SSDI and Workers’ Comp
Social Security Disability Insurance, or SSDI, and workers’ compensation both provide financial assistance to those who can’t work due to a disability. In some cases, you can collect both SSDI and workers’ compensation benefits simultaneously. However, the amount you receive from workers’ compensation can affect your SSDI payments. Additionally, each program has different eligibility rules, so a disability that qualifies for one may not qualify for the other.
Can I Receive Workers' Comp and SSDI?
Yes, you may be eligible to receive SSDI and a workers’ comp settlement simultaneously. However, receiving workers’ compensation may reduce your SSDI benefits.
If you receive both workers’ compensation and SSDI benefits, the combined amount of both benefits cannot exceed 80 percent of your average earnings before you become disabled. If the total amount of both benefits exceeds 80 percent of your average pre-disability earnings, the excess will be deducted from your SSDI payments. You will still receive both benefits, but your SSDI benefits will be reduced. Your workers’ compensation payments will remain unchanged.
Calculating the Workers' Comp Offset
Let’s say you earned an average of $3,000 per month before you became disabled. Eighty percent of your previous income would be $2,400.
In this scenario, you are eligible for monthly SSDI payments of $1,650. You also receive $1,500 per month from workers’ compensation. This adds up to $3,150 between both benefits.
Because that exceeds the 80 percent threshold—$2,400—your SSDI payments would be reduced by $750, which is the difference between the total and 80 percent of your pre-disability earnings. Your new monthly SSDI payment would be $900—this is the maximum SSDI amount you would be eligible to receive while collecting your full workers’ compensation payment.
States That Offset Workers' Comp Benefits
Congress enacted the federal law establishing the Social Security offset for workers’ compensation benefits. However, some states have laws that reduce workers’ compensation payments when the worker is also receiving Social Security disability benefits. These are known as reverse offset laws.
A 1981 federal law eliminated the states’ option to adopt reverse offset laws. However, 14 states already had such laws in place. Those states were exempted from the 1981 law, allowing them to keep the reverse offsets in place. Those states are:
- Alaska
- California
- Colorado
- Florida
- Louisiana
- Minnesota
- Montana
- New Jersey
- New York
- North Dakota
- Ohio
- Oregon
- Washington
- Wisconsin
If you live in any of those states and collect both types of benefits, your workers’ compensation benefits—not your SSDI payments—will be reduced in accordance with the applicable reverse offset laws.
Difference Between SSDI and Workers' Comp
SSDI is a federal program that provides financial benefits to disabled workers under retirement age. Eligible recipients must be unable to earn a sufficient income because of a disability. To qualify for benefits, the worker must have worked and paid a sufficient amount of Social Security taxes.
You may be eligible for SSDI benefits whether or not your disability arose from a workplace injury. You may also continue to work while receiving SSDI as long as your income does not exceed a certain threshold. SSDI is a long-term financial solution for disabilities expected to last at least one year or result in death.
On the other hand, workers’ compensation is an employer-provided insurance program for job-related injuries. It replaces a portion of your wages and covers your medical expenses if you suffer an injury on the job that affects your ability to work. It may also provide permanent disability benefits if the workplace injury affects your ability to work long-term.
The rules for workers’ compensation eligibility and benefits vary by state, but you are usually not allowed to work full-time while receiving benefits. However, most states have programs that allow you to return to work with restrictions while you recover from your injury or illness. These policies often cover the difference in wages from before the onset of the injury or illness.
Unlike SSDI, you do not need to accumulate a certain amount of work credits to qualify for workers’ comp benefits—you are covered under workers’ compensation insurance from your first day on the job.
What Happens if You Don't Let the SSA Know About Your Workers' Comp?
The Social Security Administration requires you to report changes in the amount of any disability payments you receive in addition to SSDI, including workers’ compensation. You must also report any new workers’ compensation settlements to the SSA.
If the SSA discovers you have been receiving both workers’ compensation and SSDI benefits without reporting it, it may require you to repay any overpaid SSDI benefits. You may also have to pay penalty and interest fees on the overpaid amount.
Additionally, hiding your workers’ compensation benefits from the SSA may result in suspension or termination of your SSDI benefits. If you continue receiving SSDI payments, the SSA may reduce your benefits to offset the amount you receive from workers’ compensation.
How To Maximize Your SSDI Payments When Receiving Workers' Comp Settlement
Even though workers’ comp can reduce your SSDI benefits, there are ways to maximize your SSDI payments while receiving workers’ compensation. If you settle your workers’ compensation case, you can negotiate your settlement agreement’s terms to reduce the impact on your SSDI payments. Here are some examples of how you can structure your workers’ comp settlement to maximize your SSDI payments:
- Exclude certain expenses from your workers’ compensation settlement, such as attorney fees and medical expenses, from your SSDI offset calculations.
- Spread your workers’ comp payments over an extended period to reduce the impact on your SSDI benefits.
- If you are 62 years or older, you can opt to take Social Security retirement benefits instead of SSDI since workers’ compensation affects Social Security retirement benefits differently.
Consult a skilled and knowledgeable workers’ compensation lawyer before settling your case. It’s best to have representation during the settlement negotiations. They can help you determine the most favorable terms for your situation and negotiate a settlement that minimizes the impact on your SSDI benefits.
Can I Still Receive SSDI if My Workers' Comp Was Denied?
In short, yes. Workers’ compensation denials occur for various reasons, such as if your injury did not occur at work or your disability has resulted from a pre-existing condition. Workers’ compensation is only for disabilities that result from work-related injuries or illnesses. Meanwhile, disabilities do not need to be work-related to qualify for SSDI.
If the workers’ compensation insurer denies your claim because it disputes that your disability is work-related, you may still be eligible for SSDI. Likewise, if your workers’ compensation denial resulted from missed workers’ comp deadlines, you still can qualify for SSDI because such deadlines do not apply.
A denied workers’ compensation claim may sometimes indicate that you’ll have trouble qualifying for SSDI benefits. For instance, if the workers’ comp denial results from a finding that you are not disabled, your condition may not be sufficient for eligibility for SSDI benefits. However, the SSA will evaluate your disability in a process separate from workers’ compensation, and the criteria and evaluation depth are unique to each program.
Need Help Getting SSDI?
If you have a disability that prevents you from working and you are not currently receiving SSDI, we’re here for you. Our team will connect you with a disability advocate who can help you understand your eligibility and guide you through your next steps. Contact Disability Advice today to get started.
- Free case evaluation
- Assist with denied claims
- Ensure you have all documents
- Make the process easy for you
- Can I Receive Workers' Comp and SSDI?
- Difference Between SSDI and Workers' Comp
- What Happens if You Don't Let the SSA Know About Your Workers' Comp?
- How To Maximize Your SSDI Payments When Receiving Workers' Comp Settlement
- Can I Still Receive SSDI if My Workers' Comp Was Denied?
- Need Help Getting SSDI?
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