After sustaining a work injury, you may have questions about how to file a claim or what benefits you are eligible to receive. We understand that navigating your possible benefit options can be confusing and can add further stress to your situation. Many of our clients have asked about the specific differences between workers compensation benefits and SSDI. Knowing the differences can help you understand what you are eligible for after sustaining an injury. An attorney can help answer questions to your case and aid in getting the compensation you deserve.
Are you receiving workers’ compensation benefits? Are you worried about how your workers’ compensation will impact your Social Security benefits? Fortunately, employees can generally receive both workers’ compensation and Social Security benefits.
However, you may not be able to receive each of these benefits in full. Following an amendment of the Pennsylvania Workers’ Compensation Act, today, Pennsylvania employers can reduce an injured employee’s workers’ comp benefits if they are also receiving pension benefits or Social Security benefits.
Before signing up to receive your Social Security benefits, you should be aware of what collecting Social Security retirement benefits could mean for the amount you will continue to receive from your workers’ compensation.
Social Security Disability, Medical Coverage, and Workers’ Comp
If you’ve been injured on the job in Pennsylvania or you have suffered a work-related illness, you may qualify for Social Security Disability Insurance (SSDI) and workers’ comp in Pennsylvania. These are two different benefits programs. SSDI is run by the federal Social Security Administration (SSA) while workers’ compensation is a state program. Understanding the differences between can help you understand which programs can support you during your injury.
You pay into SSDI with every paycheck — it’s automatically deducted from your wages. Your employer pays for your workers’ compensation coverage, and the qualifications for both are different. Depending on your injuries, you may also be covered by your medical coverage or other benefits.
What are the Differences Between Workers’ Compensation and Social Security Disability Insurance (SSDI) Benefits?
If you sustained an injury while on the job workers’ compensation benefits are covered by your employer by law. Pennsylvania’s state law requires all employers to pay for insurance on your behalf as an employee. Your employer may also seek to self-insure under Section 305 of the Workers’ Compensation Act. SSDI benefits, on the other hand, are administered through the Social Security Administration.
One other key difference between SSDI benefits and workers’ comp comes down to what to these programs specifically address. Workers’ compensation offers medical benefits, wage-loss aids and other reimbursements for work-related injuries and medical conditions from which you are expected to recover. SSDI, on the other hand, does not have to be work-related. You can receive Social Security disability benefits if you been diagnosed with a condition not related to work or have been injured through some other cause.
Workers’ compensation benefits are paid for by your employer. Your employer is required by state law to pay for insurance on your behalf or to self-insure. Long-term disability benefits, on the other hand, are paid for through deductions on your paycheck. Another key difference between Social Security Disability and workers’ comp comes down to what to these programs address. Workers’ compensation offers medical benefits, wage-loss benefits and other benefits for work-related injuries and medical conditions from which you are expected to recover. This is meant to be a temporary benefit until you can get back to work. Social Security Disability, on the other hand, does not have to be work-related. You can get this type of disability because you have been diagnosed with a condition not related to work or have been injured through some other cause. Social Security Disability also covers injuries which are expected to last longer than a year.
If you are not sure what type of benefits you qualify for, contact an attorney at Frommer D’Amico. Our team can explain whether you qualify and how you can navigate the benefits system. We can also work with you during the application process, so you get the legal support you need.
Can You Get Social Security on Workers’ Comp?
This is a common question we hear at Frommer D’Amico. The short answer is “yes.” In fact, if you qualify for both, you should apply for both. However, you will not get more than your current wages, even if you do qualify for both. The total amount you receive from workers’ compensation and SSDI benefits cannot be more than 80% of your income before your injury.
In many cases, workers find they don’t qualify for both. This is because SSDI is often meant for longer-term injuries while workers’ compensation is meant for more temporary injuries.
If you would like to know if you qualify for SSDI, FMLA leave, workers’ compensation or other benefits, contact Frommer D’Amico. As certified workers’ compensation specialists, our attorneys understand all the laws surrounding workplace injury benefits. We can guide you to the right benefits and offer assistance through the application process, so you can maximize your compensation.
How Long Will My Benefits Last?
If you’re wondering “How long can you stay on workers’ comp?” the answer will depend on many factors. In general, you are paid benefits or are qualified to get benefits until you can return to work at your pre-injury earnings, you have recovered, or your employer has proven its entitlement to a modification based upon your ability to work in the labor market. You may also receive partial disability benefits for up to 500 weeks.
