Social Security Disability and the Effects of Workers’ Compensation

Anyone receiving both Social Security Disability and Workers’ Compensation may have a reduction in benefits. The total amount of both benefits cannot exceed 80% of the average current earnings before the disability occurred. A Social Security claims Chicago attorney can help minimize this reduction.

Public Disability Benefits Can Impact Social Security

Disability payments from private sources do not impact Social Security Disability (SSD). This may include insurance payments and private pensions. Veterans Administration benefits and Supplemental Security Income do not decrease SSD benefits.

Public disability, including workers’ compensation, can reduce the amount of SSD. Other payments that may affect benefits include:

  • Civil service disability
  • State temporary disability
  • State or local retirement benefits based on disability
  • Payments made by insurance companies on behalf of the employers

Calculating the Reduction

Monthly Social Security benefits will be added to any other public disability benefits. This includes benefits payable to family members. The total amount of the benefits cannot exceed 80% of the average current income.

For example, before an accident a worker made around $3000 each month. The worker is injured at work and now receives $1200 each month for workers’ compensation. The worker files for SSD and is eligible for $1600 a month. However, the worker would not receive the full $1600 payment. The most the worker could receive is $2400 total (80% of $3000).

The worker in this example should be paid $2800 ($1200 for workers’ compensation and $1600 for SSD) each month. Due to the 80% cap, the worker would be losing out on $400 each month.

Minimize Deduction and Maximize Payment

Figuring SSD benefits can be complex. A Social Security claims Chicago lawyer can help minimize the deduction and maximize the payment amount. Every worker should receive all of the benefits they have earned.

To minimize the deduction, it is important to understand the rules in place regarding Social Security Disability. Exclusions for some expenses can be utilized. These expenses include medical payments, rehabilitation costs and legal fees.

A worker may receive a lump-sum settlement for workers’ compensation. The settlement agreement should state that the amount is intended to be spread out over the person’s lifetime. This could lower or eliminate the reduction amount.

The original settlement agreement must include an amortization provision, which states that the payment is spread out. Amending or adding terms to an existing settlement is not possible. The settlement must be correctly written or SSD benefits may be reduced.