Can you collect Social Security Disability and Workers’ Compensation at the same time?
Employees often collect Workers’ Compensation and disability benefits at the same time. However, as a general rule, you cannot collect both types of benefits for the same wage loss.
With Social Security disability, the Social Security Administration will pay disability benefits concurrent to Workers’ Compensation benefits, but it will offset the amount it pays against the Workers’ Compensation benefits.
The offset formulas, rules, and limits are somewhat complex, so consultation with a Workers’ Compensation and Disability attorney who understands both Minnesota Workers’ Compensation and Social Security Disability is extremely important.
Understanding Workers’ Compensation and Disability Benefits
It helps to understand “workers’ compensation” and “disability” benefits and what distinguishes the two concepts.
When people refer to “disability” benefits, it generally refers to one of three types of benefits: short-term disability, long-term disability, or Social Security disability. These benefits are all designed to replace lost income or wages due to an injury or disability. The same is true of workers’ compensation benefits, in cases where a person becomes injured or disabled while working.
The difference among all these types of benefits effectively boils down to who is paying them. Insurance carriers pay out on short-term and long-term disability, as they do on workers’ compensation, while the federal government manages Social Security disability payments.
What can be even more confusing is that Workers’ Compensation Wage Loss Benefits are sometimes called “disability benefits,” as in “temporary total disability,” “temporary partial disability,” “permanent total disability,” and “permanent partial disability.”
Calculating the Reduction
The general rule with Social Security Disability and Workers’ Compensation benefits is that you can collect both simultaneously but expect to see reduced payments from one or the other if you do. The total amount of benefits cannot exceed 80% of your current average earnings prior to the time you became disabled.
Your monthly Social Security disability benefits (including benefits payable to family members) are added together with your Workers’ Compensation or other public disability payments. If the total amount of these benefits exceeds 80 percent of your average current earnings, the excess amount is typically deducted from your Social Security benefit.
For example: Before you became disabled and unable to work your average current earnings were $4,000 a month. You and your family would be eligible to receive a total of $2,200 per month in Social Security Disability benefits. However, if you also receive $2,000 a month from Workers’ Compensation, your disability benefit will be reduced. Because the total amount of benefits you would receive ($4,200) is more than $3,200 (80% of your average current earnings), your family’s Social Security benefits will be $1,000 less.
Your Social Security benefit will be reduced until the month you reach age 65 or the month your other benefits stop, whichever comes first.
How does a Workers’ Compensation settlement affect Social Security Disability?
When an injured worker receives a settlement offer from the Workers’ Compensation insurance company, the “stipulation for settlement” agreement will include details on how their Social Security Disability benefits will be affected.
Typically, the total Workers’ Compensation settlement amount, minus any attorney’s fees, is used to calculate the actual amount the injured worker will receive. Next, a “life expectancy calculation” is used to determine the total number of months that the settlement would cover for the injury or disability. The total settlement divided by the number of months provides the Social Security Disability benefit offset amount.
For example, if you received a settlement offer of $150,000 and your remaining life expectancy is 31.75 years, or 381 months, then you can break down the total settlement to $393.70 per month. This is the amount Social Security would use to offset your ongoing disability benefits.
Our Workers’ Compensation and Disability Attorneys Can Help
As you can see, coordinating Workers’ Compensation and Social Security Disability benefits can be somewhat complicated. It’s important to understand how the various benefits interrelate and what the long-term impact will be when considering a settlement offer.
Adding to the complexity, some injured workers also have Short Term or Long Term Disability plans which have their own set of rules and laws, often requiring the individual to apply for Social Security Disability and excluding coverage for Work Injuries.
Collecting Workers’ Compensation and Long Term Disability benefits at the same time, while understanding the impact of Long Term Disability over-payments and Social Security Disability offsets, requires a deep knowledge of each type of benefit program.
At Fields Law, our Workers’ Compensation attorneys, Social Security Disability attorneys and Long Term Disability attorneys work as a team to maximize benefits for our clients. We can help you coordinate your Workers’ Compensation and Disability benefits to ensure you are receiving all the compensation you are entitled to.
