A common question a lot of people seem to ask regarding workers compensation benefits is how they will affect Social Security retirement benefits later on. If this is something you’ve been wondering about as well, have no fear. Simply keep reading below for all the answers you’re looking for.
Does Worker’s Compensation Affect Social Security Retirement Benefits?
In short, yes. Receiving workers compensation will subject you to what’s known as coordination when it comes time to receive your Social Security retirement benefits. Typically, this will amount to 50% of the total monthly sum paid out by the Social Security Administration (SSA). Of course, this means if you have workers compensation benefits with lower weekly rates, it’s possible for them to be exhausted entirely. To protect yourself, pay attention to the insurance company. Although they can technically only choose one means of coordination, many will still try to “double dip” and “coordinate both retirement benefits and take a credit for old age (65+).” You will also want to make sure you do your best to settle your claim prior to coordination lowering the weekly rate.
If you’re already receiving Social Security retirement benefits at the time of your injury, and your injury occurred after December 19, 2011, your rights are slightly different. In these situations, you cannot have your workers compensation reduced to lower than 50% of the payable amount – though once again, beware of insurance companies who will still often take more than they’re supposed to.
Can You Collect Workers’ Comp & Social Security Disability Benefits?
The short answer to this one is unfortunately no. Because the state of Michigan does not allow Social Security disability benefits, meaning SSD, SSI, and SSDI, to be coordinated under workers compensation, you cannot collect them both. This does mean though that your insurance company can’t get away with reducing what they pay just because of what they may have collected from the SSA. This is often why you will be recommended to apply for disability benefits over retirement benefits even though they automatically turn into retirement benefits after a certain age anyway.
If you’re getting more than 80% of your past average current earnings with combined Social Security disability benefits and workers compensation, the SSA can offset the disparity. The offset “is even taxed like Social Security disability benefits were paid,” though you can avoid this offset by settling your claim for a lump sum cash payment.
Have more/specific questions about receiving workers compensation and/or how it may affect your Social Security retirement benefits? Consult our insightful attorneys at Aiello Law Group today! Call us, today, at 313.964.4900 or fill out the form in the sidebar or on our contact page, and learn more about how we can help you.