WORKERS’ COMPENSATION & SSD BENEFITS
Workers’ compensation provides benefits to those who suffer an on the job injury. Benefits include medical treatment for work related conditions. Benefits also include cash payments that partially replace lost wages.
Workers’ compensation pays temporary total disability benefits benefits while you recuperate from your injury. If the condition has lasting consequences, then the program may pay permanent disability benefits. In the case of a fatality, the family of the worker receive survivor benefits.
Each state designs and runs their own workers’ compensation program. The programs vary across states in terms of who provides insurance, which injuries or illnesses are compensable, and the level of benefits. Generally, state laws require employers to obtain insurance. In the alternative, an employer must prove they have the financial ability to carry insurance at their own risk.
WORKERS’ COMPENSATION BENEFITS
Workers’ compensation in the United States is surpassed in size only by the Social Security Disability Insurance and Medicare Benefit programs. These three programs are the largest programs to provide cash and medical benefits to workers.
Although SSD benefits and workers’ compensation are the two largest benefit programs, the two programs are quite different.
For example, workers are eligible for workers’ compensation benefits from their first day of employment. By contrast, Social Security benefits are paid only to workers who have a long work history and can prove disability.
Also, in contrast to SSD benefits, workers’ compensation provides benefits for both short-term and long-term disabilities. The program also pays for partial and total disabilities. However, workers’ compensation benefits only cover disabilities arising out of the course of employment. Social Security benefits cover all physical and mental conditions, whether they began on the job or not.
THE CONTRAST BETWEEN SSD BENEFITS & WORKERS’ COMPENSATION BENEFITS
SSD benefits are paid only to workers who have long-term medical conditions that preclude all gainful work. Benefits pay out regardless of whether the condition arose on or off the job.
By law, SSDI benefits are paid only to workers who are unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental condition that will last at least a year or result in death.
The medical condition has to be so severe that the worker is not only unable to do his or her previous work, but is also unable to do any other type of work. Social Security benefits begin after a 5-month waiting period.
Workers’ compensation and other public disability benefits may offset or reduce your SSDI benefits. However, disability payments from private sources, such as private pensions or private insurance benefits, do not affect your Social Security Disability Insurance (SSDI) benefits.
Additionally, other public disability payments may affect your monthly Social Security benefits. For example, unemployment benefits can count against you. Federal, state, or local government agencies make these payments. Examples include civil service and state temporary disability benefits. It also includes state or local government retirement benefits that are based on disability.
If you receive workers’ compensation or other public disability benefits, and you also receive SSDI benefits, then your SSDI benefit will be lower. The reason for this is by law, the total amount of these benefits cannot exceed 80% of your average current earnings before your disability.
PUBLIC BENEFITS THAT DO NOT AFFECT YOUR SSD BENEFITS
Your monthly SSD benefits will not reduce if you receive certain types of public benefits. The following benefits do not reduce your SSD benefits:
- Veterans Administration benefits that are service-connected.
- State and local government benefits, if Social Security taxes were deducted from your earnings.
- Supplemental Security Income (SSI).
Specifically excluded from offset provisions are all Department of Veterans Affairs’ benefits. Additionally, needs based benefits and federal, state, or local disability benefits that are based on employment that was covered by Social Security are also not part of the offset rules. Finally, they also cannot subtract private pension or private insurance benefits.
Medical and legal expenses incurred by the you (the worker) in connection with workers’ compensation may also be excluded when computing any offset.
SETTLEMENT OF WORKERS’ COMPENSATION CLAIMS
When a workers’ compensation claim is settles, the language of the settlement contract can control the Social Security disability offset. Your workers’ compensation attorney should write the settlement agreement to be in your favor. Typically, this means that the agreement states the SSA should calculate any offset for the lifetime of the worker.
You can exclude payments for legal fees, medical expenses, future medical expenses, and skilled home health care. These type of payments may be excluded from the gross workers’ compensation settlement when calculating the offset. See Social Security Administration, Program Operations Manual System §DI 52001 and 20 CFR § 404.408. Medical expenses paid by Medicare are not excludable. Furthermore, you must document any expenses or fees or the SSA will not allow the deduction of the fees and expenses from the workers’ compensation payments.
In most states, SSDI is offset by the amount necessary to reach the 80 percent cap. However, in certain states it is the workers’ compensation payment that is reduced. You need to determine how this affects you considering the state you live in.
FIGURE OUT YOUR REDUCTION IN SSD BENEFITS
Your monthly SSD benefits, including benefits payable to your family members, are added together with your workers’ compensation or other public disability payments.
The SSA then considers three factors to determine your offset:
- (1) the claimant’s monthly workers’ compensation benefit;
- (2) the claimant’s monthly SSD benefit; and
- (3) the claimant’s average current earnings (ACE).
If the total amount of these benefits exceeds 80% of your average current earnings, then the excess amount is offset from your Social Security benefit. Your Social Security benefit will be reduced until the month you reach your full retirement age. Or, the month your other benefits stop, whichever comes first.
HOW TO DETERMINE YOUR AVERAGE CURRENT EARNINGS
The 1965 Social Security Amendments requires that Disability Insurance benefits be reduced when the worker is also eligible for periodic or lump-sum workers’ compensation payments.
The combined amount of workers’ compensation and Social Security benefits does not exceed 80 percent of the worker’s average current earnings. The combined payments after the reduction, however, will never be less than the total amount of SSDI benefits before the reduction. The definition for the average current earnings are the highest of:
- average monthly wage on which the unindexed disability primary insurance amount is based,
- the average monthly earnings from covered employment and self-employment during the highest 5 consecutive years after 1950, or
- average monthly earnings in the calendar year of highest earnings from covered employment during the 5 years ending with the year in which disability began.
