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Does Workers Comp Affect Social Security Retirement Benefits

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Taking A Lump Sum Payment And Spreading It Out

Does Social Security Affect Workers’ Compensation?

If you elect to take a lump sum payment from workers compensation instead of incremental payments, you can state you intend to spread them out yourself in an effort to reduce the affect of the offset. Your intention to spread out the payment will need to be stated expressly during the settlement agreement. This method often significantly reduces the offset, and in some cases may even remove it.

However, this option is only available if it is presented in the original settlement, known as an amortization provision. If it is not presented in the original agreement, you may not be able to receive benefits in a lump sum. Keep in mind, once the lump sum agreement is initiated, you are releasing the employer from any further liability. Therefore, if your workers comp runs out and you are still undergoing medical treatment, you will not be able to seek additional compensation.

Social Security Disability Insurance

Workers’ compensation in the United States is surpassed in size only by the federal Social Security Disability Insurance and Medicare programs in providing cash and medical benefits to disabled workers.

Although Social Security disability benefits and workers’ compensation are the nation’s two largest disability benefit programs, the two programs are quite different. Workers are eligible for workers’ compensation benefits from their first day of employment, but Social Security disability benefits are paid only to workers who have a substantial work history. Workers’ compensation provides benefits for both short-term and long-term disabilities and for partial as well as total disabilities. These benefits cover only disabilities arising out of and in the course of employment. In contrast, Social Security disability benefits are paid only to workers who have long-term impairments that preclude any gainful work, regardless of whether the disability arose on or off the job. By law, the benefits are paid only to workers who are unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that is expected to last at least a year or result in death. The impairment has to be of such severity that the worker is not only unable to do his or her previous work but is also unable to do any other type of substantial gainful work. Social Security disability benefits begin after a 5-month waiting period.

What About A Lump Sum Workers Comp Payment

Many workers comp claims are resolved through a lump sum settlement. It is important to note this may also affect the amount you receive in disability benefits.

The SSA will convert the lump sum into a monthly amount by dividing it by the payment amount the worker was receiving before the settlement was reached. The result of this equation determines how many months the SSA will reduce your monthly disability benefits.

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Exclusions For Certain Expenses

Before calculating your gross workers’ compensation settlement amount, Social Security deducts legal fees, dependent payments, and rehabilitation costs. Past or future medical expenses are also excluded, with the exception of payments made by Medicare. Social Security will require documentation of any expenses you wish to deduct from your workers’ comp settlement, so maintain these records carefully.

If you’re covered by Medicare and you set aside an unreasonably large amount of your workers’ compensation settlement for future medical expenses , Medicare may be unwilling to pay benefits until you’ve exhausted those funds.

How Does Ssd Calculate Average Current Earnings

Does Workers Compensation Affect Social Security ...

Average current earnings are calculated by Social Security using one of the following three methods:

  • Your average monthly earnings for your five highest-earnings years.
  • The average wage is used to determine the unindexed primary insurance.
  • Average monthly earnings of your single, highest-earning year, which can either be the year of the onset of your disability or one of the five years immediately before it.

It gets complicated, so it is a good idea to consult with an NW Indiana and Chicagoland disability lawyer.

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Discuss Your Options With A Trusted Disability Attorney

If you have been seriously injured at work and would like more information about maximizing your workers compensation and Social Security benefits, we encourage you to contact us for a free initial consultation.

With exceptional legal credentials and experience, the hard working attorneys at Petro Cohen, P.C. are dedicated to providing our clients the highest quality of legal service available. Our lawyers and staff share a passion for winning and an uncompromised commitment to every client we represent.

Petro Cohen, P.C. is a full-service workers compensation, personal injury, and Social Security disability, law firm with more than 200 years of combined experience. The practice is limited to these three areas in order to provide you with the highest quality of legal service available. And with both workers compensation and Social Security disability attorneys on hand, you can rest assured that our knowledgeable and experienced attorneys will fight to get you the benefits you need and the compensation you rightfully deserve.

Our respected attorneys maintain impeccable credentials, and have an excellent reputation for assisting clients with all types of disability claims. We have thousands of satisfied workers compensation, personal injury, and Social Security disability clients who tell our story best. To learn what our clients have to say about their experience with the law firm, we encourage you to visit our Web site to view numerous Client Testimonials.

Differences Between Wc And Ssdi

Workers compensation laws vary somewhat from state to state however, a couple differences in eligibility criteria for WC and SSDI are universal. First, Social Security and workers compensation have different definitions of disability. Social Security requires you to be disabled not just from the job you were in when you were injured but also from other kinds of work that you could perform if you did not have physical or mental limitations. In contrast, workers compensation requires only that you be disabled from the occupation you were in at the time you incurred the injury or work-related illness.

