Sometimes, workers sustain a work injury that leaves them unable to return to their former job or a similar job. Since permanent total disability (PTD) benefits are not a guarantee for an injured worker who cannot return to his or her prior job or place of employment, these individuals might be forced to seek benefits elsewhere.
Consequently, social security disability (SSD) benefits may be pursued by the injured individual. This often leads to the question of whether SSD benefits will be reduced if the worker is also receiving TTD benefits from workers’ compensation. To determine if there will be a reduction in SSD benefits, a specific formula needs to be followed. Here is how you can determine whether your workers’ compensation benefits will affect drawing social security pay early due to a work-related disability:
- If the total of your combined monthly workers’ compensation and social security benefits (including what others in your household draw) exceeds 80% of your gross average earnings per month (average current earnings) prior to the disability, then your SSD benefits will be reduced so that you do not exceed this 80% level
- Example: Donna draws $1,000 from SSD per month. Her husband draws $1,500 per month. Donna is also drawing $548 from workers’ compensation each month. Thus, benefits in this household total $3,048. Donna’s gross average earnings per month before she became disabled from a work accident was $3,500. Since 80% of $3,500 equals $2,800, the amount that Donna and her family draws from SSD will have to be reduced by $248 (the difference between $3,048 and $2,800) in order to meet the 80% requirement.
- Example: Dennis draws $1,300 from SSD per month, while his son draws $300. In total, Dennis’ household receives $1,600 from SSD each month. This does not account for what Dennis earns from workers’ compensation. Dennis’ gross average earnings per month prior to the disability was $1,800. 80% of $1,800 equals $1,440. In this case, since the SSD benefits are more than the 80% requirement, the $1,600 will serve as the maximum standard of benefits level. Thus, the SSD benefits will be reduced so that the combination of this plus Dennis’ workers’ compensation benefits does not exceed $1,600.