Yes, you can keep both worker's compensation benefits and social security benefits together. This is of course only when you qualify for both social security disability insurance benefits and worker's compensation benefits.
Since these are both separate programs under federal government, you don't need to give up one to avail benefits from another. Yet, even when you are allowed to keep both, you may face some reduction in your social security benefits to make up for extra benefits that exceed the income limits under benefits set by the Social Security Administration, SSA.
Worker's compensation offset
The Social Security Administration imposes a reduction rule to your social security benefits due to any extra income you may be receiving under your worker's compensation benefits. This is because, according to the SSA's rules, you can't earn more than 80% of total amount you earned while you were working full time. Hence, this 80% includes the sum of your social security benefits and worker's compensation benefits and should not exceed that amount.
Applicable limit on benefits
For any person earning above 80% of their full-time wages, their worker's compensation benefits offset would directly affect the social security income benefits. Hence, the social security would adjust the extra amount byreducing the amount of benefits you receive from SSDI to stay within the income limits.
The applicable limit is as follows:
- 80% of the worker's pre-impairment income, called 'average current earnings';
- The total amount of benefits received by the recipient's family through SSDI at the time of being granted the 'worker's compensation benefits';
In most cases, the 80% of worker's pre-impairment or pre-disability is always higher than the total benefits amount received by the whole of recipient's family. The SSA would always set the offset limit on the higher amount.
Reverse Offsets on worker's compensation
In some cases, where income from worker's compensation benefits exceed the amount of social security benefits, the SSDI may offset the worker's compensation benefits in the same way that worker's compensation benefits compensate social security offset. This, reverse offset is rare but will always be applied where income from social security benefits is less than worker's compensation benefits but the total income combined from these sources exceeds the 80% of amount of total earnings of the recipient before their disability.
Minimizing the financial drain from offsets
Worker's compensation attorneys would draft settlement agreements to minimize any offset SSDI amount. However, the SSDI is wise to this method and would try to overcome the settlements by converting the worker's compensation lump sum amount to a monthly amount.
Yet, since the rules about settlements are set in the state and are not federal, most local attorneys would be able to compensate the offsets to minimize your financial drain through offsets. You can consult a social security attorney for more guidance on this.