Those seeking Social Security Disability Insurance benefits (or those who are already beneficiaries) need to know receiving workers’ compensation is likely to offset the amount they receive from SSDI.
While former workers can be eligible for both at the same time, the Social Security Administration typically requires in such situations that SSDI benefits be reduced so the total monthly amount a worker takes in is no more than 80 percent of what was earned when he or she was fully employed.
The process by which a disabled person’s SSDI benefits are reduced by workers’ compensation is referred to as an “offset.” Offsets are done both for monthly workers’ compensation benefits, as well as lump sum awards.
It’s often a complex formulation, and our Boston SSDI lawyers are uniquely qualified to handle such cases, as we have experience in securing both SSDI benefits and workers’ compensation benefits for our clients. We can help clients determine how to best navigate the system. In cases where the administration errs with an offset amount, we can help clients request either a refund waiver (in cases of overpayment) or for lump sum reimbursement (in cases of underpayment).
The recent case of Fugate v. Comm’r of Social Sec., before the U.S. Court of Appeals for the Sixth Circuit, shows how sometimes, even administration officials get confused with their own calculations.
According to court records, claimant received both workers’ compensation and disability benefits in 1992. The agency, in an attempt to offset such payments to equal 80 percent of claimant’s average current earnings, used the three most recent paystubs to calculate a gross earnings of $23,000 in 1991. After factoring in retirement contributions and pre-tax benefits, the administration figured his earnings to be $21,700.
Claimant later complained about the way the agency reached this figure, saying it should have factored in his three highest-earning months during the year in question, but the agency rejected this assertion.
The agency conducted a routine review in 2004, and determined (erroneously) it should have paid claimant on the $23,000 figure. The agency paid him a lump sum of $8,875. However, two years later, the agency conducted another review and determined there had been a mistake and asked claimant to repay the lump sum award.
At this point, claimant could have requested a refund waiver, but instead, he chose to seek reconsideration of his benefits calculations for the same reasons he had cited way back in the early 1990s.
An administrative law judge declined to reconsider the lump sum payment decision, but held claimant was entitled to a wavier. However, he still had never actually requested one. He nonetheless appealed that finding, and the appellate court vacated.
The case then went back to the district court, which granted summary judgment to the administration – meaning claimant would have to repay that $8,875 and he wasn’t entitled to a recalculation of benefits. That ruling was recently affirmed by the U.S. Court of Appeals for the Sixth Circuit.
Fortunately, the appellate court did note claimant is still entitled to a waiver for payment of that nearly $9,000, as the law permits a waiver to be requested at any time.
If you or a loved one is seeking Social Security Disability Insurance in Boston, call for a free and confidential appointment at (617) 777-7777.
Fugate v. Comm’r of Social Sec., Jan. 12, 2015, U.S. Court of Appeals for the Sixth Circuit
More Blog Entries:
Rand Paul Says Many Receiving SSDI Benefits Gaming System, Jan. 27, 2015, Boston Social Security Disability Insurance Lawyer Blog