Why Are Disability Benefits Offset When Receiving Workers' Comp? Can You Avoid It?

A disability that lasts longer than 12 months can qualify you to receive Social Security disability benefits. Workers' compensation benefits that you are receiving could be impacted by an approval for disability. If you are planning to apply for disability and already receive workers' comp, here is what you need to know.

What Happens When You Are Approved for Disability?

Receiving workers' compensation benefits does not prevent you from receiving disability benefits. However, it can impact your monthly payment. Your disability payments could be temporarily lowered while you are receiving workers' comp.

The lowered payments, or offset, is designed to ensure that you do not receive more than you are allowed in one month. Your workers' comp payment and disability cannot exceed 80 percent of what you previously earned when working, as of May 2016. The offset lasts as long as you receive workers' comp. At that point, your disability benefits will increase to the maximum limit.

What Can You Do?

There a couple of available options for handling an offset. One is to simply wait to apply for disability benefits until after your workers' comp stops. It is important to note that if you do opt to wait, you could be left without any income until the Social Security Administration reviews your claim. You also will not have medical insurance during that period.

Another option is to take a lump settlement for your work-related injury and divide the payments over a period of time. By taking smaller payments instead of larger monthly payments, you can avoid reaching the number at which the SSA starts to offset your disability payments. 

In order for this to occur, your workers' compensation attorney will need to ensure that your settlement documentation specifically lays out the plan for your future payments. He or she can help calculate how much you need to receive each month to avoid having an offset of your disability benefits. 

Before signing the settlement agreement with your employer's insurance company, thoroughly review the document. If the language to divide the settlement is not included and you accept the offer, you could potentially face an offset of your disability benefits for months. Depending on the amount of the settlement, it could even be years. 

If you are thinking of applying for disability benefits, inform your workers' comp attorney, such as one from The Law Offices Of Martin Von Mizener. He or she can help you explore other ways to avoid an offset that might apply to your specific situation.