How SSDI and Workers' Compensation Work Together

Social Security Disability Insurance (SSDI)

• SSDI is a federal program that provides financial assistance to people who are unable to work due to a disabling condition. To qualify for SSDI, you must have worked for a certain number of years and paid into the Social Security system through your taxes.
• The disability must be expected to last for at least 12 months or result in death.

Workers' Compensation

• Workers' compensation is a state-run program designed to provide benefits to workers who are injured or become ill due to a work-related incident. Unlike SSDI, workers' compensation is based on the circumstances of your injury at work and is typically provided by your employer's insurance company.
• Workers' compensation benefits may cover medical expenses, lost wages, and other costs related to your work injury or illness.

Can You Receive Both SSDI and Workers' Compensation?

Yes, you can qualify for both SSDI and workers' compensation if you meet the requirements for each program. However, there are specific rules regarding how much you can receive in total from both programs.

• Impact on SSDI Benefits: If you are receiving workers' compensation benefits, your SSDI benefits may be reduced. The Social Security Administration (SSA) has a rule that limits the total amount of benefits you can receive from combined sources (SSDI and workers' compensation). Generally, the total amount of your combined benefits (SSDI + workers' compensation) cannot exceed about 80% of your average pre-disability income.
• If your combined benefits exceed this threshold, the SSA will reduce your SSDI benefits to ensure that you do not receive more than this maximum limit.
• Impact on Workers' Compensation: Receiving SSDI benefits doesn’t usually affect your workers' compensation benefits. However, workers' compensation benefits will be reduced if you are eligible for a third-party settlement or other compensation that overlaps with workers' compensation.

How the SSA Calculates the Offset

The SSA uses a formula to calculate how much your SSDI benefits will be reduced if you are also receiving workers' compensation. Here’s how it works:

• The SSA will add the total amount of your SSDI benefits and workers' compensation benefits.
• If the total exceeds 80% of your average current earnings (pre-disability), your SSDI benefits will be reduced until the total does not exceed 80%.
• Example: Let’s say you were earning $3,000 per month before you became disabled. The total amount of benefits you can receive from SSDI and workers' compensation combined cannot exceed $2,400 per month (80% of your $3,000 income). If you’re already receiving $1,500 in workers' compensation, your SSDI benefits will be reduced by $600 to ensure you do not exceed the $2,400 limit.

Important Considerations When Applying for Both SSDI and Workers' Compensation

• Report All Benefits: It is important to report any workers' compensation benefits you are receiving to the SSA when applying for SSDI. Failure to do so can lead to overpayment, which you’ll have to repay.
• The Timing of Applications: Applying for both SSDI and workers' compensation at the same time may be beneficial. However, the process for SSDI typically takes much longer than workers' compensation claims, which can mean you receive workers' compensation benefits sooner.
• Appeals Process: If your SSDI benefits are reduced due to workers' compensation, you have the right to appeal the SSA’s decision if you believe the reduction is incorrect or too high.