When you suffer a job-related injury that leaves you unable to work – whether temporarily or permanently, and whether partially or totally – you are potentially eligible to receive financial compensation from multiple sources. Two of the main sources are: (i) workers’ compensation, and (ii) Social Security disability (SSD).
However, when seeking compensation from multiple sources, you must be careful to ensure that you are not unnecessarily limiting your total benefits by doing so. As explained by the U.S. Social Security Administration (SSA):
“Disability payments from private sources, such as private pensions or insurance benefits, don’t affect your Social Security disability benefits. Workers’ compensation and other public disability benefits, however, may reduce your Social Security benefits. . . .”
“Other public disability payments that may affect your Social Security benefit are those paid by a federal, state, or local government and are for disabling medical conditions that are not job-related. Examples are civil service disability benefits, state temporary disability benefits, and state or local government retirement benefits that are based on disability.”
Workers’ Compensation Payments Offset SSD Benefits Based on “Average Current Earnings”
When determining whether – and to what extent – your workers’ compensation payments will offset your Social Security disability benefits, you need to focus on your “average current earnings.” As the Social Security Administration explains:
“If you receive workers’ compensation . . . AND Social Security disability benefits, the total amount of these benefits can’t exceed 80 percent of your average current earnings before you became disabled.”
In other words, if your combined workers’ compensation and SSD benefits exceed 80 percent of your “average current earnings,” then your SSD benefits will be reduced so that your total benefits fall below this threshold.
The concept of “average current earnings” is explained in the SSA’s Social Security Handbook. The relevant language appears in Section 504.3:
“Average current earnings” is the highest of: (A) Your average monthly wage upon which your un-indexed disability primary insurance amount is based . . . ; (B) Your average monthly earnings from covered employment and self-employment during the highest five years in a row . . . ; or (C) Your average monthly earnings based on the single calendar year of highest earnings from covered employment. This single calendar year can be the year that your disability began or any of the five years immediately [preceding] the year your disability began.”
“‘Covered’ employment (also known as covered wages, or covered service) is employment on which Federal Insurance Contribution Act (FICA) taxes are paid.”
Of course, if you are not familiar with your “un-indexed disability primary insurance amount,” or if you don’t have access to all of your income records from the past five years, this isn’t going to help you much. In order to determine their “average current earnings,” most injured workers need to seek help from an experienced disability attorney.
How Can You Reduce Your Social Security Disability Offset?
Another crucial way a disability attorney can help you is by taking advantage of the mechanisms that are available to reduce your SSD offset. There are various ways that this can potentially be done, although your attorney will need to carefully review your benefits and your employment history to determine which option (or options) make the most sense for you. For example, some of the strategies that can be used to minimize the SSD offset due to receiving workers’ compensation benefits include:
- Deducting Expenses from Your Workers’ Compensation Benefits – The SSA allows you to deduct medical bills and certain other expenses from your workers’ compensation benefits for the purposes of calculating whether your combined benefits exceed the 80-percent threshold.
- Spreading Out Workers’ Comp Settlement Payments – If you receive a large lump-sum workers’ comp settlement, this could take care of the entire 80-percent you are entitled to collect. By spreading out your settlement payments, you can collect the same amount of workers’ comp benefits while also retaining your SSD eligibility.
- Claiming Social Security Retirement Benefits Instead of SSD – If you are nearing retirement, you may be able to claim Social Security retirement benefits early instead of claiming SSD. Unlike SSD, Social Security retirement benefits are not offset by workers’ compensation payments.
Discuss Your Options with a Trusted Disability Attorney
If you have been seriously injured at work and would like more information about maximizing your workers’ compensation and Social Security benefits, we encourage you to contact us for a free initial consultation.
With exceptional legal credentials and experience, the hard working attorneys at Petro Cohen, P.C. are dedicated to providing our clients the highest quality of legal service available. Our lawyers and staff share a passion for winning and an uncompromised commitment to every client we represent.
Petro Cohen, P.C. is a full-service workers’ compensation, personal injury, and Social Security disability, law firm with more than 200 years of combined experience. The practice is limited to these three areas in order to provide you with the highest quality of legal service available. And with both workers’ compensation and Social Security disability attorneys on hand, you can rest assured that our knowledgeable and experienced attorneys will fight to get you the benefits you need and the compensation you rightfully deserve.
Our respected attorneys maintain impeccable credentials, and have an excellent reputation for assisting clients with all types of disability claims. We have thousands of satisfied workers’ compensation, personal injury, and Social Security disability clients who tell our story best. To learn what our clients have to say about their experience with the law firm, we encourage you to visit our Web site to view numerous Client Testimonials.
For your free consultation at one of our four southern New jersey offices (Northfield, Cherry Hill, Cape May Court House, or Hamilton), call us today to speak with a workers’ comp or disability attorney at Petro Cohen. We can be reached by phone at 888-675-7607, via e-mail at info@PetroCohen.com, or 24/7 via live chat on our Web site: PetroCohen.com Remember, when you need legal representation, Select Excellence!