If you were injured on the job and your condition prevents you from returning to work, you may be entitled to both Workers’ Compensation and Social Security Disability Insurance (SSDI) benefits. While it’s possible to receive both types of compensation, there are important rules, limits, and strategies to understand before applying.
This blog explains how Workers’ Comp and SSDI work together, the limits you might face, and how to protect your benefits.
Understanding the Basics
What Is Workers’ Compensation?
Workers’ Compensation provides wage replacement, medical coverage, and other benefits if you’re injured or become ill due to your job. These benefits are typically paid by your employer’s insurance provider and are not based on financial need or work history.
What Is SSDI?
SSDI is a federal program that pays monthly benefits to individuals with disabilities that prevent them from working. To qualify, you must have a medical condition expected to last at least one year (or result in death) and enough work credits based on your job history.
Can You Receive Both at the Same Time?
Yes, it is legal to receive both Workers’ Compensation and SSDI at the same time. However, the total amount of benefits you receive may be subject to an offset—meaning your SSDI payments could be reduced.
How the Offset Works
The Social Security Administration (SSA) limits your total monthly benefits from both programs to 80% of your average current earnings before you became disabled. If your combined Workers’ Comp and SSDI benefits exceed that amount, your SSDI payments will be reduced to keep you within the limit.
Example:
- Pre-disability average monthly earnings: $4,000
- 80% limit: $3,200
- Workers’ Comp benefits: $2,500
- SSDI eligibility: $1,200
- Since $2,500 + $1,200 = $3,700, your SSDI would be reduced by $500 (to $700) to stay under the $3,200 limit.
Key Things to Keep in Mind
The Offset Doesn’t Last Forever
The SSDI offset ends when:
- Your Workers’ Comp benefits stop
- You reach full retirement age and switch to Social Security retirement benefits
Types of Workers’ Comp May Affect the Offset Differently
- Lump sum settlements can still affect your SSDI, depending on how the settlement is structured. Language in the settlement agreement can make a big difference in whether (and how long) the offset applies.
- Permanent disability ratings may result in long-term benefits that reduce your SSDI for years unless negotiated properly.
Tax Considerations
While Workers’ Comp is generally not taxable, SSDI can be partially taxable depending on your overall income, especially if you’re receiving both types of benefits.
Why You Should Speak With a Lawyer
Coordinating Workers’ Comp and SSDI benefits can be complicated, and mistakes could reduce the money you’re entitled to. An attorney can help by:
- Evaluating your eligibility for both types of benefits
- Helping structure a settlement to reduce the SSDI offset
- Ensuring all paperwork is accurate and timely
- Advocating for your full benefit rights during negotiations or appeals
Protect Your Right to Full Compensation
If you’ve suffered a workplace injury that will keep you out of work long-term, understanding how Workers’ Comp and SSDI interact is essential. You may be entitled to both—but getting the full benefits you deserve often requires strategic planning and legal knowledge.
PLBH helps injured workers across Southern California navigate complex disability and compensation issues. Call (800) 435-7542 today for a free consultation and let us help you get the support you need.