The second universal difference is the length of time you have to be disabled to receive benefits. Workers compensation benefits can be paid immediately whereas to be eligible for Social Security Disability, you have to have been or expect to be disabled for twelve months. Another difference is that workers compensation will pay the full cost of medical treatment for your work-related injury beginning with when it occurs it will not pay to treat other medical conditions. Social Security, on the other hand, does not provide health insurance until you have received twenty-four months of SSDI benefits. Once you have Medicare, it will pay a portion of your medical treatment for any medical condition, not just your disabling condition.

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Workers Compensation And Social Security Disability

If youve had an on-the-job injury and are eligible for workers compensation, you may be eligible to receive both workers compensation and Social Security Disability at the same time. However, your Social Security Disability may be reduced or suspended for months in which you are eligible for both benefits and the two benefits together exceed a certain amount. The reduction is called a workers compensation offset. The offset is discussed in detail later in this article.

Can I Get Both Workers’ Comp And Social Security Disability

Can I Receive Both Social Security Disability & Workers Comp Benefits? Gaylord Popp, LLC

The short answer is yes, you can receive both Workers Compensation and Social Security Disability Insurance benefits if you qualify for both disability benefits and workers’ compensation.

They are separate programs. SSDI, which is run by the Social Security Administration , is federal program. Workers Compensation programs are run by your home state.

If you are unable to work because of a workplace injury or an occupational illness, you may qualify for disability benefits from the Social Security Administration .

To be approved for disability benefits, you must be completely unable to work for at least 12 months or have a condition that is expected to result in your death. If you can still work and earn a living, your claim will be denied because the SSA doesnt award partial disability.

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How Can I Maximize My Disability Benefits In Ohio

The Social Security Administration uses a variety of formulas to calculate your average current earnings. Which formula they use depends on your specific circumstances. With some planning, there are ways to minimize any offset of SSD benefits. We can look at your SSD claim as well as your workers compensation case and calculate the most effective strategy in your case.

Here are the most common approaches to maximizing your disability benefit:

Does A Workers Compensation Settlement Affect Social Security Disability

A workers compensation settlement may impact your long-term disability payments. For instance, say you receive $1,000 per month from SSDI. Then, you accept a workers compensation settlement of $10,000. The Social Security Administration may adjust your SSDI by that $10,000 amount. Therefore, you would not receive your $1,000 monthly payment from SSDI for 10 months.

However, an experienced attorney may be able to help minimize the impact of that adjustment by having SSA spread out the adjustment over a lifetime. You would still receive a monthly check with a small deduction towards reducing that adjustment.

Private disability insurance and pensions shouldnt have an impact on your SSDI benefits. Even if your private disability payments push your total income higher than your income when you were employed, your long-term disability shouldnt be affected. Still, you should consult with an attorney to discuss these provisions and whether any Social Security workers compensation offset is taxable.

Its important to remember that the requirements to qualify for long-term disability through SSDI may be more stringent than the requirements to qualify for workers compensation. In general, you are considered disabled for workers compensation if you cannot perform the job you were doing prior to the injury.

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How Do Workers Comp And Ssd Work

Workers compensation programs exist to pay benefits to state or federal employees for a work-related injury or illness. Benefits include the cost of medical care, replacement of wages for time lost from work due to the illness or injury, and when a worker does not fully recover, payment for long-term partial or full disability. The disability compensation an injured person receives from workers comp may be in the form of periodic payments or it may be a lump-sum workers comp settlement.

If you apply for or receive Social Security disability benefits, you must report payments you receive from any state or federal workers compensation program to the Social Security Administration in the same way that you must report other public disability benefits that you receive. Reportable public disability payments include:

  • Civil service disability payments.
  • Disability benefits are received through a state-funded program.
  • Retirement benefits are based on a disability and paid through a state or local government.

Any benefits you receive from workers comp or other public disability programs when combined with your SSD benefits cannot be greater than 80% of the average current earnings you had before becoming disabled. Something to keep in mind is that some public benefits do not count toward the 80%. These include benefits paid by the Veterans Administration and through the Supplemental Security Income program.

Whats The Difference Between Voluntary And Involuntary Retirement

How Do Workers

Voluntary Retirement

Just as the name implies, voluntary retirement is when an individual chooses to leave the workforce of their own volition. Individuals often choose voluntary retirement to remove themselves from the workforce to collect a pension and/or an incentive package. If an injured employee is able to do the same job or modified work that accommodates their restrictions, retirement would be considered voluntary, so workers comp disability benefits would end.

