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Social Security Disabilty and workers' compensation

Injured workers in California and throughout the nation may be entitled to workers' compensation and Social Security Disability benefits. However, there are important distinctions between these programs.

Workers compensation is administered by California for workers who suffer a work-related injury or illness. This program provides medical treatment, cash payments for lost wages, temporary benefits during a worker's recuperation and survivor benefits to a worker killed at work.

The federal government provides Social Security Disability benefits to workers with disabilities. While workers are entitled to workers' compensation on the first day of work, Social Security disability benefits are provided only to workers who possess a substantial employment history.

Unlike workers' compensation, workers do not have to suffer a work-related injury or illness to receive SSD benefits. Workers are entitled to long-term Social Security Disability benefits if they have a long-term physical or mental impairment that prevents them for engaging in any gainful employment. The impairment must be expected to last at least one year or result in death, and begin after a 5-month waiting period.

Federal law requires an offset or reduction of SSD benefits when a worker is eligible for periodic or lump-sum workers' compensation payments. These offsets also apply to disability benefits for workers under other programs, such as the California Public Employees' Retirement Program. The combined workers' compensation and Social Security Disability benefits may not exceed 80 percent of the worker's current earnings. However, combined payments cannot be lower than the amount of total Social Security benefits before the reduction. Total earnings include amounts over the Social Security table minimum and are used to determine average current earnings.

If a state's workers' compensation law provides for periodic payments and still allows lump-sum settlements which discharge the insurer or employer's liability, an offset still applies to this settlement. The lump sum is prorated to reflect the monthly rate that would have been paid if the lump sum award was not entered. When determining this offset, any medical and legal expenses that were incurred may be excluded.

Source: Social Security Administration, "Workers' compensation, Social Security disability insurance, and the offset: A fact sheet," Virginia Reno, Accessed Feb. 1, 2016

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Melissa A. Proudian, Attorney at Law
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