Workers' Compensation
Social Security Disability Offsets
The Viginia Workers’ Compensation statute provides wage benefits to workers who are injured by accident at work. If an employee is unable to return to their job or a light duty assignment due to a workplace accident, wage benefits are paid out at two-thirds of the worker’s average weekly wage for a maximum of 500 weeks.
Under Social Security Disability guidelines, multiple factors go into the consideration of one’s disability qualification, including one’s medical condition, age, education and work history. To qualify for disability benefits, you must have “a physical or mental impairment that is expected to keep you from doing any substantial work for at least a year.” Depending on the multiple factors listed above, it is possible that an employee who is unable to return to his or her regular job for workers’ compensation purposes may nonetheless be denied Social Security Disability due to an ability to perform other work in the general economy, regardless of whether you desire or can actually get hired for such a job.
If an employee receiving workers’ compensation also qualifies for Social Security Disability benefits, SSA first will apply workers’ compensation benefits as an offset to Social Security Disability Benefits. As result, not every disabled worker can recover full benefits under both statutes. As calculated, the combined amount of workers’ compensation and Social Security Disability benefits may not exceed 80% of the employee’s peak earning year for the five year period before then onset of disability.
For example, a worker who earned $40,000 per year may not receive more than $32,000 (or $2,667 per month) in combined workers’ compensation and Social Security Disability benefits. If that worker receives $2,215 per month in workers’ compensation benefits, Social Security Disability will pay only $452 in additional benefits due to the 80% offset rule.
When you settle a workers' compensation claim for a lump sum payout you do not automatically avoid the Social Security offset. SSA will calculate the offset by prorating the settlement value as a weekly payment credit according to you average weekly wage or terms specified in the settlement agreement.