Can I Get Disability After a Workers' Comp Settlement?
You can collect Social Security disability benefits after getting a workers' comp settlement. However, you must meet the Social Security Administration (SSA) 's criteria.
Why Should I File for Social Security Disability If I Already Get Workers' Comp Benefits?
Work-related injuries can often be so severe that you're often unable to work for a long time. As you might already know, a workers' compensation settlement may not be enough to cover all expenses.
When recovering from your injury, there are typically many unexpected costs, from medical expenses and ongoing treatments to daily living expenses and lost wages. When workers' comp falls short, it can be hard to pay the bills while you're also trying to get better.
Offset Rules for Social Security Disability Benefits
The SSA has an "offset rule" for workers' compensation benefits. This means that if the total amount of your benefits, including Social Security disability and workers' comp, are more than 80% of your average earnings, the excess amount will be deducted from your Social Security benefit.
The SSA calculates your average current earnings using either the average from your five highest-earning consecutive years or the highest-earning year of the five years before your disability began.
Lump-sum workers' compensation payments can also affect Social Security disability benefits. The SSA reduces your benefits by adjusting the lump sum settlement to reflect what you would have received in weekly or monthly benefit payments instead of getting it all at once.
However, medical or legal expenses related to your injury are typically excluded when the SSA calculates the offset. This means they won't count those expenses against you, potentially allowing you to keep more Social Security benefits. So, keeping track of all your medical and legal costs and ensuring that they're meticulously documented is essential.
Other types of payments affecting your disability benefits
The SSA applies the 80% pre-disability income limit to other benefits besides workers' compensation claims, like:
Civil service disability benefits
Short-term state disability benefits
State or local government disability-based retirement benefits
There are some situations when the 80% limit doesn't apply, including:
Private disability benefits (like through your employer's insurance)
VA disability benefits
State and local government benefits if Social Security taxes were deducted from your earnings
SSI benefits
Types of Disability Programs You Can Apply For
VA Disability
If you served in the military, you might be able to file a disability claim with the US Department of Veterans Affairs (VA). The eligibility rules are strict, and you'll need to show proof that your condition is related to your time in active service.
Private Insurance
If you have a short- or long-term disability insurance policy either purchased by you or provided by your employer, you can file a claim to get monthly payments. These payments usually cover around 40% to 60% of your regular paycheck.
Supplemental Security Income (SSI)
SSI is a federal program that provides monthly payments to individuals who are over 65, blind, or disabled and have limited financial resources.
The Federal Benefit Rate (FBR) for 2024 is $943 per month for an individual and $1,415 for a couple. These figures do not account for all income exclusions and might vary by state.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance (SSDI) is a federal program that provides monthly payments to people who are unable to work due to a long-term or permanent disability. It helps cover living expenses when a disability makes it impossible to earn an income.
SSDI payments are meant for people who can't engage in "substantial gainful activity" (SGA), which means earning above a predetermined amount each month ($1,470 in 2024 or $2,460 if you're blind). You must also have paid Social Security taxes, which means you have a work history. Generally, you need to have worked for at least 5 of the last 10 years, but this can vary depending on how old you were when your disability began.
Your condition must be considered a disability by the SSA. This means it must be severe enough to keep you from doing any substantial work for at least 12 months or is expected to result in your death.
Temporary or partial disabilities usually don't qualify. The SSA has a list of medical conditions that automatically meet their criteria, but if your condition isn't on the list, it can still qualify if it's severe enough to limit your ability to work.
Once approved, you'll receive a monthly payment based on your average lifetime earnings before your disability. The amount can vary, but in 2024, the average monthly payment is around $1,400, with a maximum of $3,882.
Medicare Eligibility
You become eligible for Medicare after receiving SSDI benefits for 24 months. Once you reach the 24-month mark, you'll automatically be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). This insurance helps pay for medical treatment for conditions unrelated to your job injury.
Some conditions, like end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS), may allow you to qualify for Medicare sooner.
Applying for Disability After a Workers' Comp Settlement Agreement
Review Your Workers' Comp Settlement
Ensure that you understand the details of your worker's comp case, including how it may affect your eligibility for Social Security disability benefits. Be aware of any lump-sum payments or ongoing workers' comp payments, as these can impact your Social Security disability benefits due to the "offset" rule.
Gather Necessary Documentation
Collect all relevant documents, including your workers' comp settlement paperwork, medical records, proof of income, work history, and any other documents required by the SSA. Check to make sure you have detailed medical records showing your diagnosis, treatments, and how your condition limits your ability to work.
Check Eligibility for Social Security Disability
Review the eligibility criteria for SSDI or SSI. To qualify, you must have a disability expected to last at least 12 months or result in death. You also need sufficient work credits for SSDI or meet income and asset limits for SSI.
Complete the Application
Fill out the application forms, which you can do online, over the phone, or in person at your local Social Security office. Provide accurate information about your medical condition, workers' comp settlement, work history, and other income sources.
Submit Required Documentation
Send all the required documents to the SSA along with your application. This includes medical records, proof of workers' comp settlement, and any other information required by the SSA to support your claim.
Cooperate with the SSA During the Review Process
The SSA may request additional information or clarification, so be prepared to provide any extra documents or answer questions. The SSA might also arrange for you to undergo a medical examination.
Track Your Application Status
Keep track of your application status by regularly checking online or contacting the SSA. That way, you can respond promptly to requests for additional information.
Prepare for Appeals
It usually takes around two years to get approved for disability payments, and most people get denied the first time, so appealing is often necessary. The good news is your chances of approval go up after a couple of appeals. Hiring a disability lawyer can boost your chances. People who do this are three times more likely to get approved.
Required Documentation
When filing for SSDI, you'll need the following documentation:
Personal Information
Social Security Number (SSN): Your SSN and, if applicable, the SSNs of your spouse and minor children.
Birth Certificate: A copy of your birth certificate or proof of birth.
Proof of US Citizenship or Legal Residency: If you weren't born in the United States, you'll need documentation showing you're a US citizen or have legal residency status.
Medical Information
Medical Records: All relevant medical records from doctors, hospitals, clinics, and other medical care providers, including test results, imaging reports (like MRIs or X-rays), lab results, and treatment notes. You should already have most of these records because you've already filed a workers' comp claim.
List of Medications: A medication list including dosages and the names of doctors who prescribed them.
Medical Provider Information: Contact information (names, addresses, phone numbers) of all doctors, hospitals, clinics, and other healthcare providers who have treated you, along with the dates of treatment.
Summary of Your Condition: A written description of your medical condition, how it affects your daily life, and your ability to work.
Work Information
Work History: A list of all the jobs you've had over the past 15 years, including job titles, types of work, dates of employment, and the nature of your duties.
Recent Tax Documents: Copies of your W-2 forms (if you were an employee) or self-employment tax returns (if you were self-employed) for the past year.
Work-Related Documents: Details about any workers' compensation or other benefits you've received.
Financial Information
Bank Account Information: Your bank account number and routing number for direct deposit of benefits.
Household Income and Resources: Information about any income you receive, such as from pensions, investments, or other sources.
Additional Documentation
Adult Disability Report (Form SSA-3368): This form includes detailed information about your medical condition, work history, and how your disability affects your daily activities.
Authorization to Disclose information to the SSA (Form SSA-827): A signed form giving the SSA permission to request your medical records from your healthcare providers.
Final Thoughts
Applying for Social Security disability benefits after a workers' comp settlement can be challenging, but it's definitely possible--especially if you get legal advice. Even if you've already received workers' compensation, Social Security disability benefits can provide you with additional financial support to help cover your expenses while you recover from a serious injury.