Disabled workers many times become disabled on the job, when this happens they are potentially eligible for worker’s compensation benefits as well as Social Security disability benefits.
Although a disabled worker is potentially eligible for both types of benefits, these are two separate entities that have to be applied for individually. Because both types of benefits are considered public disability benefits, they do have an effect on one another, which most people do not realize. Worker’s compensation benefits are paid by federal or state worker’s compensation agencies, employers or by insurance companies on behalf of employers.
If a person is already receiving worker’s compensation payments and qualify for Social Security disability payments, Social Security payments will be offset from what they receive in worker’s compensation payments. The rules are that worker’s compensation benefits and Social Security cannot exceed 80 percent of a person’s earnings before a person becomes disabled.
For example: If a worker makes $50,000 before being disabled, their combined worker’s compensation and Social Security disability cannot exceed $40,000.
There are other types of disability payments and benefits that do not impact Social Security disability benefits. Some examples of these include Veteran’s Administration benefits, state and local government benefits (if Social Security taxes were deducted from earnings) and Supplemental Security Income (SSI).
The amount someone is eligible for in Social Security disability benefits is dependent on their earnings. Social Security uses different formulas to calculate someone’s average current earnings. The formula Social Security uses is dependent on individual circumstances.
If you have specific questions related to how Social Security determines what formulas to use and how your public disability benefits may be impacted, it is best to contact Social Security directly. You can visit Social Security online at www.ssa.gov or call them toll free 1-800-772-1213.
