If you receive Social Security Disability Insurance (SSDI) benefits, there are limits on how much total compensation you can collect if you also are eligible for additional public disability or workers' compensation benefits. If your benefits exceed an amount set by the Social Security Administration (SSA), the SSA may reduce the amount of SSDI benefits you receive to offset the other public disability or workers' compensation benefits you receive.
Public Benefits That May Reduce Your SSDI Benefits
Workers' compensation and public disability benefits can reduce the amount of SSDI benefits obtained. Other types of disability benefits that may reduce SSDI benefits include:
- Civil service disability benefits
- State temporary disability benefits
- State or local government retirement benefits based on disability
Public Payments That Do Not Reduce Your SSDI Benefits
According to the SSA, the following types of public benefits, among others, do not affect the amount of SSDI benefits you receive:
- Unemployment benefits
- Veterans Affairs benefits
- State and local government benefits, if Social Security taxes were deducted from your earnings
- Supplemental Security Income (SSI)
- Needs-based benefits
- Employer-paid sick pay
- Damages from tort or negligence lawsuits
- Railroad Unemployment Insurance Act (RUIA) sickness benefits or railroad-injury settlement amounts under the Federal Employer's Liability Act (FELA)
- Jones Act payments for injured merchant seamen
It is important to note that payments from a private pension or private insurance also do not affect the amount of SSDI benefits received.
Public Benefit Limits
If you receive workers' compensation or other public disability benefits as well as SSDI benefits, the amount of your SSDI benefits may be reduced if the total amount of compensation exceeds a certain amount. The reduction is made only if the sum of your SSDI benefits and other public disability or worker's compensation benefits exceeds either 80 percent of your "average current earnings" before you became disabled or is higher than your family's total SSDI benefit before the reduction.
What Are Average Current Earnings?
The SSA uses different formulas to calculate average current earnings, and which formula they use depends on your specific circumstances.
However, the SSA provides a summary definition of average current earnings in section 504 of its Social Security Handbook. According to the SSA, average current earnings is the highest of the following:
- Your average monthly wage on which your un-indexed disability primary insurance amount is based
- Your average monthly earnings from covered employment (including self-employment) during the highest five consecutive years after 1950
- Your average monthly earnings based on the single calendar year of highest earnings from covered employment, either the year your disability began or any of the five years immediately before your disability began
"Covered employment" is defined as employment through which Federal Insurance Contribution Act (FICA) taxes are paid. If your total SSDI, public disability and workers' compensation benefits exceed 80 percent of your average current earnings or exceed your family's total SSDI benefits, your SSDI benefits will be reduced until you stop receiving the other benefits or until you reach age 65, whichever occurs first.
A Sample Calculation
The SSA provides this example: If your average current earnings were $4,000 a month before you became disabled, you, your spouse and your two children would be eligible to receive a total of $2,200 a month in SSDI benefits.
However, if you also receive $2,000 a month in workers' compensation benefits, because the total amount of benefits you receive ($4,200) is more than 80 percent of your average current earnings (80 percent of $4,000, therefore, $3,200), your SSDI benefits would be reduced by $1,000 to offset the workers' compensation benefits and bring your total amount of compensation within the SSA's limits to $3,200.
How an Attorney Can Help
The SSA statutes, regulations and procedures are very complex. Therefore, the assistance of a lawyer who practices exclusively in this area of law is invaluable when analyzing how your SSDI benefits may be affected by other disability payments. It is important not only to understand each of the SSA's rules individually, but also to understand how they work in relation to other regulations and provisions of the Social Security Act and other laws. If you would like to know more about SSDI or other Social Security benefits, contact a knowledgeable Social Security Disability attorney in your area.
