Published on: May 10, 2016
If you have a qualifying disability as outlined by the Social Security Administration’s Blue Book and sufficient medical documentation supporting your inability to work as a result of your disability, then you may be eligible to receive SSA disability benefits.
Disability payments, other than SSA disability benefits, that are awarded from private sources including private pensions or insurance benefits will not affect the amount of SSDI benefits you receive. As they are a form of income and SSI is based on income, they will affect your eligibility for SSI and the payment amount you can receive in SSI benefits.
However, if you receive public disability benefits, such as workers compensation, your disability payments may be affected or reduced.
Workers compensation is generally provided to employees who suffer from job-related injuries. This form of compensation may be provided by federal or state workers compensation agencies, employers directly or employers insurance companies.
The 80% Rule
SSA disability benefits are available as a means to ensure a comfortable quality of life to those who are disabled and are no longer able to provide for themselves or their families.
To retain the integrity of SSA disability benefits, there are particular calculations in place to ensure that you do not exceed receiving enough benefits for a good quality of life.
The Social Security Administration has designed an 80% rule stating that if you are receiving public disability benefits, such as workers compensation, then the total amount of your benefits must remain at or below 80% of your average current earnings prior to becoming disabled.
If your average total amount of current earnings is above 80%, then the excess amount will be deducted from your SSA disability benefit. This process is called Worker's Compensation Offset.
For example, if you had average earnings of $2,000 a month prior to becoming disabled, your spouse was eligible to receive $1,200 a month for SSA disability benefits, and you are also receiving $1,000 a month from workers compensation, then the total amount of benefits you would be receiving is $2,200.
$2,200 exceed 80% ($1,600) of your average current earnings of $2,000. Therefore, your family’s Social Security benefits would be reduced by $600 ($2,200- $1,600).
Reaching Full Retirement Age
In 2015, a law was passed that would reduce your Social Security disability benefits until you reach the full retirement age; currently, the full retirement age for those born between 1943 and 1954 is age 66 and for those born between 1960 or later it is age 67.
You are required to inform the SSA if there are any changes in your Workers Compensation or other public disability payments, as those changes can increase or decrease the amount of disability benefits you receive.
Unsure How Your Benefits Will be Affected?
Workers compensation is intended for those who were hurt on the job. SSA disability benefits are intended for those who are unable to provide a decent quality of life for themselves or their family due to a disabling medical condition that interferes with their ability to work.
Private benefits don’t affect your SSA disability benefits; however, some forms of public benefits, such as workers compensation, can affect or reduce your SSA disability benefits.
If you are unsure how your worker's compensation may affect you and your families quality of life and SSA disability amount, contact an expert today.