For those who choose to retire voluntarily, an employer can file to cancel workers compensation benefits. Bear in mind that accepting a pension doesnt necessarily mean an employee has chosen to voluntarily retire and give up their workers comp benefits. Instead, the employer must prove that a worker has given up the search for work or otherwise removed themselves from the workforce.

Involuntary Retirement

Involuntary retirement occurs when an individual is no longer able to participate in the workforce. This can occur either at the same place of employment within the employees restrictions on their abilities, or if they cannot find comparable work elsewhere. Involuntary retirement is often designated when an employee can show that their injury, commonly a permanent disability, has led to retirement. In these cases, workers comp’ benefits will continue for the remainder of an individuals life.

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Lump Sum Payment Adjustments

How can workers comp and Social Security retirement benefits be effected by lump sum payment adjustments?

Injured workers can settle workers compensation claims through lump sum settlements. If you receive a lump sum settlement, you may face an offset amount for your benefits. Lump sum payment adjustments are based on the amount of workers compensation you were receiving every month.

In Pennsylvania, life expectancy lump sum settlements are quite common. Under Pennsylvania law, future periodic payments can be commuted by the Workers Compensation Board. No discount is applied when the commuted amount of time is 52 weeks or less. When the commuted amount is being calculated for a time period of more than 52 weeks, then a discounted rate is usually applied.

Before the agreement can be legally binding, a Compromise and Release Agreement must be approved. This detailed form typically provides all the information required for an offset. Occasionally, however, the awards effective date may not be specified. If you received periodic payments, but the end date for the periodic payments is not listed, this can be problematic.

How Workers Comp Affects Social Security Disability Benefits In Ohio

If you have qualified to receive workers compensation and Social Security Disability benefits, the Social Security Administration may reduce your SSD so that, at the most, your total monthly benefit equals 80% of what you earned when fully employed. In some cases, your combined benefit could be even less.

To decide whether an offset is required, the SSA determines the applicable limit of your total monthly combined disability benefit. Your applicable limit is the higher of either:

  • 80% of your pre-injury income, or
  • the total amount of SSD benefits received by all members of your family in the first month that you received workers comp. This is known as the total family benefit.

If your combined SSD and workers comp benefits for any given month exceed 80% of your pre-injury average earnings or total family benefit, the SSA will reduce your SSD payment.

To apply for SSD, you must report your workers comp settlement as well as any other disability payments you receive, such as from private insurance.

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Dont Wait To Apply For Ssdi

Even if you are receiving sufficient income from your WC claim, dont wait to file your SSDI claim. If you think that you may meet Social Securitys disability definition and that you will be disabled for twelve months, you should apply right away. Numerous reasons exist for why it is a good idea to file an application for Social Security Disability as soon as you think you might qualify.

First, if you wait till your workers compensation runs out or is close to ending, you may be left with no income while your Social Security claim is pending. Second, because of time limitations on retroactive SSDI benefits, you may even lose back Social Security benefits if you apply more than seventeen months after you become disabled. Finally, the farther you move away from the onset of your disability, the harder it may be to prove that you became disabled from all occupations at that time. This is especially important if you have been working intermittently. If you have, your Social Security Disability insured status might expire while you are getting workers compensation requiring you to prove that you became disabled prior to the expiration to get any Social Security Disability benefits at all.

How Workers Comp Affects Social Security Retirement Benefits

Can I Get Social Security While Getting Workers’ Compensation?

One of the most common concerns for injured workers is that opting for a workers compensation might affect their social security retirement benefits.

If you think about it, their concerns are not unfounded. After all, workers compensation can affect your Social Security Disability Benefits.

So, does workers compensation affect your Social Security Retirement Benefits? Yes, it can. But the answer is more complicated than just a simple yes or no. To start, you need to understand how social security retirement is computed.

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How Will My Workers Comp Payments Affect My Social Security Disability Payments

Joseph A. Moro

If you have been receiving workers compensation for an occupational injury or illness that you have learned will have a permanent effect on your ability to work, you may be considering an application for Social Security Disability benefits. But you may have been cautioned that a workers comp settlement could hurt your SSD claim.

You need to be aware of how the two systems one state and one federal work together. To ensure you receive the full benefits available to you by law in Ohio, you should consult an attorney from Heller, Maas, Moro & Magill, an Ohio disability law firm.

Your SSD benefits may be reduced to account for the payments you receive from a workers compensation claim. But a qualified lawyer can work to minimize the impact of workers comp benefits on your total SSD benefits. Contact us to find out how.


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