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How Does Workers Compensation Affect Social Security Disability Benefits

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Understand How Workers’ Compensation Benefits Can Affect Your Social Security Disability Payments

By Elizabeth Dickey

Some workers who are eligible for Social Security disability benefits may also be eligible to receive workers’ compensation benefits if they have work-related illnesses or injuries. However, workers aren’t able to receive the full amount of Social Security benefits and workers’ compensation benefits at the same time.

In most situations, Social Security requires that Social Security disability insurance benefits be reduced so that the total monthly amount that a disabled worker receives is no more than 80% of the amount she earned when she was fully employed. The process of Social Security reducing disability benefits to account for worker’s compensation is called a worker’s compensation “offset.” The rules about how Social Security calculates worker’s compensation offsets are complicated. Worker’s compensation programs vary from state to state, and each state has different rules about things like the maximum workers’ compensation that can be paid out, the different categories of benefits, and the ways a claimant can settle a worker’s compensation case.

Let London Eligibility Review Your Ssd Payments

If you receive a worker compensation settlement, let a disability advocate at London Eligibility review it to ensure that Social Security excludes from the offset calculation any amounts that went toward legal fees, medical and rehabilitation expenses, and money allocated for medical treatment you need in the future.

A workers compensation settlement sometimes lacks clarity about what it covers, which could result in an incorrect calculation of the offset by Social Security. Our disability advocates work with your workers compensation attorney to gather and present the documents needed to clarify the purpose and intent of the settlement and the purpose of the funds.

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Will My Settlement Affect My Social Security Disability

You waited and waited and finally got approved for Social Security disability benefits, but now youve been injured in an accident.

Hopefully, youll hire a personal injury attorney and get the settlement you deserve. But how will that settlement money affect your disability benefits?

If you receive SSI or Medicaid, your settlement could affect your benefits or cause you to lose them completely. However, every case is different, and we strongly urge you to discuss your situation with your casework or an experienced Social Security disability attorney.

Here are a few questions we can answer:

Social Security Disability And The Workers Compensation Offset In Pennsylvania

How Does Workers

If you are receiving workers compensation benefits while also receiving Social Security Disability in Pennsylvania, the so-called workers compensation offset may apply. When your SSDI benefits are subject to the workers compensation offset, they are basically reduced.

Generally, the workers compensation offset does not apply when an individual is receiving Supplemental Security Income or Social Security retirement benefits. The goal of the offset is to reduce the workers total monthly amount of benefits to the applicable limit.

Social Security Disability and the Workers Compensation Offset

Under Pennsylvanias workers compensation law, individuals are eligible for workers comp benefits after sustaining an on-the-job injury or being diagnosed with a work-related illness. In some cases, injured workers are eligible to receive both workers compensation and Social Security Disability Benefits .

Many workers who qualify for both SSDI and workers comp benefits have long-term and serious work-related impairments and disabilities. According to the 42 USCA 424a, depending on an injured employees circumstances, SSDI benefits are reduced partially or fully by the amount of workers comp.

Heres everything you need to know about the workers compensation offset on Social Security Disability Benefits in Pennsylvania:

What Are the Average Current Earnings?

  • Your unindexed primary insurance amount, or the average monthly wage that your SSDI benefits are based on
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    Can You Claim Retirement Benefits While Receiving Workers Compensation

    Yes, you can as long as you qualify for both, except when youre a federal worker.

    The Federal Employees Compensation Act of 1916 provides that workers comp recipients who have reached the retirement age may opt between workers comp or retirement benefits.

    Many federal workers opt for the former as workers comp pay up to 75% of an employees salary tax-free. Retirement benefits, on the other hand, pay only 60%.

    Pregnancy And Maternity Leave

    If you are disabled due to pregnancy, you may be entitled to up to 26 weeks of disability benefits.

    You will need to submit a medical report completed by a doctor or certified nurse midwife stating your disability is due to pregnancy.

    • The medical report should describe specific pregnancy complications if your disability
    • started more than four weeks before the anticipated birth date OR
    • lasts more than four to six weeks after the actual birth date.

    Note: Benefits are not payable for any period you are unable to work due to elective surgery .

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    Will A Workers Comp Settlement Decrease My Disability Benefits

    A workers compensation settlement does carry the possibility of reducing the amount of monthly disability benefits you can qualify for from the SSA. Whether or not this will affect you depends on several factors, including how much your workers comp settlement is worth and the amount of your average monthly earnings prior to being injured on the job.

    To figure out if and by how much your SSDI benefits may be reduced, add the amount of your monthly disability benefits from the SSA, your workers compensation payment, and other public disability payments you receive.

    If the total amount of your monthly disability payments exceeds 80% of your average current earnings before you became disabled, your SSDI benefits will be reduced accordingly.

    How Social Security Calculates The Offset

    Does Social Security Affect Workers’ Compensation?

