How Do Workers’ Compensation Benefits Offset Social Security Disability?

In some cases, a worker who is eligible for Social Security Disability benefits is also eligible to receive Workers’ Compensation benefits. However, there is one big issue to know: you cannot receive the full amount of both at the same time. Continue reading to find out why this and what you can expect to receive. If you have questions about the law regarding your injury, contact The Law Offices of Larry H. Parker at 800-333-0000 for a free legal consultation.

The Basics of Offsetting Social Security

Generally speaking (though there are some exceptions), Social Security requires that a person who is receiving Social Security Disability Insurance benefits have those benefits reduced to be no more than 80% of the worker’s total pay when they were fully employed. Reducing Social Security benefits to account for the benefits received through Workers’ Compensation benefits is called offsetting.

The truth is that the rules regarding offsetting are complex. Remember, too, that these programs can vary from state to state.

The Calculations Used to Determine the Offset

In order to calculate the offset for a benefit recipient, Social Security will begin by finding what they refer to as the “applicable limit,” which is really just the maximum combined benefit the recipient is eligible for under federal law.

If a recipient gets more than their applicable limit in a month, then their SSDI benefit will be reduced to bring the total back down to or below the limit. Workers’ Compensation offset of SSDI is more common in lower incomes because their applicable limits are lower.

Determining the Applicable Limit

Social Security determines the applicable limit based on one of two things, whichever is higher. The applicable limit is either 80% of the worker’s income before the injury or the total amount of SSDI received by every member of the worker’s family in the first month they received compensation. This is referred to as the “total family benefit.”

In most cases, 80% of a worker’s earnings are higher than their total family benefit. Remember that Social Security only uses one of those numbers to determine the applicable limit and that it is the number that is higher.

Determining Average Current Earnings

When determining your “average current earnings,” the SSA will take whichever of these are highest:

  • The average wage your SSDI benefit is based on
  • The average monthly earnings form the highest five years in a row
  • The average monthly earning from a single calendar year

Most of the time, the third option will be used.

Do You Need Help with Your Case?

These situations can be confusing. It can be difficult to determine which of the options is best for you to file and how to ensure you get the benefits you are entitled to. If you need to file a personal injury claim, remember that you can count on The Law Offices of Larry H. Parker at 800-333-0000 to help you.