My workers’ compensation benefits and relationship to Social Security Benefits
Many people often ask can I receive my workers’ compensation wage loss benefits and also receive Social Security Benefits? To begin to explain this, one must understand the general framework of Social Security Benefits. The first step is to distinguish between Social Security Disability Benefits (SSD) and Social Security Retirement Benefits (SSR). The scope of this blog is not about Medicare or medical benefits but only about the lost wage disability benefit under the Workers’ Compensation Act.
In this regard, you are eligible for SSD if you have a disability or disabilities (physical or mental) which result in your inability to engage in any substantial gainful activity which has lasted or is expected to last at least 12 months. Assuming you qualify physically with respect to your disability, the amount of your benefits that you will receive are based upon your contributions to the Social Security System which is of course based upon your work and your payment of Social Security taxes. In general your SSD is 80% of your average current earnings (ACE) and your ACE is based upon the highest quarter in I believe the last five years that you were working. You can receive your SSD benefits until you are eligible for your normal retirement or until you are no longer disabled. At your normal retirement age your benefits will automatically be converted from SSD to SSR. The year that your benefits will convert or the year that you are entitled to your normal SSR is based upon your year of birth. Your SSR is of course also dependent upon contributions through the date that you stopped working. There is the option of course to take early retirement at age 62 or to wait for your normal retirement age. The purpose of this blog is not to educate you so much on what your Social Security Benefits are or rights are, but more to explain to you the interplay between Social Security Benefits and workers’ comp. In order to do so you have to understand the difference between SSD and SSR which I hope you now at least have a fundamental grasp. The following is the full retirement age by year of birth:
1943-1954 – age 66
1955 – age 66 in 2 months
1956 – age 66 in 4 months
1957 – age 66 in 6 months
1958 – age 66 in 8 months
1959 – age 66 in 10 months
1960 – later – age 67
Accordingly, for purposes of SSD, the Social Security Administration reduces what they will pay you each month for Social Security Disability in part based upon what you are receiving in workers’ compensation disability benefits. In other words, if your work injury has resulted in your receiving $500.00 a week in Workers’ Compensation disability benefits and you are on Social Security Disability, your Social Security Disability will be reduced fairly significantly by your receipt of $500.00 a week (approximately $2,000.00 a month) in workers’ compensation benefits. You can increase your Social Security Disability if you can settle your workers’ compensation case because there is a formula that than can be used by your workers’ compensation attorney to effectively spread out your lump sum settlement over the balance of your life thereby reducing the amount of the monthly offset that Social Security will consider. It gets very complicated and it is better explained to you in person and should you so desire an explanation please contact my office. However for the present purposes suffice it to say that for SSD and workers’ comp the offset is on SSD.
When you are receiving and/or beginning to receive Social Security Retirement, if you had been receiving Social Security Retirementbefore you were injured then there is no offset between your workers’ compensation and Social Security Retirement. If you were injured andsubsequently went on Social Security Retirement then there is an offset and the offset goes to workers’ compensation. The workers’ compensation law allows the workers’ compensation insurance company (irrespective of the fact that the company you were working for at the time that you were hurt may not have even contributed much if at all to your Social Security fund), that the workers’ compensation insurance company would be entitled to reduce what they pay you by 50% of each payment that you receive from Social Security Retirement. Hence, the relationship between SSR and workers’ comp is that the credit for SSR inures to the benefit of your workers’ compensation insurance company.
Therefore in conclusion, one way or the other you cannot receive full workers’ compensation benefits and full Social Security Benefits. If you are on Social Security Disability, Social Security will have a partial offset based upon your receipt of workers’ compensation benefits. If you are on Social Security Retirement and your injury occurs before you are eligible for Social Security Retirement then the workers’ compensation insurance company will receive a credit for one-half of your Social Security Retirement amount.
While my office does not practice in the area of Social Security Disability, there is another attorney in my building who is preeminent attorney in the area of Social Security Disability and if you want to contact my office we can easily arrange for an appointment where you can discuss both your workers’ compensation case and a potential Social Security Disability case.