Yes, you can apply for Social Security Disability Insurance (SSDI) while receiving workers’ compensation benefits, and you may qualify for both. But if you're getting workers’ comp, it may affect how much money you'll receive from SSDI (or vice versa).
There are important differences between SSDI, a federal benefit funded by Social Security taxes, and workers’ comp coverage, which is paid for almost exclusively by employers and generally governed by state laws.
SSDI is meant to provide an income when you are unable to work for an extended period because of illness or injury. To qualify, you must meet Social Security's standard for disability — essentially, that your condition is severe enough to prevent you from working for at least a year or will result in death. It doesn't matter whether your ill health is related to your job.
Workers’ comp programs pay out for injuries or illnesses suffered on, or as a result of, your job, covering medical costs and some portion of lost wages. Though it can be permanent, workers’ comp usually goes to people who are unable to work for a short time or who are considered partially disabled and can return to a job with reduced demands and lower pay. That means not everybody who gets workers’ comp will qualify for SSDI.
Workers’ compensation can provide income while you're waiting for SSDI — it typically takes a few weeks for a workers’ comp claim to be approved or denied, versus three to five months to process an SSDI application. (The Social Security Administration recommends filing for SSDI as soon as you become disabled because of the time it takes to go through the application process.)
But if you're still getting workers’ comp when your SSDI starts, the total of both benefits can't exceed 80 percent of what Social Security determines to be your “average current earnings” prior to when you became disabled. If they do, the agency will reduce your SSDI benefits to get under the cap.
That offset, as it's called, will continue until your workers’ comp benefits end or you reach full retirement age (whichever comes first). Once you reach full retirement age, your disability benefit switches to a retirement benefit and the offset no longer applies.
Other disability-related government payments can also reduce SSDI benefits, including civil service disability or state temporary disability benefits. Veterans benefits and Supplemental Security Income do not reduce SSDI payments. You'll find more information in the Social Security pamphlet "How Workers’ Compensation and Other Disability Payments May Affect Your Benefits."
Keep in mind
- If you are getting workers’ comp when you apply for SSDI, you'll need to provide detailed information to Social Security on those payments.
- The offset still applies if you receive a onetime settlement for workers’ comp, rather than a monthly payment. In these cases, Social Security prorates the lump-sum amount into a monthly increment and uses it to calculate the benefit reduction.
- Some states have a “reverse offset plan” — they reduce workers’ comp benefits if the recipient is also getting SSDI. Where Social Security recognizes a state's reverse-offset plan, it does not reduce SSDI payments based on workers’ comp.
Published March 24, 2021