I represent a 48 year old former fence installer whose application for Social Security Disability ("SSD") benefits was just approved. The claimant had been receiving regular workers' compensation benefits until he accepted a lump sum settlement.
Workers' compensation sometimes provides a lump-sum settlement as a compromise for periodic payments. A lump sum is subject to being offset just as periodic payments are. The lump-sum is prorated to reflect the monthly rate that would have been paid had the lump-sum award not been made. Medical and legal expenses incurred by the worker in connection with the workers' compensation or public disability benefit claim may be excluded from computing the offset.
Depending on the amount of the lump sum and the claimant's earning history, the SSD offset can be substantial.