As a result of a work-related illness or injury, individuals may be eligible to receive both Social Security disability benefits and workers’ compensation benefits. However, it is important to know that workers’ compensation and other public disability benefits may reduce Social Security benefits. However, disability payments from private sources, such as private pensions or insurance, will not offset Social Security disability benefits.
The rules of worker’s compensation offsets are complicated and it is often advantageous to contact a workers’ compensation attorney for assistance. For 110 years, Powell Law has litigated Pennsylvania workers compensation actions and obtained benefits for injured Pennsylvania workers.
Public disability benefits such as those awarded for workers’ compensation reduce Social Security benefits. Workers who receive workers’ compensation benefits are paid as a result of a job-related injury or illness. Social Security Disability Insurance (SSDI) benefits must be reduced to a total monthly amount that is no more than 80% of the “ACE” (Average Current Earnings) a worker earned when fully employed. SSDI is combined with workers’ compensation benefits and to the extent that the total exceeds 80% of a worker’s ACE, benefits may be offset.
Public disability payments for medical conditions unrelated to employment may also affect Social Security benefits. Examples include state and local government retirement benefits and civil service disability benefits.
Examples of public benefits that do not reduce or offset Social Security benefits include Supplemental Security Income (SSI) and Veterans Administration benefits. Another example is state and local government benefits if Social Security taxes were deducted from earnings.
Note that the total amount of monthly Social Security disability benefits includes benefits payable to family members. If this sum when added to any workers’ compensation or other public disability payments exceeds 80 percent of average current earnings, the Social Security Administration (SSA) will deduct the excess amount from Social Security benefits.
Many workers’ compensation claimants settle their cases by exchanging any entitlement to monthly worker’s compensation benefits for a lump sum payment. The SSA takes into consideration any lump sum settlement of workers’ compensation benefits and calculates a monthly benefit amount from the lump sum award. Settlement agreements must clearly include necessary language to minimize any offset of Social Security benefits. An experienced workers’ attorney may provide assistance to all recipients of both types of benefits in this situation.
Powell Law has litigated Pennsylvania workers compensation actions and obtained benefits for injured Pennsylvania workers in the Scranton/Wilkes-Barre area for over a century. Consult an experienced Pennsylvania workers’ compensation attorney. Contact Powell Law at (570) 961-0777. The consultation is FREE!
