Social Security and Worker's Compensation Offsets

Posted about 6 years ago. 9 helpful votes

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1

Notify Social Security about Worker's Comp as Soon as Possible

When you apply for social security disability benefits, the claims representative should ask you if you are receiving worker's compensation. If she or he does not mention it, be sure to bring it up. You will likely be asked to provide a worker's compensation pay stub and/or a Notice of Compensation Payable. If you have made a settlement in your worker's compensation case, you will need to provide paperwork documenting the settlement. Make sure you inform the claims representative of any changes in your worker's compensation case including any receipt of partial worker's compensation payments due to payment of attorney fees or a return to work. Ask the claims representative to let you know if you will be subject to a reduction in social security disability based on your receipt of worker's compensation. If your worker's compensation case is pending, make sure you contact your local Social Security office as soon as possible once you receive a decision on your case.

2

Review Your Notice of Award

When your social security disability case is approved, be sure to review your award letter to confirm Social Security accounted for your worker's compensation payments. The reason this is so important is because you may only receive 80% of your average current income while you are receiving social security disability and worker's compensation benefits. Both social security disability and worker's compensation are considered public disability benefits. This is why the 80% rule comes into play. The government does not want to create an incentive for folks to not work and collect more money than they would by earning wages from employment. Unfortunately, many people are overpaid social security disability benefits when Social Security fails to acknowledge the worker's compensation payments. (continued in Step 3)

3

Review Your Notice of Award (continued)

While you may have no idea what Social Security has taken into account, if overpaid, you will be held responsible for paying the Social Security Administration back. Overpayments can be thousands of dollars by the time Social Security catches the mistake! Your award notice should reference your worker's compensation benefits and either say, "We reduced your social security disability benefits because of your receipt of worker's compensation" or "Your worker's compensation benefits did not affect your social security disability benefits." (continued in Step 4)

4

Review Your Notice of Award (continued)

Everyone's situation will differ because everyone's average current earnings are different. While one person may receive less in the way of social security disability benefits, another may receive his full disability benefit while receiving worker's compensation. If your Notice of Award does not mention worker's compensation you should call your local Social Security office immediately. If you cannot get through to your local Social Security office, call the national 1-800 number. Being vigilant and acting quickly will help reduce the risk of receiving a large overpayment notice later.

Additional Resources

Social Security Administration 1-800-772-1213

Social Security Administration

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