Are You Disabled from a Workplace Injury?
If you were injured at work, plan carefully before signing any settlement agreement for a workers' compensation claim. Your eligibility for Social Security Disability benefits is affected by your receipt of Workers' Compensation benefits.
Workers' Compensation and Social Security Disability Benefits are related to each other. When a person has collected Workers' Compensation, the Government calculates an offset before it pays any Social Security Disability Benefits to a disabled worker. To understand the "Offset," let's take the example of an injured worker named John, who decides to settle his workers' compensation claim and take a lump sum of money. In this example, John will be totally disabled for at least twelve months, so he could qualify to receive Social Security Disability benefits.
Before the government pays any Social Security Disability benefits to John, they will pro-rate John's lump sum settlement, and figure out how much workers' compensation money John would have been paid every month, if his settlement had not been paid in a lump sum.
Then, Social Security figures out what John was earning before he became disabled. This figure is called the Average Current Earnings, or "ACE." Under complex regulations governing the reduction of Social Security Disability benefits, Social Security will reduce John's Disability Benefits so that the combination of his Workers' Compensation and Social Security Disability does not add up to more than 80% of his Average Current Earnings.
In other words, if the pro-rated lump sum settlement from workers' comp. figures out to be greater than John's Average Current Earnings, he will get zero Social Security Disability benefits. This can cause serious problems years after a lump sum settlement is finalized, if John exhausts his resources from Workers' Compensation, and his insured status for Social Security Disability benefits has expired.
Some seriously injured workers have disqualified themselves from Social Security Benefits, because their Lump Sum Agreements were not properly written.
It is essential that injured workers who are considering Lump Sum Settlements ask questions that might help to preserve their eligibility for Social Security Disability. Will there be any future medical bills? Are there any past medical bills which have not been paid by Workers' Compensation? Is there a spouse who has suffered as a result of the worker's injury? Will household renovations or improvements be needed to accommodate a disability? I can protect your rights if your disability is the result of a workplace injury or illness.
If you are referred to us by a worker's compensation lawyer, we will work with your comp lawyer to protect your interests and coordinate your settlement with your SSDI benefits. By limiting our practice to government benefits eligibility benefits and Social Security Disability, your disability claim gets our full attention; it's not a side issue for us.