Last month we kicked off a series of blog posts addressing various financial benefits by exploring “what is Early Retirement?”  This post gave an overview of early retirement benefits how they could effect your Social Security Disability Insurance (SSDI) claim. This month’s post will focus on a very common benefit that most of you have likely heard of, even if you haven’t collected it yourself: workers’ compensation.  Some applicants who apply for SSDI benefits are already receiving workers’ compensation benefits. Before we dive into how collecting these benefits could impact your SSDI award, it’s important that you understand what workers’ compensation benefits are and how they differ from any benefits you may receive through Social Security or an insurance company.

According to Cornell University Law School, workers’ compensation is designed to ensure that employees who are injured or disabled on the job are provided with fixed monetary awards, eliminating the need for litigation. The federal government does offer its own workers’ compensation insurance for federal employees, but every individual state has its own workers’ compensation insurance program. For more information on workers’ compensation please visit: https://www.law.cornell.edu/wex/workers_compensation

How will workers’ compensation effect my SSDI claim?

Some workers who are eligible for Social Security Disability Insurance (SSDI) benefits may already be receiving workers’ compensation when they begin to apply for SSDI. While you can still receive both benefits, you cannot receive both benefits in full, and so when your SSDI claim is awarded, either Social Security will have to offset the workers’ compensation payments in the amount they award you or, in some states (known as reverse offset states), the workers’ compensation benefits will be offset by the amount of Social Security benefits awarded. For a complete list of the states that conduct reverse offsets please visit: https://secure.ssa.gov/poms.nsf/lnx/0452105001

In order for the Social Security Administration (SSA) to properly process an SSDI claim if you don’t live in a reverse offset state, and in turn accurately determine how to offset an individual’s workers’ compensation benefits, they would need to obtain proof of workers’ compensation payments. This would consist of an award letter that would have a breakdown of all the payments you receive and when they began—or a settlement letter if you have settled your workers’ compensation claim.

By gathering this information, you would be able to provide Social Security with one letter stating the amount you received each month for workers’ compensation payments, when the payments began, and when they will cease. In the meantime, it is best to provide Social Security with a copy of your weekly paystubs if you are waiting to have an award letter generated so that Social Security is aware that you are receiving workers’ compensation benefits. When dealing with workers’ compensation benefits, we want to make sure we are providing this information to Social Security as soon as possible. As with any information that is not provided to Social Security, this can have a negative effect on the benefits that would be owed to you in your SSDI award.

Due to the long wait times that many SSDI applicants must go through in order to obtain a favorable decision, many applicants will exhaust their workers’ compensation benefits before or at the same time as they receive their SSDI award. Once this has happened, you would receive a settlement letter. By providing this letter to Social Security, it will allows for the SSA to offset your benefit from your retroactive payment and lets them know that moving forward, you will not receive any more payments from workers’ compensation.  The Advocator Group will work hard to validate that Social Security considers the weekly amount you receive from workers’ compensation to ensure that the highest and right amount of money will be getting paid out to you.  If you live in a reverse offset state and your SSDI claim is awarded, you may have to provide your workers’ compensation carrier with proof of your Social Security benefits.

Overall, it is best to provide all proof of your workers’ compensation—or any other benefits you may have received or are currently receiving through your state, employer, insurance, etc.—to Social Security as soon as you have it available in order to ensure an accurate and timely process when applying for SSDI benefits. If you are in need of more information regarding this, please do not hesitate to contact our office or reach out to your local Social Security office for assistance. While other benefits can be confusing in terms of the effect they can have on your SSDI, we hope that by providing you with this information on one type of benefit, we can help ease the stress of applying for Social Security Disability benefits. Please stay tuned for more benefit information and how this can offset your SSDI claim in next month’s blog post!

This post was written by one of our Client Advocates, Melissa.

 

Nothing in this post is intended as advice or a suggestion to elect or not elect to claim benefits of any kind, including Social Security benefits, nor is it intended as financial advice in any way.  The decision to claim benefits is a personal one that is contingent upon each individual’s unique circumstances.