Social Security disability benefits and worker’s compensation are two distinct programs that provide benefits and/or medical care to people who are injured or disabled.
Social Security disability is a federal benefit program that provides monthly benefits to people who have a permanent disability and are not able to work due to a severe medical condition.
On the other hand, workers’ compensation is an insurance program that provides cash benefits and/or medical care to workers who become injured or ill as a direct result of their work.
Should I Apply for Social Security Disability Before or After Workers’ Compensation Settlement?
Social Security disability benefits are intended for people with a permanent disability. A permanent disability is one that has or is expected to last at least 12 months. You are advised to apply for Social Security disability if you have received a workers’ compensation settlement and your disability is permanent.
However, it’s crucial to know that your Social Security disability benefits may be reduced if you’re also receiving workers’ compensation. The Social Security Administration (SSA) has an “offset rule” that applies to workers’ compensation benefits. The law requires that Social Security Disability Insurance (SSDi) benefits be reduced for workers’ compensation when the injured worker is eligible for periodic or lump-sum workers’ compensation payments that partially replace lost wages.
If your Social Security disability benefit and other public disability benefits, including benefits from workers’ compensation, exceed 80% of your average current earnings, the excess amount is deducted from your Social Security disability benefit. Average current earnings are usually determined by calculating the worker’s average monthly earnings for the highest five consecutive years, or the average monthly earnings in the calendar year of the highest earnings from covered employment during the five years ending with the year in which the disability began.
If you received a lump-sum workers’ compensation payment, the settlement is subject to the offset. The lump sum is prorated to reflect the weekly or monthly rate that would otherwise have been paid had the award not been made in a lump sum. Medical and legal expenses incurred by the worker may be excluded in computing the offset.
This potential offset is calculated when Social Security determines the past-due benefit.
It is important that you maintain copies of the Workers’ Compensation Settlement Agreement. The SSA will not process past-due benefits until this information is provided.
Does Workers' Comp Affect Social Security Retirement Benefits?
Social Security retirement and Social Security disability are two separate programs. The “offset” rule only affects Social Security disability benefits. It does not affect Social Security retirement benefits. If you receive a workers’ compensation payment, your Social Security retirement benefits will not be affected.
Tips to Successfully Apply for Social Security Disability and Workers’ Compensation
Ensure a successful SSDI and workers’ comp application process and get the benefits you deserve by following these helpful tips:
Understand the eligibility criteria
Before you apply for a disability benefit, you should understand the criteria. Workers’ compensation is available to employees who suffer a work-related injury or illness. Social Security disability is available to those who have a permanent disability that prevents them from performing full-time work.
Consult a legal professional
Legal advice can be invaluable when applying for Social Security disability benefits and workers’ compensation. A lawyer can guide you through the process and help with any hurdles or complicated forms.
At LaPorte Law Firm, we have represented Social Security disability claimants in the Bay Area since 1982. We are a full-service law firm providing expert legal representation at all stages of the Social Security disability benefits process.
Gather necessary documentation
Documentation of your injury, illness, or permanent disability can be essential to a workers’ compensation and Social Security disability case. Medical records, employment information, and any evidence of your disability or injury should be collected and organized.
Be honest and consistent
Consistency and honesty in your application and communication with both Social Security disability and Workers’ Compensation are key. It is important to state only the facts, and not minimize or exaggerate them. Doing so can hurt your case, resulting in an unfavorable decision.
Prepare for a possible denial
Your first application for Social Security disability or your workers’ compensation claim may be denied. In fact, a majority of claimants at the Social Security disability application stage are denied. In many cases, it may take subsequent appeals until a case is successful.
If your application for Social Security disability benefits is denied, be prepared to appeal if necessary. Generally, you have 60 days from the date you received a denial to file an appeal.
Worker’s compensation appeals are to be filed with the Workers’ Compensation appeal board within 20 days from the date of the written decision. After the appeal board reviews your case, they will either affirm or overrule the original judge’s decision.
Consider the impact of a workers’ comp settlement on Social Security disability
If you receive a workers’ compensation settlement, it may affect your Social Security disability benefit. Your Social Security disability benefit will be reduced if your workers’ compensation benefit and your Social Security disability benefit exceed 80% of your average earnings before you became disabled.
Decide whether to apply for Social Security disability or workers’ comp
If you are disabled, you should apply for all of the public disability benefits available to you. However, the nature of your disability will affect your eligibility for public disability benefits. You may only be eligible for workers’ compensation if your illness or injury is work-related. You will only be eligible for Social Security disability benefits if your disability is permanent and prevents full-time work. If you have a work-related injury or illness that precludes full-time work permanently, you should apply for both benefits. Consult with a legal professional for advice tailored to your situation.
The SSA’s definition of a permanent disability is a physical or mental impairment that can be expected to result in death or one that has lasted or can be expected to last for at least 12 months in a row.
If your claim for SSI benefits is approved, retroactive benefits will be paid back to the date of your application. If your claim for SSDI benefits is approved, there is a five-month waiting period. Typically, SSDI benefits will begin in the sixth full month after the disability began.
Yes, you are permitted to receive multiple public disability benefits at the same time. Receiving workers’ compensation benefits does not affect your eligibility for Social Security disability. However, it may impact your Social Security disability benefit amount and is subject to SSA’s “offset rule”