When you are injured on the job, you may be entitled to workers’ compensation benefits to cover your lost wages while you are out of work. Unfortunately, in the event of a catastrophic injury, returning to work may not be feasible. When a workplace accident leads to long-term or permanent disability, the employer’s insurance company may offer you a workers’ compensation settlement. However, accepting permanent disability workers’ compensation benefits can impact your eligibility for Social Security disability benefits. Find out what you can expect from workers’ compensation and Social Security disability when you become permanently disabled.
How Does a Workers’ Compensation Settlement Affect Social Security Disability?
The Social Security Administration will not allow an individual to receive the full value of both permanent workers’ compensation benefits and SSD benefits at the same time. Typically, a person is not allowed to receive more than 80% of the compensation he or she received while working. The SSA will offset your workers’ compensation benefits by lowering your SSD payments to bring your total monthly compensation below the “applicable limit.”
To determine the maximum amount of combined benefits available to you, the SSA sets the “applicable limit” as one of the following, whichever is higher:
- 80% of your income before the accident or disability occurred
- the “total family benefit” of SSD received by each member of the family in the first month of receiving workers’ compensation benefits
The SSA will reduce the amount of SSD benefits you receive until your total combined benefits is below the applicable limit.
Negotiating A Permanent Disability Workers’ Compensation Settlement
There may be ways to structure your workers’ compensation settlement to maximize the amount of SSD benefits you are eligible to receive. If a doctor has determined your disability to be permanent and stationary, you may want to begin negotiating a workers’ compensation settlement based on your inability to return to work. An experienced workers’ compensation attorney can assist you with the negotiation process.
Many injured workers opt to receive a lump sum settlement in lieu of monthly payments. However, a lump sum settlement will not prevent the SSA from offsetting your disability benefits. The Social Security Administration will carefully consider the language in the settlement agreement to determine the appropriate offset of SSD benefits.
It may be possible to include language that gives you the highest possible applicable limit. For example, a settlement agreement may be drafted that differentiates medical and legal expenses from the lump sum payment that will be offset by Social Security. Before accepting any settlement offer from an insurance company, be sure to have the agreement reviewed by an attorney familiar with the way workers’ compensation and Social Security disability interact.
South Carolina Social Security and Workers’ Compensation Attorneys
If you have been injured on the job, contact the Klok Law Firm, LLC. Our attorneys have extensive experience handling both social security disability and permanent disability workers’ compensation claims. We will fight for the best possible outcome in your case. Contact our office in Mt. Pleasant, South Carolina to schedule an appointment.