Yes, a workers’ compensation settlement can affect Social Security Disability benefits. According to the Social Security Administration (SSA), your Social Security Disability Insurance (SSDI) benefits may be reduced if you receive workers’ compensation, and the total amount of your settlement and SSDI benefits exceeds 80 percent of your income.
However, you may be able to reduce offsets caused by your workers’ compensation settlement. Our attorneys who work with workers’ compensation and Social Security Disability benefits will review your case to see how we could balance both benefit payments for you.
In This Article
In This Article:
- Lump-sum workers’ compensation can affect your SSDI benefits
- Are you allowed to collect workers’ compensation and Social Security disability benefits at the same time?
- Spreading out your workers’ compensation may help reduce SSDI offsets
- How do you spread out lump-sum payments?
- Farmer & Morris Law, PLLC will review your case for free
For a legal consultation, call 828.286.3866
Lump-Sum Workers’ Compensation Can Affect Your SSDI Benefits
If you win a workers’ compensation settlement, the federal government will add this sum figure to your SSDI benefits to measure whether the total exceeds 80 percent of your income. Your SSDI benefits may vary based on:
- Family size
- The type of disability you have; and
- Your work history
If the total does not exceed 80 percent of your income, then your workers’ compensation won’t affect your current SSDI payments. However, if the total does exceed 80 percent, the federal government will reduce your SSDI payments until you reach retirement age or until your workers’ compensation benefits (including any other benefits you receive) stop, whichever comes first.
Keep in mind that certain other public benefits will not affect your SSDI benefits, meaning they will not be counted in the total figure. These programs include:
- Supplemental Security Income (SSI)
- Veterans Administration (VA) benefits
- Government benefits from state and local programs
Are You Allowed to Collect Workers’ Compensation and Social Security Disability Benefits at the Same Time?
Yes. Workers’ compensation and Social Security Disability benefits are separate programs. Workers’ compensation programs are governed by the state, and Social Security Disability benefits are federal aid. That being said, eligibility requirements for these programs are different.
While you may qualify for workers’ compensation if you sustain an injury on the job, that does not mean you immediately qualify for SSDI if your injury becomes a short- or long-term disability. According to the SSA, for SSDI benefits, you must:
- Have worked in jobs that participated in the Social Security programs
- Have an injury that meets the definitions of a disability as defined by the SSA
- Have worked enough time to earn work credits and receive SSDI benefits
- Have a long-term impairment that prevents you from engaging in substantial gainful activity (SGA)
Other eligibility requirements involve special circumstances, such as if you are blind or the widow/widower of a spouse who died because of their disability.
If you qualify for SSDI benefits and are worried your workers’ compensation may offset the amount of disability benefits you can receive, our attorney will look into the options you have to reduce the offset.
Spreading Out Your Workers’ Compensation May Help Reduce SSDI Offsets
One way to reduce the offset of your SSDI benefits is to spread out payments from your workers’ compensation settlement over time.
This may be beneficial to you, as many workers report that their SSDI benefits were greater than the payments they received from workers’ compensation, according to the SSA. Some economists attribute this to employers paying lower wages to cover the costs of workers’ compensation insurance.
How do You Spread Out Lump-Sum Payments?
Before agreeing to a settlement deal, your attorney must include an “amortization provision.” This is a formal statement that you would like to receive your workers’ compensation benefits over your life expectancy.
It is crucial that the amortization provision be included in the original settlement documents. Otherwise, the Social Security Administration will interpret any action to include it post-settlement as an effort to avoid the offset.
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Farmer & Morris Law, PLLC, will Review Your Case for Free
If you recently filed your workers’ compensation case and are wondering how a settlement might affect your Social Security Disability benefits, our team at Farmer & Morris Law, PLLC, will review your case for free and explain what your legal options are. Alternatively, if you would like to file for workers’ compensation and/or Social Security Disability benefits, we can assign lawyers who work in those areas to your case.
Our firm practices in North Carolina and South Carolina. To receive a free case review and consultation, call (828) 286-3866 today.