlement as if it were monthly payments and may apply the offset for that period. The rate SSA uses can depend on the settlement documents, the weekly rate you received before settling, or other factors.
Settlement wording can matter. SSA may consider how the settlement agreement allocates the money. However, SSA may reject terms it finds unreasonable or designed only to avoid the offset. In Virginia, workers’ compensation settlements generally must be approved by the Commission. Settlements may also need to account for Medicare’s interests in some cases.
Talking with a Virginia workers’ compensation attorney before you sign settlement paperwork may help you understand how the agreement could affect your SSDI benefits.
The workers’ compensation offset does not last forever. It generally ends when any of the following happens:
At full retirement age, SSDI converts to retirement benefits, and the offset generally no longer applies.
You are responsible for telling SSA about your workers’ compensation benefits. That includes when benefits start, when the amount changes, when payments stop, and when you settle your claim.
Failing to report changes can lead to an overpayment, and SSA may ask you to pay that money back. Keep copies of award orders, payment records, settlement documents, and receipts for medical and legal expenses. If your benefits change because you return to work after a doctor’s release, that change may need to be reported too. If you have questions about what to report, you may want to speak with an attorney or contact SSA directly.
Supplemental Security Income (SSI) is a different Social Security program. It is need-based and has its own rules. For SSI, workers’ compensation counts as unearned income. After a small $20 monthly exclusion, it generally reduces your SSI payment dollar for dollar. A lump-sum settlement may also affect SSI eligibility because SSI has limits on the resources you can have.
“You can’t receive both at the same time.” You can, although your SSDI may be reduced while you receive workers’ compensation.
“A settlement makes the offset go away.” A lump-sum settlement is generally prorated, and the offset may still apply over time.
“The offset only applies if it’s the same injury.” The offset may apply even when the two claims involve different conditions.
“Applying for SSDI will hurt my workers’ comp claim.” The two claims are decided under separate rules. That said, statements you make in one claim may come up in the other, so consistency matters.
“SSA will find out on its own.” You are generally responsible for reporting your workers’ compensation benefits and any changes.
You may be able to apply for SSDI while your workers’ compensation claim is still pending or while you are receiving benefits. The two claims are decided under separate rules, so one does not automatically stop the other. Because the timing can affect how an offset is applied, it may help to talk with an attorney before you file.
It may. If your spouse or children receive benefits based on your work record, those family benefits may also be reduced. SSA generally compares your combined benefits with either 80 percent of your average current earnings or your total family benefit, whichever is higher.
In some cases, yes. If your offset continues for several years, SSA may periodically recalculate your average current earnings. SSA uses the new figure only if it results in a higher benefit for you. Asking SSA how your offset was calculated may help you spot changes or errors.
Yes. SSDI does not require a work-related injury. If your condition is not connected to your job, or your workers’ compensation claim was denied, you may still qualify for SSDI if you meet SSA’s work credit and medical requirements.
Receiving SSDI and workers’ compensation at the same time can raise questions about offsets, settlements, and reporting. Every case is different, and how the rules apply to you may depend on your earnings history, your benefits, and the terms of any settlement.
Mark Hurt Law Firm can review your situation and explain your options under both programs. Contact us today for a free consultation.
