SSD & WC Offset

I represent a 49 year former deliveryman for DHL, whose Social Security Disability (“SSD”) benefits were approved without a hearing yesterday. The decision approving his benefits ended with the statement: “There may be an offset against Social Security disability insurance benefits due to the receipt of Workers’ Compensation.”

If you are entitled to periodic benefits under a workers' compensation (“WC”) law or plan, or to certain public disability benefits, then the Social Security Administration (“SSA”) is generally required to reduce your SSD benefits. The total monthly amount of your benefits cannot exceed 80 percent of your average current earnings before you become disabled. The SSD benefits that you and your family receive will be reduced if the combined total amount, plus your WC payment, plus any public disability benefit payment you receive, exceeds 80 percent of your average pre-injury/illness earnings. The larger your predisability income, the less likely it is that your benefits will be offset.

The offset needs to be considered if you are offered a WC lump sum buyout. If your periodic SSD and WC benefits exceed 80%, then the terms of a WC buyout could reduce the effective rate of your periodic WC payments, thereby reducing the SSD offset.