If you are unable to work as the result of an accident on the job or a work-related condition, can you collect both Social Security disability benefits AND Workman’s Compensation? The short answer is yes. However, if you are awarded benefits under both programs, then the Social Security Administration (SSA) will adjust or “offset” the amount it pays, based on how much you receive from Workers Compensation.
Social Security disability benefit programs – Retirement Survivors Disability Insurance (RSDI) and Supplemental Security Income (SSI) — are run by the Social Security Administration, which is a federal agency. Worker’s Compensation is run by your home state, and programs vary from state to state. It is important to note that qualifying for disability benefits under the Social Security Administration is considerably different than qualifying for Worker’s Compensation. You are generally considered disabled for Workers Compensation purposes if you are no longer able to perform the job you were doing when you were injured. To qualify for SSA disability benefits, you must prove you are unable to perform any full time work in the national economy for a year or longer, or your condition must be expected to result in death.
Worker’s Compensation is designed to provide temporary financial relief while you recover, heal, or complete the process to obtain Social Security disability benefits. When your Worker’s Compensation benefits end, then your ongoing benefits through SSA will increase to the amount to which you are entitled.
A general rule of thumb is that your total earnings through Workers Compensation, combined with your Social Security disability benefits, cannot exceed 80% of the amount you were making before you became disabled.
Here’s an example: Let’s say you were working and earning $30,000 per year, or $2,500 per month, before becoming disabled. The total amount of your Worker’s Compensation combined with your Social Security disability benefits must be less than $2,000 per month (80% of $2,500). The Social Security Administration will offset your benefit amount to ensure that your total benefits equal no more than $2,000 per month. This applies only to public Worker’s Compensation programs. Privately funded pensions and disability insurance do not affect your RSDI benefits. They may disqualify you from receiving SSI, however, since SSI is an asset-based program.
Some workers opt to give up their entitlement to monthly Worker’s Compensation benefits in exchange for their employer paying an immediate lump sum payment. The Social Security Administration will make an adjustment in these cases, also. The SSA uses various methods to calculate the amount it will offset your benefit, but in most cases, your lump sum payment will be converted into a monthly amount and your Social Security disability benefits will be adjusted accordingly.
Here’s an example: Let’s say you were awarded $1,200 per month in Worker’s Compensation payments, but then entered into a lump sum settlement for $24,000. Social Security will consider that you received $1,200 per month in Worker’s Compensation for 20 months ($24,000 / $1,200) to calculate your Social Security disability offset amount.
Attorneys who specialize in Worker’s Compensation usually will draft settlement agreements to minimize the offset of Social Security disability benefits. If you are unable to work as a result of a work injury or illness, you should consult your state authorities or a lawyer who is familiar with the Worker’s Compensation laws in your state.
Your representative can help determine whether your work-related illness or injury is severe enough to qualify for disability benefits under the Social Security Administration. He or she also will explain how your benefits will be impacted by your Workman’s Compensation claim, monthly benefits, or lump sum settlement.