Workers in New York and around the country who are injured in on-the-job accidents could be entitled to both Social Security Disability Insurance and workers’ compensation benefits as both of these programs are designed to help people who are unable to work through no fault of their own. SSDI is a federal program managed by the Social Security Administration that provides benefits to people who have become disabled based on their payroll tax contributions. Workers’ compensation is a state program administered by insurance companies that pays disabled workers benefits based on the nature of their injuries and their earnings.
The workers’ compensation and SSDI offset
While disabled workers may be entitled to both SSDI and workers’ compensation benefits, the amount they receive each month cannot be more than 80% of their pre-disability earnings. If the combined benefits are higher than this figure, the SSDI benefit is reduced until the 80% cap is met. This is known as an SSDI offset.
Offsetting a lump sum
Calculating the offset is fairly straightforward when workers’ compensation benefits are being paid weekly, but things are a little more complicated when benefits are paid as a lump sum. When converting a lump sum into a weekly figure leads to a workers’ compensation rate that the SSA feels is unreasonable, the agency may choose a different rate. Factors that this revised rate could be based on include the maximum workers’ compensation benefit and the disabled worker’s previous income.
Legal help with SSDI and workers’ compensation claims
The rules dealing with benefits programs can be confusing, and the consequences of missing deadlines or failing to disclose important information can be severe. This is why disabled workers should understand the process and thoroughly review all their paperwork before submitting it. Disabled workers should also understand that any legal expenses they incur while pursuing a workers’ compensation claim will likely be considered “excludable” and deducted before the offset is calculated.