Social Security Disability benefits can also last as long as your permanent injury does, or until you reach retirement age. To find out how long you can expect to get benefits in your specific case, you may wish to consult with a worker’s compensation specialist.
Trying to determine the differences between workers’ compensation SSDI and navigating the benefits system can be complicated. If you need assistance with benefits, contact Frommer D’Amico for a consultation. Our team consists of certified worker’s compensation experts, and we can help you navigate the benefits system, whether you qualify for SSDI or workers’ comp. We don’t charge case management fees or consulting fees for the initial consultation, which can add up to thousands of dollars in savings for you if you work with us.
Lump Sum Payment Adjustments
How can workers’ comp and Social Security retirement benefits be effected by lump sum payment adjustments?
Injured workers can settle workers’ compensation claims through lump sum settlements. If you receive a lump sum settlement, you may face an offset amount for your benefits. Lump sum payment adjustments are based on the amount of workers’ compensation you were receiving every month.
In Pennsylvania, life expectancy lump sum settlements are quite common. Under Pennsylvania law, future periodic payments can be commuted by the Workers’ Compensation Board. No discount is applied when the commuted amount of time is 52 weeks or less. When the commuted amount is being calculated for a time period of more than 52 weeks, then a discounted rate is usually applied.
Before the agreement can be legally binding, a Compromise and Release Agreement must be approved. This detailed form typically provides all the information required for an offset. Occasionally, however, the award’s effective date may not be specified. If you received periodic payments, but the end date for the periodic payments is not listed, this can be problematic.
A Compromise and Release Agreement is signed on the date of the hearing before being submitted for approval to the judge, so in the case that an end date is not included for the periodic payments, the date that the Compromise and Release Agreement is signed is the final due date for the periodic payments. The proration effective date for the lump sum is the day after the Compromise and Release Agreement was signed, unless the Compromise and Release Agreement specifically states an effective date.
How Will My Employer Notify Me of a Workers’ Compensation Offset?
You will be notified about your workers’ compensation offset via the form LIBC-761 Notice of Workers’ Compensation Benefit Offset filed by your employer or your employer’s insurance carrier.
What is included in the form LIBC-761?
- The type of benefit that has caused this rate reduction in workers’ compensation benefits.
- The frequency of the workers’ compensation payments before the reduction.
- The amount of the workers’ compensation benefits before the reduction.
- The amount of the workers’ compensation payment reduction, known as the offset credit or offset amount.
- The date the offset credit begins.
- The end date for the workers’ comp rate reduction or a statement specifying that an end date cannot be established, such as if a pension payment is indefinite.
- The payment amount of the workers’ compensation benefits after the rate reduction.
- An explanation for the calculation of the offset credit.
Review your Notice of Workers’ Compensation Benefit Offset carefully, as employers and employers’ insurance carriers are not always consistent when completing this form. Check for inconsistencies in amounts and dates. For example, the offset credit amount listed may correctly represent your reduced workers’ compensation benefit amount, or the amount may be incorrect, such as a higher amount that is withheld to make up for an overpayment. You may also find that your beginning date and ending date for the offset credit period are incorrect.
If you are concerned that the information presented in Form LIBC-761 Notice of Workers’ Compensation Benefit Offset is inaccurate or that a clear explanation for the reduced rate of your workers’ compensation payment is not given, you should contact your employer or your employer’s insurance carrier for verification on the form’s provided information.
How to Minimize Your Offset Amount
Are you worried about how receiving both workers’ compensation and Social Security benefits may affect your benefit amounts? What if you are facing a large offset amount? Is there anything you can do as an injured worker to minimize your offset amount to receive more of your benefits?
If your combined benefits from workers’ compensation and Social Security Disability Insurance benefits are greater than 80 percent of your average current earnings before your injury, the offset will be applied to your benefits. Fortunately, you may have a few options for minimizing your offset amount under the Social Security Administration’s rules, such as excluding certain expenses, agreeing to a lower monthly benefit, spreading out your lump sum payment, shifting to retirement benefits and hiring a lawyer.
1. Exclude Expenses
The Social Security Administration deducts rehabilitation costs, dependent payments and legal fees before calculating the gross amount of your workers’ comp settlement. Past and future medical care expenses can be excluded, except for any payments made via Medicare. When these are subtracted from your settlement amount, your reduced workers’ comp benefits will result in fewer months that this offset may be in effect.
