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How Social Security Disability and Workers' Compensation Overlap

workers' comp and disability

Finalizing the total benefits receivable for injured workers can be a complicated matter. Both workers’ compensation insurance agencies and the Social Security Administration (SSA) are concerned with how much financial benefit an injured claimant will receive, and in many states both will be offset in some manner.

Amounts that are paid monthly can also be calculated differently than with a lump-sum settlement application because the single payout ends the responsibility of workers’ compensation to pay the claimant on a monthly basis. The process can differ depending on the state, but workers’ compensation benefits are always calculated first before Social Security Disability Insurance (SSDI) process will take effect.

Determining Workers’ Comp Benefits

The first payment issued when an injured worker has been declared unable to earn a living due to a workplace injury will be determining how much the workers’ compensation benefit will be, which is capped at 80% of what the injured worker was earning at the time of the injury occurrence. This is done by either evaluating the prior five-year employment period earnings and averaging them, or by taking the highest one year of earnings and using it as the guideline for the 80% determination.

Whether or not a claimant is eligible for SSDI depends on the amount of money being received from workers’ compensation benefits.

Understanding the Applicable Limit

If the calculated monthly workers’ compensation amount is more than the "applicable limit," then the SSA will deny an additional disability claim. This is because the benefit level of the workers’ comp payments is in excess of what SSA considers when approving a Social Security disability claim.

Additionally, there can still be some asset restrictions for those who are injured and under standard retirement age. When workers’ comp benefits are less than the applicable limit, then SSDI will provide the additional income benefits to bring the injured claimant to the threshold of the applicable income limit.

Lump Sum Settlement Inclusion

Many workers’ compensation claims are settled with lump sum payments when the insurance company wants to avoid monthly annuities. This is very common for injured workers who have high earnings levels, and it can impact a SSDI determination significantly. The SSA will take the lump sum payment and apply it across the time frame used to make the settlement offer, then dividing the total by the number of months payable according to claim records.

After the end of the workers’ compensation period, the claimant will then be allowed full SSDI benefits with no asset penalties. There are times when a lump sum will not reach the limit of 80% of the highest earning year as a workers’ compensation benefit award, which then would mean SSDI would provide the remainder based on the SSA monthly calculation across the workers’ comp benefit period.

Why Injured Workers Need Attorneys

The final benefit determination can be a complicated issue when injuries are borderline regarding permanent disability. Claimants who are approved for workers’ compensation benefits still face a challenge of proving to the government that the disability is total and permanent, which is always a deliberate process by the SSA. They take their time settling a disability claim because they know it’s always permanent in the case of SSDI.

In addition, every claimant may not be entitled to SSDI if they have not earned at least 20 Social Security credits during the past ten years. There are many rules the SSA uses when approving claims, and having an experienced attorney is vital.

Workers' Compensation Law Firm Profiles

R. Mack Babcock

Meet Colorado Workers' Compensation, Personal Injury
and Insurance Dispute Attorney R. Mack Babcock

Prior to founding The Babcock Law Firm, LLC, R. Mack Babcock spent many years on the other side of workers' compensation, car accidents, personal injury and insurance disputes representing some of the largest insurance companies and corporations in Colorado as an attorney at a midsize insurance defense firm.

Babcock is a member of the Colorado and Denver Bar Associations, the Colorado Trial Lawyers Association and the Workers' Compensation Educational Association. In early 2008, he was elected as the Colorado House District 43 Committee Chairperson for the Douglas County Colorado Democratic Party.

In connection with this position, he is responsible for finding a candidate(s) to run for House District 43, overseeing the campaign(s), organizing volunteers, and also sits on the executive committee for the Douglas County Democratic Party.

Gerber & Holder Workers' Compensation Attorneys

Meet Atlanta's Top Workers' Compensation and Work Injury Attorneys

In 2018, two widely respected attorneys joined forces to establish Gerber & Holder Attorneys at Law, an Atlanta-based workers' compensation law firm dedicated to protecting injured workers in Georgia. Together, Ben Gerber and Thomas Holder bring an impressive resume of combined skills, knowledge, resources and experience to work for individuals suffering from a work-related accident such as back and neck injuries, spinal cord trauma, head and brain injuries, construction accidents, car accidents, truck accidents and other catastrophic injuries.

Both attorneys have an impressive history of success in workers' compensation cases with over 50 years of combined experience practicing law in Georgia. Their accomplishments include recognitions from Super Lawyers, the Georgia Trial Lawyers Association, AV Martindale-Hubbell, Avvo, the Atlanta Bar Association, Knights of the Bar, the Lawyers' Foundation of Georgia and others. Ben Gerber also appeared as a guest on the radio show Atlanta Legal Experts. He's also an active member of the Georgia Workers’ Compensation Claimant’s Lawyers (WCCL) board, Georgia Trial Lawyers Association, Atlanta Bar Association and the Atlanta Volunteer Lawyers Foundation.