The short answer is YES, you can collect Social Security Disability Insurance (SSDI) and Workers’ Compensation at the same time. This is a common situation faced by injured workers. When a Workers’ Compensation injury is serious enough to keep someone from working for a long time, they may struggle not only medically, but financially. Collecting Workers’ Compensation and SSDI together can bring injured workers a better sense of financial security and stability. Most of our clients who collect both Social Security Disability and Workers’ Compensation receive more money overall than clients who have one or the other.
If you are receiving Workers’ Compensation and it appears as though you will be out of work for at least twelve months, it usually makes sense to apply for SSDI. Your doctor’s medical reports, as well as any documents from the Workers’ Compensation Board, should be provided to the Social Security Administration (SSA) during the application process. Social Security uses its own rules, however, so a “disability” in Workers’ Compensation does not automatically qualify you for SSDI. Similarly, the Workers’ Compensation Board does not consider your eligibility to receive SSDI when calculating your disability.
How does Workers’ Compensation affect my Social Security Disability payments?
The SSA will set a limit on your monthly SSDI payments if you are receiving Workers’ Compensation. If you receive Workers’ Compensation and SSDI benefits, the total amount of these benefits cannot exceed 80% of your average current earnings before you became disabled. Your average current earnings (“ACE” rate) are determined by SSA when you apply for benefits using one of many formulas. The easiest way to find out your “ACE” rate is to call SSA and ask.
For example: Before you became injured, you were earning $4000 per month at work. You would be eligible for about $2200 per month in SSDI benefits. You are receiving Workers’ Compensation at your 75% disability rate, which would be $461.54 per week, or $2000 per month. Because the total amount of benefits you would receive ($4200) is more than 80% ($3200) of your average current earnings ($4000), your SSDI benefits would be reduced by $1000 per month ($4200 – $3200).
Notably: SSDI benefits are always the payments reduced to account for the 80% limit. Workers’ Compensation payments do not change based on Social Security Disability. However, we often use SSDI payments to help us determine whether to litigate payment issues in Workers’ Compensation. If any increase in Workers’ Compensation benefits is simply going to result in a reduction of SSDI, we might avoid litigating that issue. Instead, we’ll focus our attention on obtaining medical care or obtaining a longer duration of payments.
You should always let the SSA know if there is a change in your Workers’ Compensation payments so they can calculate the proper SSDI payments. If you do not, SSA could overpay your SSDI and your SSDI benefits could be suspended to collect that overpayment. The easiest way to let the SSA know your Workers’ Compensation status is to give the SSA a copy of each Workers’ Compensation decision.
Social Security stops reducing your SSDI payments when you reach your Social Security “full retirement age.”
What if I settle my Workers’ Compensation claim while receiving Social Security Disability benefits?
For many injured workers, a Section 32 settlement of their Workers’ Compensation case makes sense, especially if they are receiving SSDI and Workers’ Compensation at the same time. A Section 32 settlement can pay you a lump sum of money, and SSDI payments will continue as a backup.
It is important to know, however, that the Social Security Administration does not stop reducing your benefits due to Workers’ Compensation, simply because you get a lump sum instead of weekly checks. The SSA will continue to assume you are receiving Workers’ Compensation, and they might do so in a way that reduces your SSDI benefits below where you think they should be.
Workers’ Compensation Section 32 agreements can be written to prorate your lump-sum settlement over your entire lifespan. If this is done properly, in some cases SSA will increase your payments after you receive a Workers’ Compensation Section 32 settlement. That is because they will calculate that your weekly Workers’ Compensation payments have decreased.
For example: The injured worker from the example above was receiving $461.34 per week in Workers’ Compensation ($2000 per month), and his SSDI benefits were reduced by $1000 per month to offset those payments. He settles his Workers’ Compensation claim for $135,000. He is 38 years old, meaning he has a life expectancy of about 40 years. If proper language is included in his Section 32 settlement, Social Security will prorate his settlement over the 40 years, at $281.25 per month. Now, because his $2200 per month in SSDI, plus $281.25 per month in Workers’ Compensation, is less than 80% of his average current earnings ($3200), his SSDI will no longer be reduced. His SSDI will increase to his maximum amount.
However, this sort of prorating language is not included by insurance carriers in Section 32 agreements and needs to be drafted by your attorney. If the language is incorrect or incomplete, the SSA might reject the proration and interpret your Workers’ Compensation settlement incorrectly. This might result in your SSDI payments staying the same, or even decreasing, as a result of your Workers’ Compensation Section 32 settlement.
Should I have an attorney help me with Social Security Disability and Workers’ Compensation?
There are complicated issues that occur when injured workers apply for, or receive, both Social Security Disability and Workers’ Compensation benefits.
An attorney will help you:
- Obtain medical records and other documents that need to be shared from one claim to the other.
- Make sure both systems have the proper information about your status in the other.
- Work to prevent interactions between the systems that cause your payments to be reduced or suspended.
- Maximize your overall benefits.
By helping you with these issues and more, an attorney can put you in the best possible position to continue supporting your family, even while you are unable to work.
Lewis & Lewis, P.C. represents people in both Workers’ Compensation and Social Security cases. In many cases, your Workers’ Compensation and Social Security claims can be handled by the same attorney in our firm. Our dedicated team of professionals has decades of experience navigating these two complex systems. We offer a free initial consultation with no obligation, and we never collect a fee unless we win you money.