To exclude these expenses from your workers’ comp settlement, you will need to provide Social Security with documentation of these expenses, so make sure you keep careful records.
2. Agree to a Lower Monthly Benefit
After a lump sum settlement, you may agree to a lower monthly benefit for workers’ compensation until you reach the retirement age set by the Social Security Administration. By agreeing to this lower amount, your average current earnings are reduced and may not trigger an offset.
3. Spread Out Your Lump Sum Payment
If you receive a lump sum workers’ compensation settlement, you may be able to reduce your offset amount by spreading out your lump sum payment over the rest of your life. This method can significantly decrease your offset amount or eliminate the offset credit completely.
So what does the math for a spread out lump sum payment look like? For example, if you are a 50-year-old employee who receives a lump sum of $20,000 from your workers’ compensation case and you are predicted to have a life expectancy of 35 more years (420 months), the Social Security Administration would divide $20,000 by 420 months for a monthly payment amount of $476.
- $20,000 divided by 420 months equals $476 each month
Though this calculation is for a monthly payment, you will still receive your benefits as a single lump sum.
If you receive a Social Security benefit of $1,124, your combined total monthly benefit is calculated as $1,600.
- $476 plus $1,124 is $1,600
As long as your average current earnings were lower than $2,000 a month, your benefits will not be offset, as $1,600 is 80 percent of $2,000.
You can perform these calculations with your own benefits to determine what your monthly benefit should be to avoid an offset credit. As long as your total benefit is not more than 80 percent of your average current earnings, you should not have to worry about an offset.
Your workers’ comp settlement needs to include what is known as an amortization provision in order to be eligible for your lump sum settlement to be considered monthly payments. This must be included in your settlement’s original documents, not added to an existing settlement, as this is prohibited and raises red flags with the Social Security Administration.
4. Shift to Retirement Benefits
If you are receiving Social Security retirement benefits before a work injury, the workers’ comp offset will not apply. If you are approaching retirement age and you are a disability recipient, you may want to consider early retirement, so you can possibly minimize the offset of your workers’ comp.
However, if you choose to collect retirement benefits early, your monthly Social Security retirement benefit will be lower than if you’d chosen to retire closer to the traditional retirement age. Your full retirement age depends on the year you were born. For example, if you were born between the years of 1943 and 1954,
However, you can also receive delayed retirement credits if you choose to wait until after your full retirement age to collect your benefits, which could increase the monthly benefit amount you receive. The increase will no longer apply after you reach the age of 70.
5. Hire a Lawyer
When you hire a workers’ compensation attorney, they will try to draft a settlement agreement for you that minimizes the offset of your benefits. Your attorney may include that your settlement is to be paid until you reach a certain age, generally retirement age. Workers’ comp attorneys know the laws, and they know what expenses to exclude, so they can help you minimize your offset or avoid one entirely.
Will I Be able to Get Medical Insurance After a Settlement?
Deciding to accept a workers’ compensation settlement from the insurance company can close your claim. It can also affect your medical insurance in the future. You can apply for medical coverage under the Affordable Care Act or Obamacare after a work injury. You will need legal help to ensure your work injury is limited and does not hurt your right to future private medical coverage.
If you have Medicare, it may not pay for future medical treatment. Some of your settlement money, however, may be earmarked for future medical expenses. Similarly, if you have private medical insurance, your carrier may not pay for your medical expenses unless you can show that the cost of your treatment is the same as or greater than the amount of the settlement intended for medical use.
Worse, if your injury is a pre-existing one, you may have a hard time getting private medical insurance after your settlement. Private insurance contracts vary widely, however, so how they’re affected by a lump sum settlement can be vastly different. Understanding exactly what the work injury covers is important for future Affordable Care Act or Obamacare coverage. We will guide you so that you don’t go without health insurance.
Before applying for benefits and before accepting a settlement, contact Frommer D’Amico. If the insurance company has made an offer, we can review the offer and your medical coverage to help you understand how your medical insurance will be affected. We can work to protect your medical coverage. We can also negotiate for the fairest lump sum payment possible.
Contact Frommer D’Amico
Different types of benefits can affect your workers’ compensation payment. If you are receiving workers’ comp benefits and you are considering signing up to receive your Social Security benefits, reach out to us at Frommer D’Amico. We can guide you through the application process for workers’ compensation and determine the benefits you qualify for. Since we do not charge for case management, you never have to worry about legal fees for case management services.
Contact Frommer D’Amico for a free consultation.