Carter Craig, Attorneys at Law

How does workers' compensation affect Social Security Disability?

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Throughout the United States, including Virginia, anyone who receives Social Security Disability Insurance benefits has met federally mandated eligibility criteria indicating that they are disabled and unable to work. Some of these recipients also receive disability benefits from other sources, including workers' compensation funds in their state and other public benefits. When these additional disability benefits are from certain public entities or meet other conditions, they will not affect the amount of Social Security Disability Insurance that the disabled person will receive. Benefits from workers' comp and certain other funds, however, will lower SSDI benefits, at least in the short term.

Who is entitled to workers' compensation benefits? Anyone who contracted an illness or was injured on the job and is now unable to work can receive benefits paid by state workers' compensation agencies or insurance companies on behalf of the company that employed the individual.

How does the SSDI reduction work? Any amount of income and benefits above 80 percent of the person's average annual income before his or her disability lowers the monthly SSDI benefits that he or she will receive. The total income figure also includes benefits received by family members and public disability benefits. Excluded, however, are veterans' benefits and any government benefit on which the worker pays Social Security taxes.

For instance, if a worker earned $4,000 a month before disability, his or her entitlement, assuming that he has a spouse and two children, would be $2,200 per month. If the worker received $2,000 in workers' compensation, then his or her SSDI benefits would be reduced by $1,000 to lower the total amount of benefits to below 80 percent of annual earnings before disability.

More information about how the Social Security Administration calculates earnings and changes in disability payments from workers' compensation benefits, for example, is available online. All income changes should be reported immediately to the SSA.

Source: Social Security Administration, "How Workers' Compensation And Other Disability Payments May Affect Your Benefits," accessed Jan. 27, 2015

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