Offsets and Overpayments

Alternative Compensation & Offsets

Following accident or injury it may be possible for an injured worker to receive any or all of the collateral benefits available in addition to or in lieu of workers' compensation at one time or another during periods of disability from work. These collateral payments should be viewed by the injured worker as different types of safety nets potentially available after an accident or onset of disability. Potential wage loss replacement, temporarily or permanently available, with limitations and restrictions, are based on a myriad of factors and circumstances.

In some instances, the injured worker may be able to perform limited work without loss of some benefits. Detailed explanation of the various combinations, offsets, overpayments, and/or underpayments is a discussion to be held with your experienced and knowledgeable workers' compensation attorney.

  • Injured workers may be entitled to:
  • Workers' compensation benefits AND unemployment benefits. In rare circumstances, unemployment benefits may be reduced in part by workers' compensation benefits.
  • Workers' compensation benefits WHILE still working, with awards being determined by the difference between pre-injury and post-injury earnings.
  • Workers compensation benefits AND Social Security Disability Insurance (SSDI), AND possibly even Supplemental Security Income (SSI) benefits when disability exceeds more than one year, although there are possible offset issues that require notification to the Social Security Administration of all benefits received.
  • Workers compensation benefits, AND SSDI benefits, AND SSI benefits, AND limited work, although it is even more important to notify the SSA of all benefits and income received, so that they may calculate the appropriate offsets and earnings allowed to avoid overpayment or underpayment. This scenario is rare.
  • Workers' compensation benefits AND/OR long-term disability benefits, retirement disability benefits, and regular retirement benefits.

The Social Security Administration must be notified any time there is any increase or decrease in workers' compensation payments to calculate appropriate offsets and to avoid an overpayment or underpayment.

Unemployment, Social Security Disability and Supplemental Security Income

An injured worker may file for and receive unemployment benefits based on the applicable standard of being ready, willing, and able to perform some work and yet still claim and be entitled to SSDI/SSI benefits based upon an inability to perform "substantial and gainful employment." The standards used to determine ability to work and disability differ with respect to unemployment and SSDI/SSI claims. At present there is no offset between SSDI and unemployment; however, there is a bill before Congress that would result in unemployment benefits received being considered an offset against SSDI benefits or being considered "substantial and gainful employment" for the period unemployment benefits is awarded. Nevertheless, filing for unemployment benefits is still recommended inasmuch as those benefits would likely be available at an earlier date considering the length of time it usually takes to obtain a successful decision in a SSDI/SSI hearing and award.

Social Security Disability, Supplemental Security Income, and Workers' Compensation

It is possible for an injured worker to qualify for a combination of SSDI benefits, SSI benefits, and Workers' Compensation wage loss replacement benefits.

Workers' Compensation benefits will be offset against SSDI benefits if the two benefits added together (SSDI plus Workers' Compensation) equal more than 80% of the injured workers "average current earnings" as determined by the Social Security Administration.

SSI is completely income based — SSA will look at the income of the entire household, including workers' compensation benefits, as well as any household assets to determine eligibility.

Accordingly, it is essential that an injured worker report all Workers' Compensation wage loss replacement benefits (increases and decreases), to the Social Security Administration to determine whether there is an increase or decrease in offset in order to prevent overpayment or underpayment of SSDI awards. Injured workers who do not report increased Workers' Compensation benefits to the SSA will usually develop an overpayment of Social Security benefits. The injured worker would then have to reimburse the Social Security Administration.

Social Security Disability Overpayments

Injured workers confronted with notices of overpayment may appeal those findings and request continuation of Social Security benefits pending a determination. It is important to know that in such case and, if the offset and overpayment are correct, continuing additional payments at the same amount will increase that overpayment. Injured workers may apply for a waiver of overpayment if they were not comfortable in the development of the overpayment. If an injured worker notifies the SSA of an increase in compensation rates and the SSA takes no action the overpayment would not be the injured workers fault. However, the overpayment would still occur even though it resulted from no fault of the injured worker unless the injured worker is able to demonstrate that repayment would represent a financial hardship. It is difficult to demonstrate financial hardship. It is required that an injured worker fully discloses all assets and income as well as a full accounting of all debts and routine household expenditures in order for that determination to be made. It is usually better to contact the SSA and workout a repayment schedule to limit the extent of the hardship created by its repayment.

Social Security Disability/SSI Benefits/Workers' Compensation Benefits/Limited or Restricted Work:

It is possible for an injured worker to qualify for a combination Workers' Compensation wage loss replacement benefits, Unemployment benefits, SSDI, SSI and be able to perform limited work that is not considered to be substantial and gainful under SSDI rules (earnings from work limited to $1,090.00 per month under current rules). Workers' Compensation benefits will also be considered relative to eligibility for SSI benefits (SSDI and Workers' Compensation combined must be less that the SSI maximum, currently $810.00). In rare cases receipt of SSDI and Workers' Compensation combined do not rule out eligibility for SSI benefits. In even more rare cases receipt of SSDI, Workers' Compensation, and limited income from limited work may not rule out eligibility for SSI benefits. A determination of such offsets requires careful review and consideration and exists as a result of the incentive the Social Security Administration and the Worker's Compensation Board and Law provide for return to work.

Social Security Disability/SSI Benefits/Workers' Compensation Benefits/ Unemployment Insurance

At present there is no offset taken from SSDI for receipt of Unemployment benefits. However, there is proposed legislation before Congress to change the current rules. There is no Workers' Compensation offset taken for a partially disabled claimant for receipt of Unemployment benefit. In the event that unemployment benefits and Workers' Compensation benefits together exceed the earnings used to calculate unemployment benefits Unemployment benefits may be reduced by that amount.

Return To Work After Being Approved For SSDI

Injured workers are required to notify the Social Security Administration in the event of return to work, receipt or change in Workers' Compensation benefits following approval of a Social Security claim. The amount of gross wages received after being approved affects your right to continued Social Security Disability benefits.

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