    To calculate the amount of the offset for a particular recipient, Social Security first determines what it calls the “applicable limit,” or the maximum total monthly amount of combined benefits that the recipient is allowed to get under federal law.

    When a claimant receives more money than the applicable limit in any given month, then Social Security offsets SSDI in the amount required to bring the total back down to the applicable limit. Worker’s compensation offsets of SSDI happen more often to those who earned lower incomes when they were working, because their applicable limits are lower and more easily exceeded once the worker starts to receive SSDI and worker’s compensation.

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    How Does A Worker Compensation Settlement Affect Ssd

    When you have a work-related injury or illness and qualify for workers compensation benefits, you generally receive periodic payments. Sometimes, a workers compensation system allows the insurance company handling a claim to offer someone with a disability a settlement with a one-time payment. The settlement payment is in place of a continuation of periodic payments, which stop once the settlement is accepted.

    A worker compensation settlement does not necessarily mean that your monthly SSDI benefits increase. Social Security may continue the offset for workers compensation. It accomplishes this by taking the amount of the worker compensation settlement and dividing it by the monthly amount you received from compensation before the settlement. The result of the calculation represents the number of months that your SSD payments will continue to be subject to the workers compensation offset.

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    Compensation As Ordinary Income

    If compensation is assessed as ordinary income then the normal income test rules and limits apply.

    Compensation that is ordinary income is NOT employment income .

    If a CAP is not payable to a person because of a lump sum payment of compensation, that lump sum payment is NOT treated as ordinary income of the compensation recipient or their partner for social security purposes. Any deemed income from the investment of some or all of the lump sum IS treated as ordinary income for social security purposes.

    Act reference:SSAct section 8 a payment of compensation â¦

    Policy reference: SS Guide 4.13.1.20 Assessment of Compensatory Type Payments

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    Subrogation Rights Against Employees Liability Claim

    When a third person is liable to the employee for a work-related injury , the employer and its workers compensation insurer may be entitled to share in any settlement or recovery the employee or dependents may be entitled to receive. This is called a right of subrogation and is governed by Section 287.150 RSMo. This means that if you receive any workers compensation benefits and also have a liability claim for the same injury, you cannot keep all of the money from the settlement or recovery in the liability claim some portion of the settlement or recovery must be repaid to your employer or its workers compensation insurer.

    How Much Will I Be Paid

    Does my workerâs compensation settlement affect my social ...

    In most cases, your benefit check, which is paid bi-weekly, will be 66 2/3 percent of your average weekly wage. If you were injured before October 1, 2003, this amount is calculated by using wages earned during the 91-day period immediately preceding the date of your injury, not to exceed the state limit. If you worked less than 90% of the 91 day period, the wages of a similar employee in the same employment who has worked the whole of the 91-day period or your full-time weekly wage may be used. If you were injured on or after October 1, 2003 , your average weekly wage is calculated using wages earned 13 weeks prior to your injury, not counting the week in which you were injured.

    In addition, if you worked less than 75% of the 13 week period, a similar employee in the same employment who has worked 75% of the 13-week period or your full time weekly wage shall be used.

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    Question: Will Mymedicaid Or Medicare Be Affected If I Get A Settlement

    Answer: Yes and No

    YES:Medicaid benefits, which are provided to the disabled and the needy, would probably be affected by a settlement.

    Medicaid, like SSI, is based on income and family size. If the settlement amount pushes your income over the limit, your Medicaid, SNAP Food Assistance, and Subsidized Housing benefits could be affected.

    Even if you choose to give away part of your settlement as a gift or a charitable donation, the government could reduce your Medicaid or even seek reimbursement for the benefits youve received.

    NO:Medicare benefits would not be affected because those are based on work history, not income or financial resources. However, a settlement may affect your Medicare premiums, and recipients must report those earnings.

    If you are disabled and receive a large personal injury settlement, you probably wont lose your Social Security disability benefits. However, you may lose other programs you may currently rely on, such as SSI or Medicaid. Call Hensley Legal Group today for a free, no-obligation consultation and talk to an experienced Social Security disability attorney about your case.

    The Difference Between Workers Comp And Ssdi

    Of course, the qualifications for Workers Compensation are quite different than the qualifications used to determine whether you are totally disabled for the purpose of collecting Social Security Disability benefits, so it is entirely possible that you will qualify for one and not the other.

    Workersâ Compensation programs vary from state to state. Going in to all of the particulars of each states requirements and benefits is beyond our scope. If you have been hurt on the job and believe you may qualify for Workmans compensation, you should consult your state authorities or a lawyer who is familiar with the Workersâ Compensation laws in your state.

    Most of the time, Workersâ Compensation is designed to be temporary, affording employees who have been hurt on the job a period of continuing income while they heal or wait for acceptance for SSDI benefits.

