When you're injured on the job, you're entitled to workers' compensation benefits. However, those benefits can reduce the amount of Social Security disability insurance (SSDI) benefits you're paid because the Social Security Administration (SSA) limits the amount of money you can receive per month in combined benefits. Here are two ways you can prevent this from happening.
Opt for a Lump Sum Payment
The maximum amount of SSDI benefits a person can receive from the SSA is either 80 percent of his or her average current earnings or the total family benefit the claimant received the first month of getting SSDI payments, whichever is higher. The agency will decrease your SSDI payments by however much amount your workers' comp payments puts you over this limit.
For instance, your applicable limit is $1,800 per month and you're currently receiving $1,200 in SSDI benefits. If you're awarded $1,000 in workers' comp benefits, your SSDI will be reduced by $400 to keep your total benefits from exceeding $1,800 per month.
One way you can avoid this is to opt for a lump sum payment and stipulate the amount per month the payment is supposed to represent, because the SSA will use this amount to calculate the offset. For instance, your lump sum payment is $25,000. You want to ensure the settlement paperwork states the amount represents a $500 monthly payment for 50 months. If you fail to do this, the agency will use the monthly payment amount you received in the months prior to the settlement to determine how much to reduce your SSDI benefits.
Another way to prevent your SSDI payments from being affected by your workers' comp benefits is to have the agency recalculate your earnings to see if you qualify for a higher income limit. The SSA calculates your average monthly earnings based on
- The average of a single year of your highest earnings, or
- The average of your five highest years of earnings, or
- The average of your un-indexed disability primary insurance amount
Whichever calculation is most beneficial to you is the one the agency will use. You can determine whether or not this is a good option for you before submitting a request by viewing your earnings statements online at the SSA website and
For more information about this issue or help protecting your SSDI payments, contact a social security disability attorney. To find out more, speak with someone like Cohen & Siegel LLP.