Workers' Compensation Offset
If you are eligible, it is possible to receive both Workers' Compensation and Social Security Disability (SSD) benefits at the same time. However, if you are receiving Workers' Compensation benefits and file for SSD benefits, your SSD benefits may be reduced. Social Security law provides that you may only receive up to 80% of your average current earnings (ACE) between SSD and Workers' Compensation. If your SSD and Workers' Compensation benefits are over 80% of your ACE, your SSD benefits will be reduced.
The Workers' Compensation offset is determined as follows:
- Calculate your average current earnings, or ACE. Your average current earnings is an amount that is determined by averaging either your highest consecutive 5 years of earnings, or using the highest year of earnings within the 5 years prior to when your disability occurred. You will need to have your Social Security earnings statement to do this calculation.
Example: If your highest year of earnings for the 5 years before you became disabled is $63,000, you would divide this number by 12 to get a monthly total, then take 80% of that figure to get your ACE:
$63,000 / 12 = $5,250
80% of $5,250 = .80 x $5,250 = $4200
$4,200 is you’re your average current earnings or ACE.
- Calculate your monthly Workers' Compensation benefit. If you received $625.00 per week, multiply this by 4.333333 to determine your monthly Workers' Compensation benefit.
$625.00 x 4.3333333 = $2,708.33
- Calculate your offset by subtracting your monthly Workers' Compensation benefit from 80% of your ACE:
$4,200 - 2,708.33 = 1,491.67.
$1,491.67 is the highest SSD benefit you could receive under this example.
Every case is different. It is crucial that you report all changes (reductions and increases) to your Workers’ Compensation benefits to Social Security if you receive both Workers’ Compensation and SSD benefits, because each change can affect your benefit. When you inform Social Security, you should take a copy of your Workers' Compensation Board Notice of decision to your local SSA field office, and ask that SSA adjust your benefits as needed.
Both Workers' Compensation and Social Security Disability are major practice areas of MCV Law. If you would like assistance applying for benefits through either or both of these areas of the law, connect with our team for a free consultation. Our attorneys are here to help.