In our practice, we have many clients who have suffered a work injury and become disabled. Consequently, they pursue both a Workers Compensation claim and a Social Security Disability claim simultaneously. A question is often raised as to how the benefits affect each other.
The Workers Compensation benefits wage loss benefits act as an offset to the wage earner s Social Security Disability benefits. However, Social Security applies a formula to calculate the offset. According to the Social Security Administration, the injured work is entitled to 80% of the highest monthly amount that they made prior to their work injury when Social Security combines the Workers Compensation wage loss benefits with the applicant s Social Security benefits. The Social Security Administration will not pay any benefits in excess of that amount.
For example, Ted was a salaried employee who made $60,000 per year. He therefore earned $5,000 per month. Ted was injured at work and receives Workers Compensation benefits of $769.23 per week, which equals $3,333.33 per month in wage loss benefits. He filed for Social Security Disability and was awarded benefits. According to his earning statement from Social Security, Ted is to receive $2,000 a month in disability benefits. 80% of $5,000 (his highest monthly amount prior to his work injury) equals $4,000. He would therefore receive $666.67 a month in disability benefits. ($3,333,33 in workers comp plus $666.67 in disability benefits equals $4,000.00.) Ted s Workers Compensation benefits are not affected; instead, his Social Security benefits are reduced.