April 20th, 2022
For many employees, a workplace injury is a temporary setback. They make a full recovery and return to earning a livelihood. But for others, a workplace injury means a long-term rehabilitation process or even permanent disability.
If you receive workers’ compensation benefits and learned that your injuries will have a permanent effect on your ability to work, you may be considering applying for Social Security Disability (SSD) benefits. But you may be concerned about how your workers’ compensation payments will impact your eligibility for SSD benefits.
Qualifying for Workers’ Compensation and Social Security Disability
People who receive workers’ compensation payments can apply for and receive SSD if they meet the federal definition of suffering from a disability. The workers’ compensation system is administered by the state of Nevada, while SSD payments are federal benefits. To qualify for SSD benefits, you must meet the federal government’s definition of disabled, and your work history must fit the earnings profile.
Temporary workers’ compensation benefits are awarded based on a workplace injury. They are a temporary benefit that helps employees who have suffered a workplace injury by giving them a period of continuing income while they regain their health or wait to be accepted for SSD benefits.
Private disability insurance and pension payments do not count towards your SSD benefits, even if these benefits bring your total income to an amount that is greater than what you received while you were working. Depending on your circumstances, you may qualify for benefits under one program, both programs, or none at all.
If you qualify for both workers’ compensation payments and federal SSD benefits, you may be able to receive a workers’ compensation settlement, either as regular payments or a lump sum, while also receiving SSD benefits. However, the sum of your benefits cannot exceed 80% of your average current earnings.
Workers’ Compensation and Social Security Disability Offset
Workers’ compensation payments may reduce the amount of your monthly benefits under SSD. This will depend on how much money you receive under workers’ compensation and the amount of your average monthly earnings before being injured on the job.
To determine whether your SSD benefits will be reduced, add the amount of your monthly SSD benefits, your workers’ compensation payments, and any other public disability benefits you receive. If the total exceeds 80% of your average current earnings before you became disabled, your SSD benefits will be reduced.
Your average current earnings is calculated as the highest of:
- Your average monthly wage upon which your un-indexed disability payments are based;
- Your average monthly earnings from covered employment and self-employment during the highest five years in a row after 1950; or
- Your average monthly earnings based on the single calendar year of highest earnings from covered employment. This single calendar year can be the year that your disability began or any of the five years immediately preceding the year your disability began.
Lump-Sum Workers’ Compensation Payments
If you received your workers’ compensation settlement as a lump sum payment, the Social Security Administration (SSA) will convert the lump sum settlement into monthly installment payments for the purpose of determining whether your benefit amount would exceed 80% of your average current earnings.
To calculate the monthly payment, the SSA will look at the monthly workers’ compensation amounts you received before receiving the lump sum settlement and divide the total amount by the amount of monthly payments. For example, if you had been receiving monthly payments of $1,000 and settled your workers’ compensation claim for a lump-sum payment of $20,000, the SSA will divide $20,000 by $1,000 and calculate your monthly workers’ compensation payments as $1,000 for the next 20 months.
The offset of workers' compensation payments may affect your SSD benefits for a time, but the reduction in benefit amount will not be permanent. Once your workers’ compensation payments run out, you can notify the SSA and your monthly benefit amount will be increased.
If your workers’ compensation payments do not run out, your SSD benefits will change once you reach full retirement age. At this point, you will receive regular social security payments instead of SSD benefits. Your monthly payments will increase to 100% of your maximum possible benefit.
The Vander Laan Law Firm, LLC: Compassionate Advocacy for Workers’ Compensation Claims
Determining how a workers’ compensation settlement will affect your SSD benefits can be complicated. The programs are administered by different agencies, and each has unique rules for qualifying. In certain circumstances, it may be advantageous to apply for benefits under one program but not the other. If you believe you are eligible for SSD payments, workers’ compensation benefits, or both, the Vander Laan Law Firm can help.
The Vander Laan Law Firm handles workers’ compensation cases on a low contingency fee, which means you will not pay an attorney’s fee unless the Vander Laan Law Firm recovers money for you. If there is no recovery, there is no fee.
Categories: Workers' Compensation