How Do Workers’ Comp Settlements Affect Your SSDI Claim?

Understanding the SSDI system can be tricky when dealing with multiple benefit sources, such as workers’ compensation. While these two programs are entirely different, putting them together can impact the size of your disability check. This situation is especially true when lump-sum payments are involved. Learning how workers’ comp settlements affect your SSDI claim will help you prepare for any potential changes.

Understanding Workers’ Compensation

Workers’ comp is crucial if you are injured or sick at work. This state-mandated insurance program is designed to help you cover medical bills, recover lost wages, and receive other financial support until you’re ready to rejoin the workforce. You may be entitled to a settlement based on the severity of your injuries and your ability to find employment. Depending on the case, you can receive it as a lump sum payment or in weekly installments.

How Does SSDI Work?

On the other hand, Social Security Disability Insurance (SSDI) is a federal program that offers financial help if you’re unable to work due to a severe, long-term disability. While workers’ comp is tied to a specific work-related injury or illness, SSDI can apply to any disability that meets the SSA’s criteria. The SSA also calculates your monthly benefits based on your lifetime earnings, not the severity of your disability.

Workers’ Comp and SSDI: Can You Receive Both?

If you’re eligible for Workers’ Comp and SSDI benefits, you’re probably wondering whether you can collect both simultaneously. In most cases, you’re allowed to collect benefits from both programs. However, you can only receive up to 80% of your average pre-disability earnings, regardless of how many programs you qualify for.

How Will Workers’ Comp Settlements Impact Your SSDI?

Understanding the relationship between your workers’ comp settlement and SSDI benefits is essential if you’re eligible for both. Here are a few key ways these two may impact your overall claim:

Reduction in SSDI Benefits

The SSA has a unique formula to “offset” the overall amount you receive from your Workers’ Comp settlement and your SSDI benefits if it exceeds their threshold. If your SSDI and Workers’ Comp benefits exceed 80% of your pre-disability earnings, the SSA will reduce your benefits to meet that limit. This may impact your monthly cash flow, especially if these benefits are your primary source of income.

Timing of Settlements and SSDI Payments

The timing of your Workers’ Comp settlement may also affect the overall amount of your monthly SSDI benefits. If you decide to take a lump sum payment, the SSA will calculate the offset by dividing the settlement amount by your monthly SSDI benefits. If your lump sum exceeds the SSA’s threshold, your benefits may decrease or even be suspended.

Structuring Workers’ Comp Settlements

How you structure your workers’ compensation settlement is crucial to help reduce its impact on your SSDI benefits. For example, if you choose a lump sum settlement, you can spread it out over a longer time period. This way, you have a higher chance of preserving more of your disability payments without issue.

Start Your SSDI Claim Today

Navigating an SSDI claim with a workers’ compensation settlement can be daunting, especially when recovering from your injuries. Our experienced New York social security disability lawyers are here to answer your questions and help you win the benefits you’re entitled to. Please call us at 855-208-7852 or contact us online to schedule a free consultation today.