    Because they are separate entities, receiving Workersâ Compensation does not disqualify you for SSDI nor does it negatively affect your chances of having your disability claim accepted.

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    Lump Sum Workers’ Compensation Settlements

    Many worker’s compensation claimants will settle their cases before a hearing or trial. In many cases, disabled workers give up any entitlement to monthly worker’s compensation benefits in exchange for the employer paying an immediate lump sum payment. Social Security is wise to this fact and will offset SSDI benefits to account for a lump sum settlement.

    Social Security has several ways of converting a lump sum workers’ comp payment into a monthly benefit for the purposes of calculating an offset, and it will take a close look at the language of the settlement document when it is offsetting a lump sum. In the most basic method, Social Security converts the lump sum to a monthly amount by dividing the lump sum by the periodic worker’s compensation payment that the person had been receiving, and then applying the SSDI offset for the resulting number of months.

    For example, Mr. Jones is 25 years old and had been receiving $1,200 per month in worker’s compensation payments until he entered into a lump sum settlement for $24,000. Social Security will consider Mr. Jones to have received $1,200 per month in worker’s compensation benefits for 20 months for purposes of calculating the SSDI offset.

    What Should You Not Tell A Disability Doctor

    How do workers’ compensation payments affect my disability benefits?

    The last thing you want to do during a Disability medical exam is exaggerate your condition. Dont say you have pain everywhere or try and make your condition look worse than it really is. The doctor and staff will observe you arriving at the office, entering the exam room, and getting on and off the table.

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    Changing Your Ssi To Retirement Benefits

    No workers comp offset will take place if you are receiving Social Security retirement benefits. Therefore, if you are on SSI and are going to file a workers comp claim, it may be in your best interest to consider retiring early. Though your Social Security benefits will naturally be lower, your workers compensation payments will not be affected. Of course, it is not beneficial to consider retiring early unless you are over 60, so this option doesnt work for everyone.

    Workers compensation can be a complex system to navigate, and with the added confusion of SSI and offsets, it can get overwhelming quickly. If you are currently on SSI and are filing a workers comp claim, it is best to contact a competent workers compensation attorney in Orange County. Injury attorneys are well-versed in the nuances of SSI and workers comp laws and will be able to determine the best options for you to reduce or eliminate your offset.

    Can You Collect Both Benefits At The Same Time

    The short answer is yes, but only under the right situations. Often you can collect disability benefits from the state level to cover expenses while waiting for a workers compensation claim to be settled. But the state will expect you to repay the benefit amount once you get your workers compensation settlement. This can be a disadvantage if you get a bad settlement and your state benefits were actually higher than your workers compensation benefits. If you are collecting SSD benefits from a federal level, you will not need to repay benefits.

    You can only collect federal benefits if:

    • You are permanently disabled
    • Your disability will last for more than a year
    • You have a terminal illness
    • You paid the necessary funds for coverage into the SSD system

    If you meet the requirements, you can collect federal disability benefits as well as receive a workers compensation settlement at the same time.

    It is important to keep in mind that if you are collecting state benefits or workers compensation, the federal government may reduce the amount of SSD benefits. State benefits will likely get terminated to give way to federal ones. But because workers compensation is company-tied, you will still get that if your injury was work-related. Note, you will not receive a lower amount of workers compensation if you are receiving SSD benefits as well.

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    Does Workers Compensation Affect Ssdi Benefits

    It is very common for someone who is receiving Worker Compensation to apply for Social Security Disability Insurance or Supplemental Security Income . In most cases, if you are receiving money from workers compensation, then those payments will offset your SSDI or SSI payments. In general, the offset is usually dollar for dollar.

    For example, Mary in Phoenix, Arizona was receiving workers compensation for an injury that occurred at work. Her monthly workers comp payment was $450. Mary was also awarded Social Security Disability Insurance benefits after her claim was approved by the Social Security Administration. Mary was going to receive $1300 a month from her Social Security Disability, however, since she was already receiving $450 in workers comp, her SSDI payment was reduced to $850 per month.

    Information For Compensation Payers

    Does Workersâ Compensation Affect Social Security ...

    Preliminary Notice

    A preliminary notice issued under section 1182 of the Social Security Act 1991, requires a compensation payer to tell us before the release of compensation.

    A preliminary notice continues to have effect until your full liability is disclosed. Youll need to tell us of any further compensation payments that contain economic loss.

    Periodic compensation payments

    A person covered by a preliminary notice must tell us when they start getting payments. This includes restoration of periodic and lump sum payments.

    Recovery Notice

    A recovery notice issued under section 1184 of the Social Security Act 1991, requires your client to refund the full amount stated in the notice to us.

    A recovery notice may still be issued provided it is served before the release of the compensation payment.

    Garnishee Notice

    A garnishee notice is not a charge notice. It can occur when the compensation recipient has another debt not related to the compensation debt. We can seek to recover this from any third party that has funds the customer is entitled to.

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