Total earnings, including those above the Social Security taxable maximum, determine your average current earnings.
The intent of the offset provision is to ensure that the combined benefits from workers’ compensation and Social Security are not excessive. Benefits for a worker’s spouse or children are offset before the offset applies to the worker’s benefit.
Under the 1965 law, the Social Security benefit will not offset if the state workers’ compensation law provides for a reverse offset (a reduction of the workers’ compensation benefit of a worker also receiving Disability Insurance).
REPORT ANY CHANGES IN WORKERS’ COMPENSATION PAYMENTS
The SSA has different formulas to calculate your average current earnings. Which formula they use depends on your specific circumstances. Contact the SSA for information about how they calculate your average current earnings. You can reach them online at the SSA website. If there is a change in the amount of your other monthly payment, or if those benefits stop, let us know.
If the amount of your workers’ compensation or other public disability payment increases or decreases, then contact the SSA. Any change in the amount of these benefits may affect the amount of your Social Security benefits.
If you get a lump sum workers’ compensation or other disability payment in addition to, or instead of a monthly benefit, the amount of the Social Security benefits you and your family receive may change. Let the SSA know right away if you receive a lump sum disability payment.
LUMP-SUM WORKERS’ COMPENSATION BENEFIT
The offset rate should be in the language of your lump sum workers’ compensation settlement. Typically, what is the best offset for you is when the benefit rate is based on your projected life expectancy. If not (or if Social Security determines the rate is unreasonable), the agency will use other methods to calculate the figure.
For example, the rate can be based on your periodic workers’ compensation payment before the settlement, if you were getting one. Likewise, the calculation can use your wages before your injury or before you became ill. Similarly, it is possible for the SSA to use the legally set maximum workers’ compensation rate in your state.
The offset continues until the prorated “payments” reach the settlement amount or you reach full retirement age. At that point your SSDI benefit switches to a retirement benefit. After that change, the offset no longer applies.
APPLY FOR SSD BENEFITS ONLINE
The most convenient way to do apply for benefits is to visit the Social Security website. There, you can obtain information and use their online services. You can apply for benefits and find the SSA rules. Also, you can get answers to common questions. You can find out how much your monthly SSD benefit is online too.
We recommend filing for benefits with the help of your SSD lawyer. Even though the SSA denies 70% of all SSD and SSI claims, we still win most of our cases. We win SSD & SSI cases because we understand the law.
Also, we know what medical evidence the SSA needs to grant your ongoing SSDI benefits. Additionally, our lawyers and staff work with you to build your case. Consider us to be part of your team. You need a legal team on your side.
In the past 30 years, our Salt Lake City based Social Security attorneys have won benefits for over 20,000 clients. We have also won over $100 million in back due and ongoing SSDI and SSI benefits for our clients.
When you hire an attorney, you want one you can trust. You can trust the lawyers and staff at Cannon Disability Law. With our team approach and our years of experience, you can trust us to fight for your benefits. We will also make sure to get the most from your benefits, including workers’ compensation benefits. Give us a call. Put our experience to work for you. You can also contact Cannon Disability Law online.
CANNON DISABILITY LAW’S ATTORNEYS AND STAFF
If you want to learn more about the representatives at Cannon Disability Law you can go to our About Us page. For example, Andria Summers can help you with your Medicare plan. She has also won thousands of SSD and SSI cases. Dianna Cannon has been representing disability claimants for thirty years. Brett Bunkall also has significant experience helping people obtain their SSI and SSD benefits. We are experts. You can trust us to help you receive SSD and SSI benefits.
In the past 30 years, we have won over 20,000 SSDI and SSI cases for our clients. Also, we help our clients get all of their Medicare benefits. Our specialists can help you apply for disability benefits using the SSA’s website. However, we will need your help to apply for SSI benefits. Why? Because only you know your personal financial information. SSI benefits require you to have minimal assets and low monthly income.
Likewise, if you need an appeal, we can help you do that too. There are also many forms you will need to fill out. But, don’t worry. If you have questions about these forms, we will answer them. You can learn more about SSA’s appeal forms here. Call us for free today.
CANNON DISABILITY LAW WORKS ON A CONTINGENCY FEE BASIS
If you have a workers’ compensation claim or Social Security Disability case, you should hire an attorney. An attorney can help you with your Social Security benefits case. In order to hire Cannon Disability, all you need to do is call or contact us. We offer a free review of your case. And, it doesn’t cost anything to call us.
Better yet, it also doesn’t cost you any upfront money to hire us. Why? Because you only pay us an attorney fee if we win your case. This is a contingency fee. It means if we win your SSD case, you pay the attorney fee out of your back benefits. If you do not win, there is no attorney fee to pay.
The attorney fee has a cap or a limit. The SSA sets the limit of the attorney fee at 25% of the back benefit or the maximum attorney fee cap, whatever is less.
If there are costs in your case, then you pay those. But usually those costs are less than $100. Once we win your case, the attorney fee comes from your back benefit. But, to hire most lawyers, you have to pay upfront. We don’t work like that. You don’t have a job. So, the only way to pay us, is for us to win your case. That is our goal. Call and see what we can do for you.
Additionally, we represent clients in many states, including Nevada, Utah, Idaho, and California. Find out more information about Nevada disability benefits here. Learn more about Utah disability benefits and California disability benefits here. We have information about Idaho disability benefits here. No matter where you live, we will answer your questions about workers’ compensation benefits. We want to be your legal team.