Injured workers in California are often unsure about whether or not they are eligible for Social Security disability benefits while they are still receiving workers’ compensation benefits. Fortunately, the answer is yes, you can apply for Social Security disability benefits while you are in the process of pursuing a workers’ compensation claim.
However, it is crucial to note that if you are receiving workers’ compensation benefits and then qualify for Social Security disability benefits, the amount you receive in Social Security disability benefits may be less than it would have been otherwise. The reason you might receive less money in this scenario is because the total amount of both benefits cannot exceed 80 percent of your average current earnings (prior to your injury). This limitation is imposed by the Social Security Administration, so it is also the entity that calculates what your average current earnings should be.
What Is Social Security Disability?
Social Security is a federal benefit that is funded by social security taxes. Social Security Disability Insurance (SSDI) exists to provide people with an income if they cannot work for an extended period of time due to an injury or illness. This benefit has nothing to do with workers’ compensation, and to qualify for it, it does not matter whether or not your injury or illness is job-related.
To qualify for SSDI benefits, you must have a major injury or illness that meets the Social Security Administration’s standard for disability. Generally, your condition has to be severe enough to prohibit you from being able to work for at least a year, or it is a condition that will result in death. Additionally, to be eligible for SSDI benefits you also must be unable to perform any work, not just the job you had before your injury or illness.
Are There Any Other Requirements to Be Eligible for Social Security Disability?
Yes. In addition to the requirements above, you must also have accumulated “work credits” by working for a long enough period of time. Each year as you work, you acquire work credits which are based on your total yearly wages. To qualify for SSDI, the number of work credits you need depends on your current age and when you became disabled and unable to work.
What Is the Difference Between Workers’ Compensation and Social Security Disability Insurance?
There are multiple differences between workers’ compensation benefits and Social Security disability benefits. First, Social Security disability benefits come from a federal program, while workers’ compensation benefits are paid for by an employer’s workers’ compensation insurance coverage. In California, workers’ compensation benefits are governed by the California Workers’ Compensation Act. Under the California Workers’ Compensation Act, employers are required by state law to obtain workers’ compensation insurance (subject to certain exceptions).
Next, workers’ compensation benefits are limited to claims involving work-related injuries or illnesses. You can receive workers’ compensation benefits for minor injuries, such as back sprains or hand lacerations. There is no requirement regarding how severe the injury or illness must be in order to be eligible for workers’ compensation benefits.
With SSDI benefits, you can receive them for many different types of injuries or illnesses, even if you are not injured at work. However, to be eligible, you must prove that you have a severe injury prohibiting you from being able to work for a year or that will result in your death in order to receive Social Security disability benefits.
Another substantial difference between Social Security disability benefits and workers’ compensation is that if you have a compensable work-related injury or illness, you are eligible for benefits right away, regardless of how long you have been working for your employer. To receive Social Security disability benefits, you must have enough of a work history to be eligible. In general, Social Security disability benefits also take much longer to receive, given that the benefits begin only after a five-month waiting period has passed.
Dual Social Security Disability and Workers’ Compensation Benefits Offset
If you are receiving both Social Security disability benefits and workers’ compensation benefits at the same time, you should be aware that there may be an “offset” taken out of your total combined compensation if the total exceeds 80% of your average income. Knowing about the potential offset amount before you begin receiving both types of benefits is helpful for planning purposes. Keep in mind that regardless of whether you are applying for SSDI benefits before or after you receive workers’ compensation benefits, you are required to report the workers’ compensation earnings once you start receiving them.
In some cases, there may be a “reverse” offset. With a reverse offset, you receive less money in workers’ compensation benefits while receiving the full amount of Social Security disability benefits. To learn more about which option is most suitable for your case and your own particular circumstances, reach out to an experienced workers’ compensation and Social Security disability lawyer.
How to Calculate Any Offset When Receiving Both SSD Benefits and Workers’ Compensation Benefits
To calculate the offset amount, the first step is to add up your monthly workers’ compensation benefits, then combine that amount with your monthly SSDI benefit payments. You also need to include SSDI benefits paid to your family members when doing this calculation.
If the total amount of these benefits (combined) is greater than 80% of your average current earnings, the amount in excess will be deducted from your Social Security benefit. An example calculation of the offset amount is as follows:
Before your disabling injury, you earned $4,000 per month on average. Your family is eligible to receive $2,200 each month in Social Security benefits. In addition, you receive $2,000 per month in workers’ compensation benefits.
In this scenario, the total amount of money you receive in benefits is $4,200, while 80% of your average earnings is $3,200. Since you would receive benefits in excess of 80% of your average earnings ($1,000), your Social Security benefits would then be reduced by $1,000. If you are unsure as to whether an offset will be used in your case, a workers’ compensation and Social Security disability lawyer can help.
Does a Lump Sum Settlement in My Workers’ Compensation Case Impact My Social Security Disability Benefits?
A lump sum settlement is a settlement you might receive at the conclusion of your workers’ compensation claim. This settlement is typically paid out to you all at once. In many cases, a lump sum settlement will affect your Social Security disability income if your average income is too high. Like a monthly offset, an offset due to a lump sum like a settlement will continue until your Social Security disability benefits become retirement benefits, or until you reach the projected distribution of the settlement.
If you are receiving Social Security disability benefits, it is important to let your workers’ compensation attorney know before you sign any settlement contracts. Your attorney may be able to give you more specific details regarding how your lump sum settlement could impact the Social Security disability benefits you are currently receiving or anticipate that you may receive in the near future.
Is State Disability Insurance the Same as Social Security Disability Insurance?
No, state disability insurance and Social Security disability insurance are two entirely different programs. The state of California offers disability insurance as part of its State Disability Insurance program. The California State Disability Insurance program provides eligible California workers a partial wage replacement benefit when they cannot work because of a non-work-related injury, illness, or due to a pregnancy. These benefits are paid for just a short period of time.
Social Security disability benefits are federally funded and are provided by the U.S. Social Security Administration. These benefits tend to be paid out for a longer period of time than California state disability insurance is paid, but there is also a longer waiting period before Social Security disability benefits begin. If you have questions regarding California state disability insurance, a knowledgeable disability insurance attorney can help.
Do I Need an Attorney to Apply for SSD Benefits and File a Claim for Workers’ Compensation Benefits?
You can apply for Social Security disability benefits and file a claim for workers’ compensation benefits without an attorney, but it is often to your advantage to hire an attorney to handle these matters on your behalf. Workers’ compensation cases can be complex, especially when there is a potential offset involved to consider when settling the case if an injured worker was also receiving Social Security disability benefits.
Having an experienced lawyer on your side can make this process go much smoother for you and eliminate the stress of navigating these legal issues on your own. Matthew A. Schondel has over 30 years of experience helping injured workers fight for the workers’ compensation benefits that they deserve.
Attorney Matthew A. Schondel knows the ins and outs of the California workers’ compensation system, and he is here to help you through every stage of your workers’ compensation case. Contact our office today to schedule a free consultation and learn more about how we can help you move forward with your claim for work comp benefits.