Offset Considerations When Receiving Both Social Security Disability and Workers’ Compensation Benefits in Maine, Massachusetts and New Hampshire

For those receiving weekly Workers’ Compensation (WC) benefits and considering an application for Social Security Disability Insurance (SSDI) benefits, there are offset considerations that need to take place.  Unfortunately, our office has seen that many attorneys fail to properly advise their clients as to how the offset provisions work and what can be undertaken to minimize the consequences of such an offset.

When one is injured as a result of a work-related accident in Maine, Massachusetts or New Hampshire, it is rather commonplace for an individual to be entitled to receive weekly lost wage replacement benefits while they remain out of work.   As one becomes long-term disabled from working, and it becomes more evident that one will remain totally disabled from working for what is likely to be a year or longer, consideration needs to given to applying for SSDI benefits.   Unfortunately, many WC lawyers are not aware that they should be advising their clients that they may be entitled to additional benefits in the way of SSDI benefits.   There are a number of additional considerations that do need to take place in this set of circumstances.

Public workers’ compensation benefits paid weekly as prescribed by state or federal workers’ compensation laws in Maine, Massachusetts and New Hampshire will result in an offset from any Social Security disability insurance benefits received.    The calculation of the WC offset requires one to obtain three figures (which can be obtained from one’s local Social Security office and are based on one’s earnings record): one’s PIA (primary insurance amount), 80% of one’s ACEH (Average Current Earnings History) and Family Maximum in order to determine exactly how much the SSDI entitlement will be if an award of SSDI benefits were to take palce.  The Social Security regulations prescribe that one may receive up to the amount of one’s PIA assuming the PIA amount and the amount of one’s monthly receipt of WC benefits does not exceed the higher of either 80% of their ACEH or their Family Maximum. as prescribed by the provisions of 20 C.F.R. §404.408 .

It is important to understand that while there may be circumstances where the amount of one’s entitlement to SSDI benefits is reduced to $0 given the amount of the WC offset, there are other considerations to take into account when deciding whether to apply for such benefits.   For one, if there is a determination that the offset reduces entitlement to $0, one will still be entitled to receive any COLA amounts that are determined each year.  Likewise, a finding of disability and entitlement to Social Security disability can still result in entitlement to Medicare benefits after receiving a Social Security disability benefit for 24 months.

Unfortunately, counsel has seen that many WC lawyers tell their clients to wait to apply for SSDI benefits only after they are no longer receiving Social Security disability benefits or their case has been settled.  Not only can this result in the loss of COLA amounts even if there were a total offset (and it’s important to realize that in many circumstances, in fact most, the offset is not a total offset), it also can result in the loss of years of Medicare entitlement.

Likewise, many WC lawyers do not understand the manner in which a lump sum settlement of their client’s case can adversely impact the future receipt of SSDI benefits should it be necessary for their client to apply for SSDI benefits.  If one does in fact lump sum settle their WC case, the Social Security Administration may choose to offset each month an amount reflecting what one has received in weekly workers’ compensation lost wage (indemnity) benefits unless the WC settlement paperwork is drafted in a manner so as to minimize the impact of the offset.   If the settlement in fact reflects funds meant to address unreimbursed medical bills, attorney’s fees, or permanent impairment, these amounts may be be excluded from the offset amount SSA ultimately determines.   Likewise, if the amount of the settlement is drafted in a manner so as to reflect payment over the course of one’s lifetime, this can significantly limit the adverse impact a WC settlement can have on one’s receipt of SSDI benefits.

Having a Social Security disability lawyer familiar with the manner in which SSA addresses the offset is essential to avoiding what can be a long term loss of SSDI benefits based on what may be an avoidable offset.   In many circumstances, we will assist the WC lawyer with the drafting language necessary to minimize and many times avoid altogether the offset of money from your receipt of SSDI benefits.   There are different offset issues involved in the circumstance where an individual is receiving long term group disability insurance benefits, which likewise should involve the advice and assistance of a skilled lawyer who is familiar with how these two types of benefits interplay.

If you are presently long term disabled from working and receiving WC benefits, contact the Law Offices of Russell J. Goldsmith now to see how we might be able to assist you with the receipt of additional SSDI benefits (and potentially Medicare) at 1-800-773-8622.

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