Are You Disabled from a Workplace Injury? Do NOT Settle with Workers’ Comp Until You Understand Your Social Security Disability Benefits.
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.
Social Security Disability has its own special rules for deciding your case. There is no such thing as a “partial disability” or a “percentage of disability” with Social Security. The regulations require that your impairments prevent you from doing ANY kind of work that a person of your age and education could be expected to do. And, your impairment must result from anatomical, physiological, or psychological abnormalities that Social Security claims workers can see in ” medically acceptable clinical and laboratory diagnostic techniques.” Social Security Disability Insurance is different than a private short term or long term disability plan provided by your employer. SSDI is also very different than Workers Compensation. Make sure you understand the different sources of disability income:
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Private Long Term
or Short Term Disability Plan |
Workers Compensation
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Social Security Disability
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Depending on the insurance contract, pays you cash benefits if you can not do the job you were doing when you became disabled.
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Pays you cash benefits if you can not do the job you were doing when you became disabled. The workers comp insurance company may award cash benefits based on a percentage of disability, depending on how severely you were injured on the job, and how long your injury will hurt you ability to work.
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Pays you cash benefits if you are unable to do any work that is “substantial gainful activity” because of a physical or mental impairment
which has lasted or is expected to last for 12 months, or which can be expected to result in death. |
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.