Because worker’s compensation benefits and Social Security disability benefits involve injuries or conditions that lead to the inability to maintain gainful employment, sometimes a disabled worker collects benefits from both programs.
In fact, in 2003, Social Security estimated that of the 7.6 million beneficiaries collecting Social Security Disability Insurance (SSDI) benefits, about 17 percent had some connection to worker’s compensation or public disability benefits.
Social Security is a federally regulated public disability program, while worker’s compensation differentiates based on what state you live in, but if you apply and have been approved to receive benefits for both types of benefits, there are rules related to this.
The Social Security Administration, in 1965, instituted rules requiring SSDI benefits to be reduced when the recipient also receives periodic or lump-sum worker’s compensation benefits, so the combined amount of worker’s compensation and SSDI payments do not exceed 80 percent of the worker’s average current earnings.
The intent of the provision, according to Social Security, is to ensure that the combined benefits from worker’s compensation and Social Security are not “excessive.” Medical and legal expenses incurred by the worker in connection with worker’s compensation may be excluded when it comes to computing offset amounts.
Although with this type of news, some may wonder whether it is worth it to apply for both worker’s compensation and Social Security disability benefits, there are potential consequences when they don’t. When an applicant applies for both programs and is approved, the recipient is going to collect a higher payment than if they receive benefits from just one of the programs. In addition, failure to apply for Social Security disability benefits within a specified time period can weaken the strength of a case and delay the time period in which they would become eligible for Medicare benefits.
To learn more about how these two programs impact each other click here.
