For those with Workmen’s Compensation (WC) benefits who are awarded Social Security disability insurance (SSDI) benefits, there is an offset for the SSDI benefits.
The applicable regulation is 20 C.F.R. 404.408. It states that if the total of WC and SSDI are more than 80% of your average current earnings (ACE), then the SSDI benefit will be capped at 80% of ACE.
Two things to bear in mind:
- In case of lump sum WC settlements, Social Security looks at the lifetime value of the award, and prorates the lump sum based upon the claimant’s life expectancy.
- For lawyers, the attorney fee is paid after the offset. That means a person receiving ongoing WC benefits may have little or no retroactive Social Security disability benefits to support a fee.
For more on this topic, take a look at a good article by Eric Buchanan, Esq. regarding the worker’s compensation offset.