If you receive workers' compensation or other public disability benefits, your Social Security benefits may be reduced.
Workers' compensation benefits are paid to a worker because of a job-related injury or illness. They may be paid by federal or state workers' compensation agencies, employers or by insurance companies on behalf of employers.
Other public disability payments that may affect your Social Security benefit are those paid by a federal, state or local government for disabling medical conditions that are not job-related. Examples are civil service disability benefits, military disability benefits, state temporary disability benefits and state or local government retirement benefits that are based on disability.
If you receive workers' compensation or other public disability benefits and Social Security disability benefits, the total amount of these benefits cannot exceed 80 percent of your average current earnings before you became disabled.
Examples of workers' compensation and other public disability benefits include:
- State Workers' Compensation (WC) benefits;
- Black Lung benefits from the Federal Mine Safety and Health Act (FMSHA);
- Disability benefits from the Civil Service Retirement System (CSRS);
- Benefits from the Federal Employees' Retirement System (FERS);
- Disability benefits from the military, including military retirement pensions based on disability (not Veterans' Administration (VA) benefits);
- Temporary local government disability insurance (LDI) benefits;
- Temporary State government disability insurance (SDI) benefits;
- Federal Employees' Compensation Act (FECA) benefits; and
- Longshore and Harbor Workers' Compensation Act (LSHWCA) benefits.
Other forms of workers' compensation payments include:
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Lump Sum Settlements - Lump sum settlements are one-time payments made instead of periodic (e.g., weekly, bi-weekly, monthly, bi-monthly, etc.) workers' compensation (WC) payments. A lump sum settlement can cause a reduction of your Social Security benefits.
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Annuities - Workers' compensation settlements can also be awarded as annuities instead of lump sums. Annuities are annual payments paid for a specified period of time. These payments can be deferred or begin immediately. Your Social Security benefits can be reduced if the annuity is paid as a substitute for workers' compensation payments.
For more information, read "How Workers' Compensation And Other Disability Payments May Affect Your Benefits."