If you receive both workers’ compensation and Social Security Disability Insurance (SSDI), your SSDI benefits may be reduced. In many cases, you are eligible to collect both forms of compensation at the same time, though the total cannot exceed 80% of your average current earnings prior to the onset of your disability. Additionally, lump-sum workers’ comp settlements and future changes to benefits can impact your SSDI payments. Workers’ compensation benefits can reduce SSDI payments, as federal law limits the combined amount of disability-related benefits a person is eligible for.
Understanding How Workers’ Compensation and SSDI Work Together
It may seem obvious that certain occupations have the propensity to lead to injuries, such as occupations where a person works with heavy equipment, with dangerous chemicals, or at great heights. However, even people with office jobs could be injured at work, for example, if they trip over something on the ground or strain to lift something heavy. When a person from Newark is injured at work, they may wonder whether they should seek workers’ compensation benefits or Social Security disability benefits, or both. When determining what course of action to take, it is important to understand how workers’ compensation benefits affect Social Security disability benefits.
What the Social Security Administration Says
- According to the Social Security Administration, if a person receives workers’ compensation benefits, it will reduce how much they receive in disability benefits
- Workers’ compensation benefits are awarded after a person is injured or made ill on-the-job
- If a person is receiving both SSD benefits and workers’ compensation benefits, the total amount of benefits that person receives cannot be more than 80 percent of what the person’s average earnings were prior to their disability
- The SSA has several formulas that may be used to determine what a person’s average current earnings were
How the 80% Offset Rule Works
The most important rule that many individuals receiving both SSDI and workers’ compensation should understand is the offset rule. While this does not automatically prevent someone from receiving both benefits, it does limit how much someone is eligible to receive in combined workers’ comp and SSDI benefits.
Example of the Offset Rule
- If a worker earned $4,000 prior to their injury or disability, they can recover up to $3,200, which is 80% of their income
- If that works, receives $2,200 in SSDI and $2,000 in workers’ comp, the total amount, $4,200, would exceed 80% of their average income
- As such, the SSA may reduce the recipients’ SSDI payments
- For example, the SSDI payments could be reduced by $1,000
Lump-Sum Settlements and Changes to Workers’ Compensation Benefits
The SSA should be notified if a recipient of disability benefits receives a lump sum payment of workers’ compensation benefits, as it may affect how much a person receives in SSD benefits. The SSA should also be notified if a person’s current amount of workers’ compensation benefits goes up or down, as this could also affect how much a person receives in SSD benefits.
Why Lump-Sum Payments Matter
- The SSA should be notified of any lump-sum workers’ compensation payments, as they can impact SSDI payments
- A lump-sum payment can impact SSDI, even if the payment is made in one installment rather than over time
- The SSA can treat the payment as if it were paid over time to calculate the offset
Why Reporting Benefit Changes Matters
- The SSA should also be notified if a recipient’s workers’ compensation benefits increase or decrease, as this can impact SSDI benefits
- Changes in workers’ compensation payments can impact the offset
- Reporting changes can help prevent overpayments or underpayments, which may be disputed at a later date
What Injured Workers in New Jersey Should Know After a Workplace Injury
Workers in New Jersey who suffer a serious workplace injury may be eligible for both SSDI and workers’ compensation. While both serve to compensate individuals, they serve different purposes. Workers’ compensation is used to provide benefits for those who suffer job-related injuries or illnesses, while SSDI provides long-term compensation for those unable to work due to certain medical conditions. As these systems are independent, it is possible for someone to obtain both types of benefits.
Reporting a Workplace Injury in New Jersey
- In New Jersey, workers’ comp benefits generally proceed through the New Jersey Division of Workers’ Compensation within the Department of Labor and Workforce Development
- Injured employees should immediately inform their employer as soon as possible following a workplace or on-the-job injury
- New Jersey workers’ compensation rules require the injured party to report the accident within 90 days
- Prompt reporting can preserve your right to medical care and wage replacement
- Reporting can help you gather the documents you need if you later apply for disability
Contact an Experienced New Jersey Social Security Disability Lawyer
As this shows, while it is possible to receive both workers’ compensation benefits and SSD benefits, the amount of SSD benefits received will go down if a person also receives workers’ compensation benefits. Because this can be a complicated situation, those who are receiving SSD benefits and workers’ compensation benefits may want to discuss their situation with an attorney at the Law Offices of Sheryl Gandel Mazur to ensure they are being appropriately compensated. Contact us today to learn how we can represent you.
